Question 1

Kate Babini owns 250 shares of Gildan Activewear.Suppose that for the last calendar quarter,Gildan paid $0.28 a share.What is the total amount she received in her dividend cheque for this quarter?

Accepted Answer

A)   $0.28
B)   $2.80
C)   $70.00
D)   $250.00
E)   $892.00

Question 2

If an investor owns participating preferred stock,missed or omitted dividends accumulate and must be paid before any cash dividend is paid to common stockholders.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following statements is not true?

Accepted Answer

A)   Corporations are required by law to have two stockholder meetings each year.
B)   Stockholders must approve any amendment of the corporate charter.
C)   Stockholders must approve the sale of certain corporate assets.
D)   Corporations are required by law to distribute annual reports.
E)   Stockholders may vote in person or by proxy.

Question 4

The price earnings ratio is a corporation's after-tax earnings divided by the corporation's earnings per share of stock outstanding over the last 12 months.

Accepted Answer

A) True 
 B)False

Question 5

Typically,growth companies pay out ____________ of their earnings in dividends to their stockholders.

Accepted Answer

A)   over 95 percent
B)   between 65 percent and 75 percent
C)   between 50 and 65 percent
D)   between 30 and 50 percent
E)   less than 30 percent E

Question 6

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

Question 7

A public corporation is a corporation whose stock is owned by relatively few people and is not traded openly in the stock market.

Accepted Answer

A) True 
 B)False

Question 8

Capital gains yield is the stock's appreciation in value divided by its end-of-year stock price.

Accepted Answer

A) True 
 B)False

Question 9

A stock that is issued by a corporation that has a large amount of capitalization is called a(n) ____________ stock.

Accepted Answer

A)   small-cap
B)   medium-cap
C)   large-cap
D)   unlimited-cap
E)   giant-cap

Question 10

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 11

A long-term investment technique used by investors to purchase stock without paying a commission to a broker is called

Accepted Answer

A)   dollar cost appreciation.
B)   direct investment plan.
C)   unregulated transaction.
D)   regulated transaction.
E)   over-the-counter transaction.

Question 12

Which of the following is not a true statement?

Accepted Answer

A)   An investment bank is a financial firm that assists organizations in raising funds.
B)   A large corporation often uses an investment bank to sell and distribute a new stock issue.
C)   Analysts for the investment bank examine the corporation's financial position to determine whether the new stock issue is financially sound.
D)   If the investment bank is satisfied that the new stock issue is a good risk,it will buy the stock and hold it for at least one year.
E)   The investment bank resells a new stock issue to its customers-commercial banks,insurance companies,pension funds,mutual funds,and the general public.

Question 13

The federal government requires corporations selling new issues of securities to disclose information about corporate earnings,assets and liabilities,products or services,and the qualifications of top management in a prospectus.

Accepted Answer

A) True 
 B)False  True

Question 14

Preferred stocks are often referred to as "middle" investments.

Accepted Answer

A) True 
 B)False

Question 15

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)   $1,120
E)   $1,200

Question 16

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 17

A defensive stock is a stock that typically sells for less than $l.

Accepted Answer

A) True 
 B)False

Question 18

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 19

When investors are optimistic about the overall economy and buy stocks,it is known as a(n) ____________ market.

Accepted Answer

A)   book
B)   bear
C)   bull
D)   equity
E)   declining

Question 20

Equity financing is a popular choice to provide long-term financing for a corporation because

Accepted Answer

A)   a lender is always available to provide this type of financing.
B)   it does not have to be repaid.
C)   repayment doesn't have to be made for ten years or more.
D)   only interest must be paid for the first five years.
E)   it does not cost anything to sell in the primary market. B

Exam 11: Investing Basics and Evaluating Bonds

Kate Babini owns 250 shares of Gildan Activewear.Suppose that for the last calendar quarter,Gildan paid $0.28 a share.What is the total amount she received in her dividend cheque for this quarter?

Correct Answer
verified

If an investor owns participating preferred stock,missed or omitted dividends accumulate and must be paid before any cash dividend is paid to common stockholders.

Correct Answer
verified

Which of the following statements is not true?

Correct Answer
verified

The price earnings ratio is a corporation's after-tax earnings divided by the corporation's earnings per share of stock outstanding over the last 12 months.

Correct Answer
verified

Typically,growth companies pay out ____________ of their earnings in dividends to their stockholders.

Correct Answer
verified
E

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

A public corporation is a corporation whose stock is owned by relatively few people and is not traded openly in the stock market.

Correct Answer
verified

Capital gains yield is the stock's appreciation in value divided by its end-of-year stock price.

Correct Answer
verified

A stock that is issued by a corporation that has a large amount of capitalization is called a(n) ____________ stock.

Correct Answer
verified

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

Correct Answer
verified

A long-term investment technique used by investors to purchase stock without paying a commission to a broker is called

Correct Answer
verified

Which of the following is not a true statement?

Correct Answer
verified

The federal government requires corporations selling new issues of securities to disclose information about corporate earnings,assets and liabilities,products or services,and the qualifications of top management in a prospectus.

Correct Answer
verified
True

Preferred stocks are often referred to as "middle" investments.

Correct Answer
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Correct Answer
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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 defensive stock is a stock that typically sells for less than $l.

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

When investors are optimistic about the overall economy and buy stocks,it is known as a(n) ____________ market.

Correct Answer
verified

Equity financing is a popular choice to provide long-term financing for a corporation because

Correct Answer
verified
B

Exam 11: Investing Basics and Evaluating Bonds

Kate Babini owns 250 shares of Gildan Activewear.Suppose that for the last calendar quarter,Gildan paid $0.28 a share.What is the total amount she received in her dividend cheque for this quarter?

Correct AnswerverifiedShow Answer

If an investor owns participating preferred stock,missed or omitted dividends accumulate and must be paid before any cash dividend is paid to common stockholders.

Correct AnswerverifiedShow Answer

Which of the following statements is not true?

Correct AnswerverifiedShow Answer

The price earnings ratio is a corporation's after-tax earnings divided by the corporation's earnings per share of stock outstanding over the last 12 months.

Correct AnswerverifiedShow Answer

Typically,growth companies pay out ____________ of their earnings in dividends to their stockholders.

Correct AnswerverifiedE

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 AnswerverifiedShow Answer

A public corporation is a corporation whose stock is owned by relatively few people and is not traded openly in the stock market.

Correct AnswerverifiedShow Answer

Capital gains yield is the stock's appreciation in value divided by its end-of-year stock price.

Correct AnswerverifiedShow Answer

A stock that is issued by a corporation that has a large amount of capitalization is called a(n) ____________ stock.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A long-term investment technique used by investors to purchase stock without paying a commission to a broker is called

Correct AnswerverifiedShow Answer

Which of the following is not a true statement?

Correct AnswerverifiedShow Answer

The federal government requires corporations selling new issues of securities to disclose information about corporate earnings,assets and liabilities,products or services,and the qualifications of top management in a prospectus.

Correct AnswerverifiedTrue

Preferred stocks are often referred to as "middle" investments.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow 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 defensive stock is a stock that typically sells for less than $l.

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

When investors are optimistic about the overall economy and buy stocks,it is known as a(n) ____________ market.

Correct AnswerverifiedShow Answer

Equity financing is a popular choice to provide long-term financing for a corporation because

Correct AnswerverifiedB

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E

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True

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B