Question 1

Dividend yield is calculated by dividing

Accepted Answer

A)  earnings per share by market price per share. 
B)  the market price of one share by the annual dividend per share. 
C)  the annual dividend per share by the market price of one share. 
D)  annual dividend per share by earnings per share. 
A)  earnings per share by market price per share. 
B)  the market price of one share by the annual dividend per share. 
C)  the annual dividend per share by the market price of one share. 
D)  annual dividend per share by earnings per share. C

Question 2

Shares whose prices are expected to remain stable, or even prosper, when economic activity is slowing down are known as

Accepted Answer

A)  reversible shares. 
B)  cyclical shares. 
C)  speculative shares. 
D)  defensive shares. 
A)  reversible shares. 
B)  cyclical shares. 
C)  speculative shares. 
D)  defensive shares. D

Question 3

An individual share generally provides a

Accepted Answer

A)  lower current income than that available from other types of investments. 
B)  dividend payment that ensures total protection from purchasing power risk. 
C)  predictable annual rate of return. 
D)  refuge from event risk. 
A)  lower current income than that available from other types of investments. 
B)  dividend payment that ensures total protection from purchasing power risk. 
C)  predictable annual rate of return. 
D)  refuge from event risk. A

Question 4

Firms tend to repurchase their outstanding shares when they view the shares as undervalued.

Accepted Answer

A) True 
 B)False

Question 5

The U.S. share market

Accepted Answer

A)  currently represents about 66% of the world's equity market. 
B)  is decreasing as a percentage of the world's equity market. 
C)  lists over 25,000 shares. 
D)  consistently outperforms the foreign markets once exchange rates are considered. 
A)  currently represents about 66% of the world's equity market. 
B)  is decreasing as a percentage of the world's equity market. 
C)  lists over 25,000 shares. 
D)  consistently outperforms the foreign markets once exchange rates are considered.

Question 6

Companies with strong earnings but limited growth opportunities

Accepted Answer

A)  do not generally pay any dividends. 
B)  are speculative shares. 
C)  are called blue- chip shares. 
D)  generally pay high dividends. 
A)  do not generally pay any dividends. 
B)  are speculative shares. 
C)  are called blue- chip shares. 
D)  generally pay high dividends.

Question 7

The stock listing for a company shows a P/E of 18, a dividend yield of 2.4% and a closing price of $23.76. What is the amount of dividends per share?

Accepted Answer

A)  $1.32 
B)  $0.03 
C)  $0.57 
D)  $1.03 
A)  $1.32 
B)  $0.03 
C)  $0.57 
D)  $1.03

Question 8

The value that investors place on a share is called its

Accepted Answer

A)  par value. 
B)  investment value. 
C)  book value. 
D)  liquidation value. 
A)  par value. 
B)  investment value. 
C)  book value. 
D)  liquidation value.

Question 9

The most common reason for an investor to adopt the quality long- term growth investment strategy is for long- term accumulation of capital.

Accepted Answer

A) True 
 B)False

Question 10

As a general rule, which one of the following statements concerning the various values of ordinary share is correct?

Accepted Answer

A)  Book values are usually below market values. 
B)  Par values are usually above book values. 
C)  Market values are usually below book values. 
D)  Market values are usually below par values. 
A)  Book values are usually below market values. 
B)  Par values are usually above book values. 
C)  Market values are usually below book values. 
D)  Market values are usually below par values.

Question 11

An increase in the value of the dollar relative to the yen has a positive effect on the returns of Australian investors who invest in shares of Japanese firms.

Accepted Answer

A) True 
 B)False

Question 12

A share's market value would normally be higher than it's book value.

Accepted Answer

A) True 
 B)False

Question 13

Investors seeking current income that tends to increase over time should purchase

Accepted Answer

A)  speculative shares. 
B)  income shares. 
C)  growth shares. 
D)  cyclical shares. 
A)  speculative shares. 
B)  income shares. 
C)  growth shares. 
D)  cyclical shares.

Question 14

Characteristics of established growth companies include all of the following EXCEPT

Accepted Answer

A)  adequate cash flow to service their debt. 
B)  steady earnings growth. 
C)  high dividend payout ratios. 
D)  high operating margins. 
A)  adequate cash flow to service their debt. 
B)  steady earnings growth. 
C)  high dividend payout ratios. 
D)  high operating margins.

Question 15

The value that represents the amount of shareholders' equity in a firm is called the

Accepted Answer

A)  liquidation value. 
B)  par value. 
C)  book value. 
D)  market value. 
A)  liquidation value. 
B)  par value. 
C)  book value. 
D)  market value.

Question 16

Which category of shares represents the highest level of risk?

Accepted Answer

A)  Large- cap. 
B)  Small- cap. 
C)  Blue- chip. 
D)  Mid- cap. 
A)  Large- cap. 
B)  Small- cap. 
C)  Blue- chip. 
D)  Mid- cap.

Question 17

Companies typically issue new shares through an initial public offering (IPO).

Accepted Answer

A) True 
 B)False

Question 18

When a company, working with an underwriter, offers the investing public a certain number of shares at a certain price, the company is making what is known as a

Accepted Answer

A)  stock spin- off. 
B)  public offering. 
C)  treasury offering. 
D)  rights offering. 
A)  stock spin- off. 
B)  public offering. 
C)  treasury offering. 
D)  rights offering.

Question 19

Typical characteristics of growth shares include

Accepted Answer

A)  strong performance even in market downturns. 
B)  acquisitions of competing companies. 
C)  high rates of growth in operations and earnings. 
D)  rapidly growing dividends. 
A)  strong performance even in market downturns. 
B)  acquisitions of competing companies. 
C)  high rates of growth in operations and earnings. 
D)  rapidly growing dividends.

Question 20

Mid- cap shares are generally classified as those with a market capitalisation between $1 and $4 billion.

Accepted Answer

A) True 
 B)False

Dividend yield is calculated by dividing

Shares whose prices are expected to remain stable, or even prosper, when economic activity is slowing down are known as

An individual share generally provides a

Firms tend to repurchase their outstanding shares when they view the shares as undervalued.

The U.S. share market

Companies with strong earnings but limited growth opportunities

The stock listing for a company shows a P/E of 18, a dividend yield of 2.4% and a closing price of $23.76. What is the amount of dividends per share?

The value that investors place on a share is called its

The most common reason for an investor to adopt the quality long- term growth investment strategy is for long- term accumulation of capital.

As a general rule, which one of the following statements concerning the various values of ordinary share is correct?

An increase in the value of the dollar relative to the yen has a positive effect on the returns of Australian investors who invest in shares of Japanese firms.

A share's market value would normally be higher than it's book value.

Investors seeking current income that tends to increase over time should purchase

Characteristics of established growth companies include all of the following EXCEPT

The value that represents the amount of shareholders' equity in a firm is called the

Which category of shares represents the highest level of risk?

Companies typically issue new shares through an initial public offering (IPO).

When a company, working with an underwriter, offers the investing public a certain number of shares at a certain price, the company is making what is known as a

Typical characteristics of growth shares include

Mid- cap shares are generally classified as those with a market capitalisation between $1 and $4 billion.

The Investment Environment

Markets and Transactions

Investment Information and Securities Transactions

Return and Risk

Modern Portfolio Concepts

Analysing Shares

Share Valuation

Technical Analysis, Market Efficiency and Behavioural Finance

Fixed-Income Securities

Bond Valuation

Managed Funds: Professionally Managed Portfolios

Managing Your Own Portfolio

Options: Puts and Calls

Commodities and Financial Futures

Filters

Exam 6: Shares

Dividend yield is calculated by dividing

Shares whose prices are expected to remain stable, or even prosper, when economic activity is slowing down are known as

An individual share generally provides a

Firms tend to repurchase their outstanding shares when they view the shares as undervalued.

The U.S. share market

Companies with strong earnings but limited growth opportunities

The stock listing for a company shows a P/E of 18, a dividend yield of 2.4% and a closing price of $23.76. What is the amount of dividends per share?

The value that investors place on a share is called its

The most common reason for an investor to adopt the quality long- term growth investment strategy is for long- term accumulation of capital.

As a general rule, which one of the following statements concerning the various values of ordinary share is correct?

An increase in the value of the dollar relative to the yen has a positive effect on the returns of Australian investors who invest in shares of Japanese firms.

A share's market value would normally be higher than it's book value.

Investors seeking current income that tends to increase over time should purchase

Characteristics of established growth companies include all of the following EXCEPT

The value that represents the amount of shareholders' equity in a firm is called the

Which category of shares represents the highest level of risk?

Companies typically issue new shares through an initial public offering (IPO).

When a company, working with an underwriter, offers the investing public a certain number of shares at a certain price, the company is making what is known as a

Typical characteristics of growth shares include

Mid- cap shares are generally classified as those with a market capitalisation between $1 and $4 billion.

The Investment Environment

Markets and Transactions

Investment Information and Securities Transactions

Return and Risk

Modern Portfolio Concepts

Analysing Shares

Share Valuation

Technical Analysis, Market Efficiency and Behavioural Finance

Fixed-Income Securities

Bond Valuation

Managed Funds: Professionally Managed Portfolios

Managing Your Own Portfolio

Options: Puts and Calls

Commodities and Financial Futures

Filters