Question 1

One hundred shares or a multiple of 100 shares is called a(n) ____________ lot.

Accepted Answer

A)   market
B)   limited
C)   round
D)   odd
E)   executiveF) B) and E)
G) A) and B)

Question 2

A stock that follows the business cycle of advances and declines in the economy is called a(n) ____________ stock.

Accepted Answer

A)   defensive
B)   cyclical
C)   growth
D)   income
E)   blue-chipF) B) and D)
G) A) and B)

Question 3

When a corporation exchanges stock for a specified amount of money,it is exercising its ____________ feature.

Accepted Answer

A)   participating
B)   cumulative
C)   convertible
D)   call
E)   terminationF) A) and C)
G) C) and D)

Question 4

John Baker bought BCE stocks for $33 a share one year ago.He sold the stock a year later for $36.50 a share.What was John's capital gains yield?

Accepted Answer

A)   3 percent
B)   3.50 percent
C)   4 percent
D)   9 percent
E)   10.6 percentF) B) and E)
G) B) and D)

Question 5

Describe why corporations issue common stock.Describe why investors purchase common stock.

Accepted Answer

Corporations issue common stock for the ...

Question 6

Enron's collapse has put thousands of innocent Americans out of work and wiped out the retirement portfolios of thousands more.

Accepted Answer

A) True 
 B)False

Question 7

Daisy Diaz purchased 100 shares of Cameco Inc.at $40 dollars a share.The shares subsequently split three for one on December 31,2004 and currently trade at $50 a share.If Daisy sells all of her shares,what will be his capital gain?

Accepted Answer

A)   $11,000
B)   $5,500
C)   $4,000
D)   $6,000
E)   $6,500F) C) and D)
G) A) and B)

Question 8

A market for existing financial securities that are currently traded between investors is called the ____________ market.

Accepted Answer

A)   technical
B)   fundamental
C)   efficient
D)   secondary
E)   primaryF) None of the above
G) D) and E)

Question 9

A stock that pays higher than average dividends is called a(n) ____________ stock.

Accepted Answer

A)   defensive
B)   income
C)   growth
D)   cyclical
E)   blue-chipF) B) and C)
G) C) and D)

Question 10

When the board of directors approves a two for one stock split,the price for each share of stock

Accepted Answer

A)   remains unchanged.
B)   increases in value.
C)   decreases in value.
D)   is guaranteed to go up within a short period of time.
E)   always drops to half of its former value.F) B) and E)
G) A) and B)

Question 11

Which of the following statements is not true?

Accepted Answer

A)   Most board members like to keep stockholders happy.
B)   Few things will unite stockholders into a powerful opposition force more rapidly than omitted or lowered dividends.
C)   Intelligent investors must be concerned about future after-tax profits.
D)   If a cash dividend is declared by the board of directors,each stockholder by law receives an equal amount per share.
E)   Corporate dividends are always paid in cash.F) B) and C)
G) A) and D)

Question 12

Jamie Presner purchased 100 shares of Bank of Montreal for $86.00 Jamie also paid $50 commission.What was the total purchase price for this transaction?

Accepted Answer

A)   $50.00
B)   $86.00
C)   $8,650.00
D)   $8,289.50
E)   $860.00F) A) and D)
G) A) and B)

Question 13

The annual dividend yield is calculated by dividing the annual dividend by the initial stock investment.

Accepted Answer

A) True 
 B)False

Question 14

The record date is the date that the actual dividend payment is made to stockholders.

Accepted Answer

A) True 
 B)False

Question 15

Last year,Hi-Lo Electronics earned $2.50 per share.If the current market value for a share of stock is $55,what is the firm's PE ratio?

Accepted Answer

A)   0.025
B)   2.5
C)   22
D)   55
E)   It is impossible to calculate a PE ratio with this information.F) A) and D)
G) A) and B)

Question 16

A stock that sells for less than $l a share is called a

Accepted Answer

A)   fractional stock.
B)   dollar stock.
C)   penny stock.
D)   ten-dollar stock.
E)   bad investment.F) A) and E)
G) A) and B)

Question 17

A request that a stock be bought or sold at a specified price is called a ____________ order.

Accepted Answer

A)   market
B)   limit
C)   stop
D)   round
E)   discretionaryF) B) and C)
G) B) and E)

Question 18

Dividends are paid out of profits,and

Accepted Answer

A)   dividends are guaranteed.
B)   dividend payments must be approved by the firm's board of directors.
C)   dividends are paid before a firm's taxes are paid.
D)   dividends are usually paid twice a year.
E)   dividends are guaranteed and paid twice a year.F) B) and D)
G) C) and D)

Question 19

To safeguard investments,stock owners who believe that the price of their stock will go down during an option period will purchase a

Accepted Answer

A)   futures contract.
B)   short contract.
C)   call option.
D)   put option.
E)   margin contract.F) A) and E)
G) A) and B)

Question 20

Dividend payments on common stock are guaranteed,but the amount is determined by the board of directors.

Accepted Answer

A) True 
 B)False

Exam 11: Investing Basics and Evaluating Bonds

When a corporation exchanges stock for a specified amount of money,it is exercising its ____________ feature.

Correct AnswerverifiedShow Answer

John Baker bought BCE stocks for $33 a share one year ago.He sold the stock a year later for $36.50 a share.What was John's capital gains yield?

Correct AnswerverifiedShow Answer

Describe why corporations issue common stock.Describe why investors purchase common stock.

Correct AnswerverifiedCorporations issue common stock for the ...View AnswerShow Answer

Daisy Diaz purchased 100 shares of Cameco Inc.at $40 dollars a share.The shares subsequently split three for one on December 31,2004 and currently trade at $50 a share.If Daisy sells all of her shares,what will be his capital gain?

Correct AnswerverifiedShow Answer

When the board of directors approves a two for one stock split,the price for each share of stock

Correct AnswerverifiedShow Answer

The annual dividend yield is calculated by dividing the annual dividend by the initial stock investment.

Correct AnswerverifiedShow Answer

Last year,Hi-Lo Electronics earned $2.50 per share.If the current market value for a share of stock is $55,what is the firm's PE ratio?

Correct AnswerverifiedShow Answer

Which of the following statements is not true?

Correct AnswerverifiedShow Answer

A stock that sells for less than $l a share is called a

Correct AnswerverifiedShow Answer

To safeguard investments,stock owners who believe that the price of their stock will go down during an option period will purchase a

Correct AnswerverifiedShow Answer

A request that a stock be bought or sold at a specified price is called a ____________ order.

Correct AnswerverifiedShow Answer

The record date is the date that the actual dividend payment is made to stockholders.

Correct AnswerverifiedShow Answer

A market for existing financial securities that are currently traded between investors is called the ____________ market.

Correct AnswerverifiedShow Answer

Jamie Presner purchased 100 shares of Bank of Montreal for $86.00 Jamie also paid $50 commission.What was the total purchase price for this transaction?

Correct AnswerverifiedShow Answer

Dividend payments on common stock are guaranteed,but the amount is determined by the board of directors.

Correct AnswerverifiedShow Answer

Enron's collapse has put thousands of innocent Americans out of work and wiped out the retirement portfolios of thousands more.

Correct AnswerverifiedShow Answer

A stock that pays higher than average dividends is called a(n) ____________ stock.

Correct AnswerverifiedShow Answer

Dividends are paid out of profits,and

Correct AnswerverifiedShow Answer

A stock that follows the business cycle of advances and declines in the economy is called a(n) ____________ stock.

Correct AnswerverifiedShow Answer

One hundred shares or a multiple of 100 shares is called a(n) ____________ lot.

Correct AnswerverifiedShow Answer

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Corporations issue common stock for the ...
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