Question 1

Which of the following is a long-term stock investment technique?

Accepted Answer

A)   Purchasing on margin
B)   Selling short
C)   Dollar cost averaging
D)   Trading in options
E)   Buy low, sell high

Question 2

Joanne Blower owns 200 shares of Corel Corporation stock. She purchased the stock for $22 a share. She sold her stock for $28 a share. The commissions required to buy and sell her stock totaled $180. Assuming that she received no dividends during the time she owned the stock, what is her total profit from this transaction?

Accepted Answer

A)   $180
B)   $780
C)   $1,380
D)   $1,020
E)   $1,200

Question 3

A request that an order be executed at the next available opportunity after the market price of the stock reaches a specified price is called a ____________ order.

Accepted Answer

A)   market
B)   limit
C)   stop
D)   round
E)   discretionary

Question 4

An order to buy or sell a security that lets the broker decide when to execute the transaction and at what price is called a ____________ order.

Accepted Answer

A)   market
B)   limit
C)   stop
D)   round
E)   discretionary

Question 5

A stock split is a procedure in which the shares of stock owned by existing shareholders are divided into a larger number of shares.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A)   market
B)   limit
C)   stop
D)   round
E)   discretionary

Question 7

Assume the beta for the stock market in general is 1.0 and that the beta for World-Wide Television Productions is 2.4. Which of these statements is not true?

Accepted Answer

A)   The average stock is less risky than World-Wide Television Productions stock.
B)   World-Wide Television Productions stock is more risky than the average stock.
C)   Beta compares the risk of a specific stock issue with the risk of the stock market in general.
D)   Most stocks have betas between 0.5 and 2.
E)   World-Wide Television Productions stock is less risky than the average stock.

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)   primary

Question 9

The investment bank's commission or spread:

Accepted Answer

A)   depends on the quality of the issuing corporation
B)   depends on the financial health of the issuing corporation
C)   reflects the transfer of risk of raising funds to the investment bank
D)   A and B are correct
E)   A, B and C are correct E

Question 10

Which one of the following is not a true statement?

Accepted Answer

A)   The over-the-counter market is a network of dealers who buy and sell the securities of corporations that are not listed on a securities exchange.
B)   Account executives in the OTC market specialize or make a market in the securities of one or more specific firms.
C)   Most OTC trading is conducted in person in the account executive's office.
D)   Since 1971, account executives' operating in the OTC market have used an electronic quotation system called NASDAQ.
E)   NASDAQ is regulated by the National Association of Securities Dealers.

Question 11

A long-term technique used by investors who purchase stocks and hold onto them for a number of years

Accepted Answer

A)   dollar cost averaging.
B)   dividend reinvestment plan.
C)   buy and hold technique.
D)   regulated transaction.
E)   secured transaction.

Question 12

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

Accepted Answer

Corporations issue common stock for the ...

Question 13

The right of current stockholders to purchase any new stock that the corporation issues before it is offered to the general public is called a ____________ right.

Accepted Answer

A)   conversion
B)   convertible
C)   mandatory
D)   preemptive
E)   corporate

Question 14

A call option gives the owner the right to sell 100 shares of a stock at a guaranteed price before a definite expiration date.

Accepted Answer

A) True 
 B)False  False

Question 15

A corporation whose stock is owned by relatively few people and is not traded openly in stock markets is called a(n)  ____________ corporation.

Accepted Answer

A)   public
B)   private
C)   partnership
D)   common
E)   preferred

Question 16

Colin owns 100 shares of RIM stock. He purchased the stock for $100 a share. He sold the stock for $75 a share. The commissions required to buy and sell the stock totaled $60. Assuming that he received no dividends during the time he owned the stock, what is his total profit or loss from this transaction?

Accepted Answer

A)   Profit $2,500
B)   Profit $60.00
C)   Loss $2,500
D)   Loss $2,560
E)   Loss $2,440

Question 17

The NASDAQ is an electronic marketplace for over 10,000 different stocks.

Accepted Answer

A) True 
 B)False

Question 18

You shouldn't be wary of any stocks that you learn about on financial bulletin boards, chat room, newsgroups or email.

Accepted Answer

A) True 
 B)False

Question 19

Marianne Walsh bought XYZ Corporation stocks for $26 a share at the beginning of 2001. At year-end, she received a dividend of $1.75 per share and then sold the stock for $30.50 a share. What was Marianne's annual shareholder return on the investment?

Accepted Answer

A)   6.25 percent
B)   10.83 percent
C)   17.31 percent
D)   20.49 percent
E)   24.04 percent

Question 20

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)   discretionary B

Exam 11: Investing in Stocks

Which of the following is a long-term stock investment technique?

Correct Answer
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Correct Answer
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A request that an order be executed at the next available opportunity after the market price of the stock reaches a specified price is called a ____________ order.

Correct Answer
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An order to buy or sell a security that lets the broker decide when to execute the transaction and at what price is called a ____________ order.

Correct Answer
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A stock split is a procedure in which the shares of stock owned by existing shareholders are divided into a larger number of shares.

Correct Answer
verified

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

Correct Answer
verified

Assume the beta for the stock market in general is 1.0 and that the beta for World-Wide Television Productions is 2.4. Which of these statements is not true?

Correct Answer
verified

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

Correct Answer
verified

The investment bank's commission or spread:

Correct Answer
verified
E

Which one of the following is not a true statement?

Correct Answer
verified

A long-term technique used by investors who purchase stocks and hold onto them for a number of years

Correct Answer
verified

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

Correct Answer
verified
Corporations issue common stock for the ...
View Answer

The right of current stockholders to purchase any new stock that the corporation issues before it is offered to the general public is called a ____________ right.

Correct Answer
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A call option gives the owner the right to sell 100 shares of a stock at a guaranteed price before a definite expiration date.

Correct Answer
verified
False

A corporation whose stock is owned by relatively few people and is not traded openly in stock markets is called a(n) ____________ corporation.

Correct Answer
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Correct Answer
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The NASDAQ is an electronic marketplace for over 10,000 different stocks.

Correct Answer
verified

You shouldn't be wary of any stocks that you learn about on financial bulletin boards, chat room, newsgroups or email.

Correct Answer
verified

Marianne Walsh bought XYZ Corporation stocks for $26 a share at the beginning of 2001. At year-end, she received a dividend of $1.75 per share and then sold the stock for $30.50 a share. What was Marianne's annual shareholder return on the investment?

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

Correct Answer
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B

Exam 11: Investing in Stocks

Which of the following is a long-term stock investment technique?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A request that an order be executed at the next available opportunity after the market price of the stock reaches a specified price is called a ____________ order.

Correct AnswerverifiedShow Answer

An order to buy or sell a security that lets the broker decide when to execute the transaction and at what price is called a ____________ order.

Correct AnswerverifiedShow Answer

A stock split is a procedure in which the shares of stock owned by existing shareholders are divided into a larger number of shares.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Assume the beta for the stock market in general is 1.0 and that the beta for World-Wide Television Productions is 2.4. Which of these statements is not true?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The investment bank's commission or spread:

Correct AnswerverifiedE

Which one of the following is not a true statement?

Correct AnswerverifiedShow Answer

A long-term technique used by investors who purchase stocks and hold onto them for a number of years

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

The right of current stockholders to purchase any new stock that the corporation issues before it is offered to the general public is called a ____________ right.

Correct AnswerverifiedShow Answer

A call option gives the owner the right to sell 100 shares of a stock at a guaranteed price before a definite expiration date.

Correct AnswerverifiedFalse

A corporation whose stock is owned by relatively few people and is not traded openly in stock markets is called a(n) ____________ corporation.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The NASDAQ is an electronic marketplace for over 10,000 different stocks.

Correct AnswerverifiedShow Answer

You shouldn't be wary of any stocks that you learn about on financial bulletin boards, chat room, newsgroups or email.

Correct AnswerverifiedShow Answer

Marianne Walsh bought XYZ Corporation stocks for $26 a share at the beginning of 2001. At year-end, she received a dividend of $1.75 per share and then sold the stock for $30.50 a share. What was Marianne's annual shareholder return on the investment?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedB

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E

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Corporations issue common stock for the ...
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False

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B