Question 1

You received a cash dividend from your stock investment this year.This is taxable income.

Accepted Answer

A) True 
 B)False  True

Question 2

Dividend reinvestment plans should be avoided because of their relatively high cost.

Accepted Answer

A) True 
 B)False  False

Question 3

Only the strongest,most stable and safe-return companies can be called

Accepted Answer

A)  blue chip stocks. 
B)  growth companies. 
C)  income stocks. 
D)  defensive stocks. 
E)  cyclical stocks. 
A)  blue chip stocks. 
B)  growth companies. 
C)  income stocks. 
D)  defensive stocks. 
E)  cyclical stocks. A

Question 4

Compound interest is a very important concept when evaluating the return on an investment you plan to hold for a long time.

Accepted Answer

A) True 
 B)False

Question 5

John Smith is in the 28 percent tax bracket.If he were to purchase a $1,000 municipal bond that had a stated interest rate of 6.9%,the taxable equivalent yield would be

Accepted Answer

A)  6.900%. 
B)  8.261%. 
C)  9.583%. 
D)  12.105%. 
E)  14.625%. 
A)  6.900%. 
B)  8.261%. 
C)  9.583%. 
D)  12.105%. 
E)  14.625%.

Question 6

Common stock owners must receive dividends before preferred stockholders.

Accepted Answer

A) True 
 B)False

Question 7

Suppose the EPS of Wal-Mart stock was $2 and the current price per earnings ratio is 10.What is the current price of Wal-Mart stock?

Accepted Answer

A)  $5 
B)  $8 
C)  $20 
D)  $40 
E)  Can not compute with given information 
A)  $5 
B)  $8 
C)  $20 
D)  $40 
E)  Can not compute with given information

Question 8

You would expect more growth with the preferred stock you own than with the common stock in your portfolio.

Accepted Answer

A) True 
 B)False

Question 9

Capital appreciation of an investment is a form of Current Income.

Accepted Answer

A) True 
 B)False

Question 10

The returns you expect from securities are income and growth.

Accepted Answer

A) True 
 B)False

Question 11

Bonds provide for investment return primarily in the form of growth.

Accepted Answer

A) True 
 B)False

Question 12

When a bond is sold between coupon payment dates,the buyer pays the seller for the accrued interest.

Accepted Answer

A) True 
 B)False

Question 13

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
-Individuals invest in preferred stock for its high [current income | potential gain].

Accepted Answer

The answer of Choose the word or phrase in [...

Question 14

Zero-coupon bonds are issued by

Accepted Answer

A)  the federal government. 
B)  municipalities. 
C)  corporations. 
D)  all of the above. 
E)  b and c only. 
A)  the federal government. 
B)  municipalities. 
C)  corporations. 
D)  all of the above. 
E)  b and c only.

Question 15

Characteristics of corporate bonds include

Accepted Answer

A)  interest paid semi-annually. 
B)  issued in $1,000 denominations. 
C)  tax-free interest income. 
D)  sinking funds are common. 
E)  all of the above except c. 
A)  interest paid semi-annually. 
B)  issued in $1,000 denominations. 
C)  tax-free interest income. 
D)  sinking funds are common. 
E)  all of the above except c.

Question 16

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
-A potential high return on an investment will signal a [high | low] risk exposure.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 17

Corporate ownership is evidenced by

Accepted Answer

A)  preferred stock. 
B)  common stock. 
C)  bonds. 
D)  capital gain. 
E)  property rights. 
A)  preferred stock. 
B)  common stock. 
C)  bonds. 
D)  capital gain. 
E)  property rights.

Question 18

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
-Most publicly traded stocks represent [a liquid | an illiquid] investment.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 19

Typically the best time to invest in the stock market is when the market is very volatile.

Accepted Answer

A) True 
 B)False

Question 20

Anderson,Inc.has $10 million liabilities,$12 million preferred stock,8 million shares of common stock outstanding,and $45 million in total assets.The book value is

Accepted Answer

A)  $2.30 per share. 
B)  $2.88 per share. 
C)  $4.13 per share. 
D)  $4.38 per share. 
E)  none of the above. 
A)  $2.30 per share. 
B)  $2.88 per share. 
C)  $4.13 per share. 
D)  $4.38 per share. 
E)  none of the above.

You received a cash dividend from your stock investment this year.This is taxable income.

Dividend reinvestment plans should be avoided because of their relatively high cost.

Only the strongest,most stable and safe-return companies can be called

Compound interest is a very important concept when evaluating the return on an investment you plan to hold for a long time.

John Smith is in the 28 percent tax bracket.If he were to purchase a $1,000 municipal bond that had a stated interest rate of 6.9%,the taxable equivalent yield would be

Common stock owners must receive dividends before preferred stockholders.

Suppose the EPS of Wal-Mart stock was $2 and the current price per earnings ratio is 10.What is the current price of Wal-Mart stock?

You would expect more growth with the preferred stock you own than with the common stock in your portfolio.

Capital appreciation of an investment is a form of Current Income.

The returns you expect from securities are income and growth.

Bonds provide for investment return primarily in the form of growth.

When a bond is sold between coupon payment dates,the buyer pays the seller for the accrued interest.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Individuals invest in preferred stock for its high [current income | potential gain].

Zero-coupon bonds are issued by

Characteristics of corporate bonds include

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -A potential high return on an investment will signal a [high | low] risk exposure.

Corporate ownership is evidenced by

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Most publicly traded stocks represent [a liquid | an illiquid] investment.

Typically the best time to invest in the stock market is when the market is very volatile.

Anderson,Inc.has $10 million liabilities,$12 million preferred stock,8 million shares of common stock outstanding,and $45 million in total assets.The book value is

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

Filters

Exam 12: Investing in Stocks and Bonds

You received a cash dividend from your stock investment this year.This is taxable income.

Dividend reinvestment plans should be avoided because of their relatively high cost.

Only the strongest,most stable and safe-return companies can be called

Compound interest is a very important concept when evaluating the return on an investment you plan to hold for a long time.

John Smith is in the 28 percent tax bracket.If he were to purchase a $1,000 municipal bond that had a stated interest rate of 6.9%,the taxable equivalent yield would be

Common stock owners must receive dividends before preferred stockholders.

Suppose the EPS of Wal-Mart stock was $2 and the current price per earnings ratio is 10.What is the current price of Wal-Mart stock?

You would expect more growth with the preferred stock you own than with the common stock in your portfolio.

Capital appreciation of an investment is a form of Current Income.

The returns you expect from securities are income and growth.

Bonds provide for investment return primarily in the form of growth.

When a bond is sold between coupon payment dates,the buyer pays the seller for the accrued interest.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Individuals invest in preferred stock for its high [current income | potential gain].

Zero-coupon bonds are issued by

Characteristics of corporate bonds include

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -A potential high return on an investment will signal a [high | low] risk exposure.

Corporate ownership is evidenced by

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Most publicly traded stocks represent [a liquid | an illiquid] investment.

Typically the best time to invest in the stock market is when the market is very volatile.

Anderson,Inc.has $10 million liabilities,$12 million preferred stock,8 million shares of common stock outstanding,and $45 million in total assets.The book value is

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

Filters