Question 1

For investors who desire the least possible risk,a share of stock in an established corporation provides the safest investment.

Accepted Answer

A) True 
 B)False

Question 2

The threat of terrorist attacks tends to depress stock market prices.

Accepted Answer

A) True 
 B)False

Question 3

A recent publication referred to a series of bonds as "the 6s of 25".

Accepted Answer

A)   This means that they were issued in 2006,and they mature in 2025.
B)   This means that any bond in this issue,whose series' numbers end in "6" are callable in the year 2025.
C)   This means they are 25-year bonds,due on 2006.
D)   This means they pay 6% interest and they mature in 2025.

Question 4

Standard and Poor's and Moody's are well-known companies that rate bonds.

Accepted Answer

A) True 
 B)False

Question 5

In reviewing the firms whose stocks comprise the Dow Jones Industrial Average,we discover:

Accepted Answer

A)   The same 30 stocks have been used since the inception of the indicator.
B)   Different companies are used each year.
C)   These stocks change periodically as deemed appropriate.
D)   There is an even mix between big and small companies.

Question 6

An investment that pools together investors' money in order to buy securities in many different companies or governments is a __________.

Accepted Answer

A)   commercial fund
B)   mutual fund
C)   holding company
D)   Public Investment Corporation

Question 7

Most investment advisors put mutual funds high on the list of recommended investments for experienced investors,but consider them too risky for beginning investors.

Accepted Answer

A) True 
 B)False

Question 8

Stock quotations are now available online.Which of the following pieces of information is not likely to be on the stock quotation?

Accepted Answer

A)   52-week high price
B)   P/E ratio
C)   Dividend
D)   Profit for most recent quarter

Question 9

Paula's Pasta Paradise plans to offer their first stock sale to the general public.Prior to selling their stock,the firm must:

Accepted Answer

A)   pay dividends to the existing stockholders.
B)   register its stock offering with the SEC.
C)   establish an initial selling price that cannot exceed $25 per share.
D)   determine the brokers that will initially trade their stock offering.

Question 10

The initial cost of investing in mutual funds depends in part on:

Accepted Answer

A)   whether the fund is a load or no-load fund.
B)   the risk tolerance of the companies in the fund.
C)   the tax rate on capital gains.
D)   the imposition of government tariffs.

Question 11

Which of the following would be classified as an institutional investor?

Accepted Answer

A)   Pension funds
B)   Federal Reserve banks
C)   Stock exchanges
D)   Commodity brokers

Question 12

Another name for the fixed rate of interest attached to a bond is the:

Accepted Answer

A)   Yield to maturity.
B)   Dividend.
C)   Coupon rate.
D)   Security rate.

Question 13

The Securities and Exchange Commission does not intercede in any way in the process of an IPO.Doing so would disrupt the natural process of the capital markets.

Accepted Answer

A) True 
 B)False

Question 14

Hottie Potatee,Inc.wants to raise an undisclosed amount of funds in order to expand the company-owned potato bar stores overseas.The CFO (Chief Financial Officer)of the company will negotiate with an expert at the FTC (Federal Trade Commission)who will underwrite the issue of stock that Hottie Potatee plans to offer.

Accepted Answer

A) True 
 B)False

Question 15

Elaine plans to purchase 100 shares of Michigan International stock at $44 per share.The current margin rate is 40%.The maximum amount that Elaine could borrow from her broker is:

Accepted Answer

A)   $1,100.
B)   $1,760.
C)   $2,640.
D)   $4,400.

Question 16

Ricardo owns 100 shares of stock in the ABC Corporation that currently sell for $100 per share.ABC just announced a two-for-one stock split for all current stockholders.Ricardo now owns $20,000 worth of stock in the ABC Corporation.

Accepted Answer

A) True 
 B)False

Question 17

The Dow Jones Industrial Average represents the average price of ________ industrial stocks.

Accepted Answer

A)   11
B)   30
C)   500
D)   all of these

Question 18

If the firm should find itself in bankruptcy,preferred stockholders would have claim to the value of any remaining assets before common stockholders.

Accepted Answer

A) True 
 B)False

Question 19

Insider trading involves the sale of stock to employees at discounted prices.

Accepted Answer

A) True 
 B)False

Question 20

Idle Time Gaming announced a 2 for 1 common stock split for investors on record.Which of the following will occur?

Accepted Answer

A)   The stock price will increase to reflect the value of 2 shares for every one share.
B)   Each share will be worth ½ of its previous value,but shareholders total value of Idle Time Gaming will remain the same.
C)   The value of Idle Time common stock will remain the same,for a short period of time,and then experience a guaranteed growth spurt.
D)   The shareholders will sell their shares immediately after the split and take their capital gains,as well as provide others an opportunity to invest in Idle Time Gaming.

Exam 19: Using Securities Markets for Financing and Investing Opportunities

Stock quotations are now available online.Which of the following pieces of information is not likely to be on the stock quotation?

Correct Answer
verified

If the firm should find itself in bankruptcy,preferred stockholders would have claim to the value of any remaining assets before common stockholders.

Correct Answer
verified

A recent publication referred to a series of bonds as "the 6s of 25".

Correct Answer
verified

Idle Time Gaming announced a 2 for 1 common stock split for investors on record.Which of the following will occur?

Correct Answer
verified

Ricardo owns 100 shares of stock in the ABC Corporation that currently sell for $100 per share.ABC just announced a two-for-one stock split for all current stockholders.Ricardo now owns $20,000 worth of stock in the ABC Corporation.

Correct Answer
verified

The threat of terrorist attacks tends to depress stock market prices.

Correct Answer
verified

Paula's Pasta Paradise plans to offer their first stock sale to the general public.Prior to selling their stock,the firm must:

Correct Answer
verified

In reviewing the firms whose stocks comprise the Dow Jones Industrial Average,we discover:

Correct Answer
verified

Most investment advisors put mutual funds high on the list of recommended investments for experienced investors,but consider them too risky for beginning investors.

Correct Answer
verified

Insider trading involves the sale of stock to employees at discounted prices.

Correct Answer
verified

Another name for the fixed rate of interest attached to a bond is the:

Correct Answer
verified

An investment that pools together investors' money in order to buy securities in many different companies or governments is a __________.

Correct Answer
verified

Which of the following would be classified as an institutional investor?

Correct Answer
verified

For investors who desire the least possible risk,a share of stock in an established corporation provides the safest investment.

Correct Answer
verified

The initial cost of investing in mutual funds depends in part on:

Correct Answer
verified

Standard and Poor's and Moody's are well-known companies that rate bonds.

Correct Answer
verified

The Dow Jones Industrial Average represents the average price of ________ industrial stocks.

Correct Answer
verified

Correct Answer
verified

Elaine plans to purchase 100 shares of Michigan International stock at $44 per share.The current margin rate is 40%.The maximum amount that Elaine could borrow from her broker is:

Correct Answer
verified

The Securities and Exchange Commission does not intercede in any way in the process of an IPO.Doing so would disrupt the natural process of the capital markets.

Correct Answer
verified

Exam 19: Using Securities Markets for Financing and Investing Opportunities

Stock quotations are now available online.Which of the following pieces of information is not likely to be on the stock quotation?

Correct AnswerverifiedShow Answer

If the firm should find itself in bankruptcy,preferred stockholders would have claim to the value of any remaining assets before common stockholders.

Correct AnswerverifiedShow Answer

A recent publication referred to a series of bonds as "the 6s of 25".

Correct AnswerverifiedShow Answer

Idle Time Gaming announced a 2 for 1 common stock split for investors on record.Which of the following will occur?

Correct AnswerverifiedShow Answer

Ricardo owns 100 shares of stock in the ABC Corporation that currently sell for $100 per share.ABC just announced a two-for-one stock split for all current stockholders.Ricardo now owns $20,000 worth of stock in the ABC Corporation.

Correct AnswerverifiedShow Answer

The threat of terrorist attacks tends to depress stock market prices.

Correct AnswerverifiedShow Answer

Paula's Pasta Paradise plans to offer their first stock sale to the general public.Prior to selling their stock,the firm must:

Correct AnswerverifiedShow Answer

In reviewing the firms whose stocks comprise the Dow Jones Industrial Average,we discover:

Correct AnswerverifiedShow Answer

Most investment advisors put mutual funds high on the list of recommended investments for experienced investors,but consider them too risky for beginning investors.

Correct AnswerverifiedShow Answer

Insider trading involves the sale of stock to employees at discounted prices.

Correct AnswerverifiedShow Answer

Another name for the fixed rate of interest attached to a bond is the:

Correct AnswerverifiedShow Answer

An investment that pools together investors' money in order to buy securities in many different companies or governments is a __________.

Correct AnswerverifiedShow Answer

Which of the following would be classified as an institutional investor?

Correct AnswerverifiedShow Answer

For investors who desire the least possible risk,a share of stock in an established corporation provides the safest investment.

Correct AnswerverifiedShow Answer

The initial cost of investing in mutual funds depends in part on:

Correct AnswerverifiedShow Answer

Standard and Poor's and Moody's are well-known companies that rate bonds.

Correct AnswerverifiedShow Answer

The Dow Jones Industrial Average represents the average price of ________ industrial stocks.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Elaine plans to purchase 100 shares of Michigan International stock at $44 per share.The current margin rate is 40%.The maximum amount that Elaine could borrow from her broker is:

Correct AnswerverifiedShow Answer

The Securities and Exchange Commission does not intercede in any way in the process of an IPO.Doing so would disrupt the natural process of the capital markets.

Correct AnswerverifiedShow Answer

Correct Answer
verified

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