Question 1

What is the primary difference between common stock and preferred stock?

Accepted Answer

The primary difference is that preferred...

Question 2

Mary Smith purchased 200 shares of Johnson electronics four years ago at $30.00 each.She paid a $30 commission on this transaction.She has decided to sell these shares at $50.00 each and will incur a $25 commission on this sale.What is the total investment amount?

Accepted Answer

A)  $3,945
B)  $6,000
C)  $6,030
D)  $9,975
E)  $10,000F) A) and C)
G) B) and D)

Question 3

Patsy Banz owns 220 shares of a stock.For the last calendar quarter,the company paid a dividend of $0.47 a share.What is the total amount she received in her dividend check for this quarter?

Accepted Answer

A)  $0.47
B)  $47.00
C)  $94.20
D)  $103.40
E)  $25.85F) None of the above
G) All of the above

Question 4

The federal government requires that a corporation selling a new issue of securities must disclose information about the company and its finances in a:

Accepted Answer

A)  annual report.
B)  quarterly report.
C)  accountant's audit report.
D)  prospectus.
E)  stock guide.F) A) and B)
G) B) and D)

Question 5

Regarding a stock split,the earnings "pie" before the split is ____size after the split.

Accepted Answer

A)  a smaller
B)  a larger
C)  double the
D)  the same
E)  unrelated to theF) B) and E)
G) C) and D)

Question 6

If the corporation has a bad year,the board of directors generally may vote to:

Accepted Answer

A)  sell less stock.
B)  decrease the stock price.
C)  cease selling stock.
D)  omit dividend payments.
E)  increase dividend payments.F) C) and E)
G) None of the above

Question 7

Arnell Johnson bought 200 shares of Black Petroleum Company for $95 per share and paid a commission of $60.He sold the stock five years later for $120 per share and paid $75 commission.While he held the stock,it paid a dividend of $5.50 per share.What was Arnell's total dollar return on this stock?

Accepted Answer

A)  $5,000
B)  $4,865
C)  $1,100
D)  $6,100
E)  $5,965F) B) and C)
G) B) and E)

Question 8

Common stock dividends are paid out of profits and:

Accepted Answer

A)  must be approved by the corporation's board of directors.
B)  are guaranteed to be paid quarterly.
C)  are paid prior to the firm's taxes.
D)  usually paid semi-annually.
E)  equal 100 percent of the firm's annual earnings.F) B) and D)
G) A) and B)

Question 9

A long-term investment technique used by investors to purchase stock directly from a corporation 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.F) None of the above
G) B) and E)

Question 10

A long-term investment technique that allows investors the option to reinvest cash dividends to purchase stock of the corporation is called:

Accepted Answer

A)  a direct investment plan.
B)  a dividend reinvestment plan.
C)  dollar cost averaging.
D)  buy-and-hold.
E)  day trading.F) A) and D)
G) B) and E)

Question 11

Preferred stock is often referred to as a middle investment as it has features similar to both common stock and corporate bonds.

Accepted Answer

A) True 
 B)False

Question 12

Regardless of a stock's classification,a stock is a _____investment because there are no guarantees.

Accepted Answer

A)  speculative
B)  conservative
C)  substitute
D)  unwise
E)  soundF) A) and B)
G) B) and E)

Question 13

Before a 2-for-1 stock split,Lisa's stock was valued at $50 per share.What is her per share value after the split?

Accepted Answer

A)  $25
B)  $50
C)  $100
D)  $125
E)  $150F) C) and E)
G) A) and B)

Question 14

Jennifer Fritz is thinking about purchasing the stock of the Sunshine Corporation at the current market price.What type of order should she place?

Accepted Answer

A)  Market order
B)  Limit order
C)  Stop order
D)  Discretionary order
E)  Common orderF) B) and D)
G) B) and C)

Question 15

After a 2-for-1 stock split:

Accepted Answer

A)  earnings per share decrease.
B)  earnings per share increase.
C)  capitalization decreases.
D)  capitalization increases.
E)  dividend yields decrease.F) A) and D)
G) A) and E)

Question 16

By using the internet,it is possible to find market price quotations,but more detailed financial information about a corporation is unavailable to the average investor.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following most likely does not charge a fee for you to access any of their information that may be used to evaluate a stock investment?

Accepted Answer

A)  Value Line
B)  Morningstar
C)  Yahoo! Finance
D)  Standard & Poor's
E)  ReutersF) C) and E)
G) B) and E)

Question 18

Carol Fisher wants to sell the stock of Hathaway International at the next available price after the market price reaches $50 per share.What type of order should she place?

Accepted Answer

A)  Market order
B)  Limit order
C)  Stop order
D)  Discretionary order
E)  Common orderF) B) and D)
G) C) and D)

Question 19

When choosing a brokerage firm,an investor should consider:

Accepted Answer

A)  the amount of the commissions they charge.
B)  how much research information is available.
C)  how much research information costs.
D)  how much help you need when making an investment decision.
E)  ANSE.All of these.F) B) and D)
G) A) and E)

Question 20

The annualized holding period yield calculation takes into account the time the investment is held.

Accepted Answer

A) True 
 B)False

Exam 14: Investing in Stock

Jennifer Fritz is thinking about purchasing the stock of the Sunshine Corporation at the current market price.What type of order should she place?

Correct AnswerverifiedShow Answer

If the corporation has a bad year,the board of directors generally may vote to:

Correct AnswerverifiedShow Answer

Arnell Johnson bought 200 shares of Black Petroleum Company for $95 per share and paid a commission of $60.He sold the stock five years later for $120 per share and paid $75 commission.While he held the stock,it paid a dividend of $5.50 per share.What was Arnell's total dollar return on this stock?

Correct AnswerverifiedShow Answer

Regardless of a stock's classification,a stock is a _____investment because there are no guarantees.

Correct AnswerverifiedShow Answer

By using the internet,it is possible to find market price quotations,but more detailed financial information about a corporation is unavailable to the average investor.

Correct AnswerverifiedShow Answer

Patsy Banz owns 220 shares of a stock.For the last calendar quarter,the company paid a dividend of $0.47 a share.What is the total amount she received in her dividend check for this quarter?

Correct AnswerverifiedShow Answer

The federal government requires that a corporation selling a new issue of securities must disclose information about the company and its finances in a:

Correct AnswerverifiedShow Answer

Regarding a stock split,the earnings "pie" before the split is ____size after the split.

Correct AnswerverifiedShow Answer

A long-term investment technique that allows investors the option to reinvest cash dividends to purchase stock of the corporation is called:

Correct AnswerverifiedShow Answer

Mary Smith purchased 200 shares of Johnson electronics four years ago at $30.00 each.She paid a $30 commission on this transaction.She has decided to sell these shares at $50.00 each and will incur a $25 commission on this sale.What is the total investment amount?

Correct AnswerverifiedShow Answer

When choosing a brokerage firm,an investor should consider:

Correct AnswerverifiedShow Answer

The annualized holding period yield calculation takes into account the time the investment is held.

Correct AnswerverifiedShow Answer

Before a 2-for-1 stock split,Lisa's stock was valued at $50 per share.What is her per share value after the split?

Correct AnswerverifiedShow Answer

After a 2-for-1 stock split:

Correct AnswerverifiedShow Answer

Preferred stock is often referred to as a middle investment as it has features similar to both common stock and corporate bonds.

Correct AnswerverifiedShow Answer

Carol Fisher wants to sell the stock of Hathaway International at the next available price after the market price reaches $50 per share.What type of order should she place?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Common stock dividends are paid out of profits and:

Correct AnswerverifiedShow Answer

Which of the following most likely does not charge a fee for you to access any of their information that may be used to evaluate a stock investment?

Correct AnswerverifiedShow Answer

What is the primary difference between common stock and preferred stock?

Correct AnswerverifiedThe primary difference is that preferred...View AnswerShow Answer

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The primary difference is that preferred...
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