Question 1

Individuals who buy and sell stock on a very short-term basis as a career are called ________.

Accepted Answer

The answer of Individuals who buy and sell stock on...

Question 2

Which of the following is not true regarding mutual funds?

Accepted Answer

A)  There are thousands of funds with many different investing objectives.
B)  They offer small investors diversification and professional management.
C)  Dividends received from their investments are used to pay operational expenses,and capital gains are passed on to the mutual fund shareowners.
D)  Both dividends and gains are distributed to mutual fund shareowners.E) All of the above
F) A) and B)

Question 3

Common stock is not

Accepted Answer

A)  issued by every firm that issues stock.
B)  riskier than preferred stock.
C)  given voting rights.
D)  guaranteed a dividend.E) B) and D)
F) None of the above

Question 4

What would be the return on a stock purchased at $20 per share,held for 5 years,and sold for $32.22? Ignore brokerage commissions and tax implications and assume the stock paid no dividends during the holding period.Round to the nearest whole percent if necessary.
(a)3%
(b)10%
(c)15%
(d)16%

Accepted Answer

(b)$32.22/$20 = 1.611 Referrin...

Question 5

Smart investors can find investments that generate high rates of returns with small amounts of risk.

Accepted Answer

A) True 
 B)False

Question 6

Since the gain received from the sale of stock is always taxed as ordinary income,you might want to time your sale to shift your profit from one year to another.

Accepted Answer

A) True 
 B)False

Question 7

Of the following statements about a day trader,which is not correct?

Accepted Answer

A)  They have a short-term focus.
B)  They may buy and sell on the same day.
C)  They are more risk averse than most investors.
D)  Day trading may be their career.E) B) and D)
F) B) and C)

Question 8

Of the following,which is not used in measuring a stock's return?

Accepted Answer

A)  Price of the stock at time of purchase
B)  Average price of stock during period owned
C)  Price of stock at time of sale
D)  Dividends earned during period ownedE) B) and D)
F) None of the above

Question 9

Institutional investors are professionals employed by a financial institution,who invest their own money earned from their jobs.

Accepted Answer

A) True 
 B)False

Question 10

The time value of money concepts do not include

Accepted Answer

A)  interest or the cost of money.
B)  payments of principal and interest.
C)  present and future values.
D)  the risks associated with various investments.E) A) and D)
F) A) and C)

Question 11

Describe how the decision to invest in stocks affects financial planning,liquidity management,financing,and protecting your wealth.

Accepted Answer

Stocks are part of the investment plan a...

Question 12

Before you start an investment program,you should ensure liquidity by having money in financial institutions or in money market securities.

Accepted Answer

A) True 
 B)False

Question 13

If you believe that a firm will grow rapidly in the future,you should buy its

Accepted Answer

A)  bonds.
B)  notes.
C)  common stock.
D)  preferred stock.E) B) and C)
F) A) and D)

Question 14

Which of the following statements is not true regarding individual investors?

Accepted Answer

A)  They commonly invest a portion of the money earned from their jobs.
B)  They invest in stocks to earn a reasonable return on their investments.
C)  They expect their money to grow by the time they wish to use it to make purchases.
D)  The number of individual investors has decreased in the last 20 years.E) B) and C)
F) All of the above

Question 15

The primary market is used by firms to raise funds and is a market where newly issued securities are traded.

Accepted Answer

A) True 
 B)False

Question 16

The best way to ensure that you will receive dividends is to

Accepted Answer

A)  day trade.
B)  purchase bonds.
C)  purchase common stock.
D)  purchase preferred stock.E) B) and C)
F) A) and B)

Question 17

The Internet should be used for all of the following except

Accepted Answer

A)  company financial statements.
B)  specific recommendation on which stocks to buy.
C)  stock prices.
D)  analysis of stocks and industries.E) B) and C)
F) All of the above

Question 18

What would be the return on 200 shares of stock purchased on January 1,2005 for $60 per share and sold on December 31,2005 at $80 per share? Also assume that the company paid dividends of $2 per share over the year.The prices include all brokerage fees.Round to the nearest whole percent.
(a)37%
(b)25%
(c)33%
(d)40%

Accepted Answer

(a)[(80 - ...

Question 19

Mutual fund gains can be in the form of dividends or capital gains,which are passed on to the individual investors.

Accepted Answer

A) True 
 B)False

Question 20

You have $10,000 to invest and would like to set these funds aside for retirement in 20 years.You should

Accepted Answer

A)  put the money in a money market savings account.
B)  buy a one-year CD.
C)  buy stocks of relatively stable firms that have low risk.
D)  invest in a diversified stock mutual fund.E) All of the above
F) B) and C)

Exam 14: Investing Fundamentals

Describe how the decision to invest in stocks affects financial planning,liquidity management,financing,and protecting your wealth.

Correct Answer
verified
Stocks are part of the investment plan a...
View Answer

Before you start an investment program,you should ensure liquidity by having money in financial institutions or in money market securities.

Correct Answer
verified

The time value of money concepts do not include

Correct Answer
verified

You have $10,000 to invest and would like to set these funds aside for retirement in 20 years.You should

Correct Answer
verified

What would be the return on a stock purchased at $20 per share,held for 5 years,and sold for $32.22? Ignore brokerage commissions and tax implications and assume the stock paid no dividends during the holding period.Round to the nearest whole percent if necessary. (a)3% (b)10% (c)15% (d)16%

Correct Answer
verified
(b)$32.22/$20 = 1.611 Referrin...
View Answer

Institutional investors are professionals employed by a financial institution,who invest their own money earned from their jobs.

Correct Answer
verified

Correct Answer
verified
(a)[(80 - ...
View Answer

Mutual fund gains can be in the form of dividends or capital gains,which are passed on to the individual investors.

Correct Answer
verified

Individuals who buy and sell stock on a very short-term basis as a career are called ________.

Correct Answer
verified

Smart investors can find investments that generate high rates of returns with small amounts of risk.

Correct Answer
verified

Which of the following statements is not true regarding individual investors?

Correct Answer
verified

The primary market is used by firms to raise funds and is a market where newly issued securities are traded.

Correct Answer
verified

The Internet should be used for all of the following except

Correct Answer
verified

Common stock is not

Correct Answer
verified

Which of the following is not true regarding mutual funds?

Correct Answer
verified

If you believe that a firm will grow rapidly in the future,you should buy its

Correct Answer
verified

The best way to ensure that you will receive dividends is to

Correct Answer
verified

Since the gain received from the sale of stock is always taxed as ordinary income,you might want to time your sale to shift your profit from one year to another.

Correct Answer
verified

Of the following,which is not used in measuring a stock's return?

Correct Answer
verified

Of the following statements about a day trader,which is not correct?

Correct Answer
verified

Exam 14: Investing Fundamentals

Describe how the decision to invest in stocks affects financial planning,liquidity management,financing,and protecting your wealth.

Correct AnswerverifiedStocks are part of the investment plan a...View AnswerShow Answer

Before you start an investment program,you should ensure liquidity by having money in financial institutions or in money market securities.

Correct AnswerverifiedShow Answer

The time value of money concepts do not include

Correct AnswerverifiedShow Answer

You have $10,000 to invest and would like to set these funds aside for retirement in 20 years.You should

Correct AnswerverifiedShow Answer

What would be the return on a stock purchased at $20 per share,held for 5 years,and sold for $32.22? Ignore brokerage commissions and tax implications and assume the stock paid no dividends during the holding period.Round to the nearest whole percent if necessary. (a)3% (b)10% (c)15% (d)16%

Correct Answerverified(b)$32.22/$20 = 1.611 Referrin...View AnswerShow Answer

Institutional investors are professionals employed by a financial institution,who invest their own money earned from their jobs.

Correct AnswerverifiedShow Answer

Correct Answerverified(a)[(80 - ...View AnswerShow Answer

Mutual fund gains can be in the form of dividends or capital gains,which are passed on to the individual investors.

Correct AnswerverifiedShow Answer

Individuals who buy and sell stock on a very short-term basis as a career are called ________.

Correct AnswerverifiedShow Answer

Smart investors can find investments that generate high rates of returns with small amounts of risk.

Correct AnswerverifiedShow Answer

Which of the following statements is not true regarding individual investors?

Correct AnswerverifiedShow Answer

The primary market is used by firms to raise funds and is a market where newly issued securities are traded.

Correct AnswerverifiedShow Answer

The Internet should be used for all of the following except

Correct AnswerverifiedShow Answer

Common stock is not

Correct AnswerverifiedShow Answer

Which of the following is not true regarding mutual funds?

Correct AnswerverifiedShow Answer

If you believe that a firm will grow rapidly in the future,you should buy its

Correct AnswerverifiedShow Answer

The best way to ensure that you will receive dividends is to

Correct AnswerverifiedShow Answer

Since the gain received from the sale of stock is always taxed as ordinary income,you might want to time your sale to shift your profit from one year to another.

Correct AnswerverifiedShow Answer

Of the following,which is not used in measuring a stock's return?

Correct AnswerverifiedShow Answer

Of the following statements about a day trader,which is not correct?

Correct AnswerverifiedShow Answer

Correct Answer
verified
Stocks are part of the investment plan a...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
(b)$32.22/$20 = 1.611 Referrin...
View Answer

Correct Answer
verified

Correct Answer
verified
(a)[(80 - ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified