A proxy vote means
Select one:
a. filling out a voting form and having a representative turn it in for you.
b. requesting that your vote be deferred until a later date.
c. giving a representative the right to vote in your place.
d. None of these.
c. giving a representative the right to vote in your place. CorrectCorrect
Dividends
Select one:
a. are always paid, regardless of the company's profitability.
b. are always paid when the company makes a profit.
c. are never paid to common stockholders; only preferred stockholders receive them.
d. None of these is true.
d. None of these is true.
As a shareholder in Titanic Shipping, Inc., James Blue is one of the many actual owners. In case of the bankruptcy of the corporation, his liability would be limited to
Select one:
a. his ownership percentage of the actual loss.
b. the amount of his inves
b. the amount of his investment.
As compared to growth stocks, income stocks pay ________ dividends with ________ growth in earnings.
Select one:
a. relatively high; relatively high
b. the same; relatively high
c. relatively high; relatively little
d. relatively high; moderate
e. relativ
c. relatively high; relatively little
For an investor who is retired, which category of stocks would be more appropriate for a portion of their portfolio?
Select one:
a. Blue-chip stocks
b. Income stocks
c. Growth stocks
d. All of these are correct.
e. Only Blue-chip stocks and Income stocks
e. Only Blue-chip stocks and Income stocks are correct.
If you purchase stock of big companies like Proctor & Gamble, General Electric, and Texaco you would be buying shares of ________ stocks.
Select one:
a. blue-chip
b. true-blue
c. mini-caps
d. speculative
a. blue-chip
If you were to purchase common stocks issued by large, nationally known companies with sound financial histories with solid dividend and growth records you would own what are called
Select one:
a. best-bet stocks.
b. blue-chip stocks.
c. performance stock
b. blue-chip stocks.
Returns from shares of stock come in the form of
Select one:
a. stock splits.
b. capital appreciation.
c. dividends.
d. All of these are correct.
e. Only capital appreciation and dividends are correct.
e. Only capital appreciation and dividends are correct.
Suppose that a company feels that the price of its stock is more than the average small investor can afford. To lower the price the company could engage in a
Select one:
a. stock split.
b. stock repurchase.
c. proxy vote.
d. All of these are correct.
a. stock split.
The book value of a company is calculated by
Select one:
a. adding the price per share to the dividends paid.
b. subtracting its price per share from the dividends paid.
c. subtracting the value of all the firm's assets from the value of its liabilities.
d. subtracting the value of all the firm's liabilities from the value of its assets
The dividend yield on a share of common stock is
Select one:
a. available at most large companies.
b. the amount of annual dividends divided by the market price of the stock.
c. the taxes you pay on the reinvested dividends.
d. All of these.
e. only avail
b. the amount of annual dividends divided by the market price of the stock.
The dividend yield tells investors which of the following?
Select one:
a. What their portfolio is worth on the open market
b. How much in the way of a return they would receive if the stock price and the dividend level remain constant
c. When the company
b. How much in the way of a return they would receive if the stock price and the dividend level remain constant
________ are a company's distribution of its profits in the form of cash or stock to its owners.
Select one:
a. Dividends
b. Coupon interest payments
c. Equity payments
d. Shareholder divestments
e. None of these
a. Dividends
A stock market characterized by increasing prices is termed a(n) ________ market.
Select one:
a. bull
b. bear
c. animal
d. None of these
a. bull
A stock market characterized by ________ prices is termed a bear market.
Select one:
a. falling
b. rising
c. steady
d. None of these
a. falling
A ________ is a measure of the performance of a group of stocks that represent the market or a sector of the market.
Select one:
a. stock market index
b. stock grouping
c. market composite
d. portfolio return
e. None of these
a. stock market index
Because the Dow Jones Index Average is based on the movement of only ________ large, well-established stocks, many investors believe it reflects price movements for large firms rather than for the general market.
Select one:
a. 30
b. 50
c. 100
d. 500
a. 30
If you are very optimistic about the ability of firms to earn profits today and in the immediate future, what type of investor philosophy do you exhibit?
Select one:
a. Animalistic
b. Bullish
c. Bearish
d. Psychic
b. Bullish
If you wanted information about how the entire stock market is performing, which index would provide you with information on virtually all types and sizes of companies?
Select one:
a. Dow Jones Industrials
b. S&P 500
c. NASDAQ 100
d. Wilshire 5000
d. Wilshire 5000
The S&P 500
Select one:
a. is the oldest and most widely quoted of the stock indexes.
b. is a narrower index than the DOW.
c. includes some stocks from the OTC market.
d. All of these
c. includes some stocks from the OTC market.
The ________ is a common stock indicator, consisting of 30 large industrial firms, and is used to indicate how well stocks have done.
Select one:
a. DAIA
b. CMIA
c. DJIA
d. SPFA
e. None of these
c. DJIA
For several years you have been using charts and computer programs to project trends in the stock market. You are engaging in what type of analysis?
Select one:
a. Dollar cost averaging
b. Technical
c. Fundamental
d. Price/Earnings
e. None of these
b. Technical
You are considering purchasing one of two stocks. Stock A is expected to pay a $2.50 dividend, and has historically grown at 6%. Stock B is expected to pay a $3.00 dividend and has historically grown at 4%. Both are the same risk, and you desire to earn a
e. You should buy either Stock A or B, since the estimated prices are the same.
Which one of the popular common stock valuation methods focuses on supply and demand and uses a computer and charts to identify and project price trends for a stock or for the market as a whole?
Select one:
a. Fundamental analysis approach
b. Technical an
b. Technical analysis approach
This approach is used regularly by security analysts to measure a stock's relative value, or how much investors are willing to pay for a dollar of the company's earnings. It is found by dividing the price per share by the earnings per share and is called
a. P/E ratio.
Fundamental analysis looks at which of the following?
Select one:
a. Future earnings
b. Dividends
c. Expected levels of interest rates
d. The firm's risk
e. All of these
e. All of these
Your father-in-law's stockbroker examines future earnings and dividends, the expected level of interest rates, and the firm's risk to provide a basis for buy-sell recommendations. This stockbroker uses the ________ approach to stock valuation.
Select one:
d. fundamental analysis
A buy-and-hold investment strategy
Select one:
a. avoids timing the market.
b. minimizes transaction costs.
c. postpones capital gains taxes.
d. means your gains will be taxed as long-term capital gains.
e. All of these
e. All of these
The experts say that a person under the age of 40 should have a majority of their retirement money invested in the stock markets. What is the reason for this?
Select one:
a. On average, common stocks provide a higher return on investment than other invest
e. Only On average, common stocks provide a higher return on investment than other investment options and Younger people have enough time ahead of them to ride out any dramatic market movements are correct.
Which of the following questions should potential investors answer before investing?
Select one:
a. Is this a good price for the stock?
b. Is this firm in a position that will allow profitability in the future?
c. Are this firm's strengths and weaknesses
e. All of these
You have just discovered one reason not to invest in stocks. What do you think it is?
Select one:
a. Stocks reduce risk through diversification.
b. Your tolerance of risk is low.
c. Over time, common stocks outperform all other investments.
d. Stocks are
b. Your tolerance of risk is low.
Because every company is almost certain to experience a bad year or two, holding on to stock for only one year
Select one:
a. is not a very sound investment decision.
b. is a very sound investment decision.
c. is a good idea for those who may need to liqu
a. is not a very sound investment decision.
Compared to other investment options, we can safely say that investing in stocks
Select one:
a. has equal risk.
b. has greater risk.
c. has less risk.
d. is not worth the risk.
b. has greater risk.
In October 2008, most of the major stock indices around the world plummeted in value. The most likely cause for these dramatic events were
Select one:
a. non-systematic risk.
b. variable betas.
c. systematic risk.
d. None of these are correct.
c. systematic risk.