Question 1

MasterCracked Manufacturing has after-tax profits that total $725,000.If the firm has 250,000 shares, what is the amount of earnings per share?

Accepted Answer

A)  $1.25
B)  $2
C)  $2.90
D)  $2.50
E)  It is impossible to calculate earnings per share with this information.F) B) and C)
G) D) and E)

Question 2

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.F) A) and B)
G) All of the above

Question 3

Ammar purchased 100 shares of Northern Bank at $55 dollars a share in January of 2004.The shares subsequently split two-for-one on December 31, 2004 after paying an annual dividend of $1.00 per share.If Ammar sells all of his shares on the first trading day in January 2005 for $30 each, what has been his return on investment?

Accepted Answer

A)  Zero
B)  9.1%
C)  10.0%
D)  10.9%
E)  15%F) A) and B)
G) C) and D)

Question 4

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.F) A) and B)
G) B) and C)

Question 5

When the board of directors approves a three for one stock split, the price for each share of stock

Accepted Answer

A)  remains unchanged.
B)  increases in value.
C)  decreases in value.
D)  is guaranteed to go up within a short period of time.
E)  always drops to a third of its former value.F) A) and E)
G) A) and B)

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

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.F) C) and D)
G) A) and D)

Question 8

A stock split is a procedure in which a stockholder's common stock is exchanged for preferred stock.

Accepted Answer

A) True 
 B)False

Question 9

By using the Canada.Com Finance Web site, an investor can find information on all of the following except

Accepted Answer

A)  inside information.
B)  the corporation's stock symbol.
C)  current market values.
D)  research information.
E)  historical market quotes.F) D) and E)
G) B) and C)

Question 10

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)  $1,200F) B) and C)
G) A) and E)

Question 11

A small-cap stock is a stock issued by a company that has capitalization of $150 million or less.

Accepted Answer

A) True 
 B)False

Question 12

Corporations issue preferred stock because it provides an alternative to financing through corporate bonds or common stock.

Accepted Answer

A) True 
 B)False

Question 13

Assume that you purchased 200 shares of C-Mac Industries stock for $110 a share, that you received an annual dividend of $4.00 a share, and that you then sold your stock for $130 a share at the end of one year.What is the total profit on your investment? (Ignore commission amounts for this question.)

Accepted Answer

A)  $200
B)  $400
C)  $4,800
D)  $800
E)  $2,200F) B) and E)
G) A) and B)

Question 14

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.F) A) and B)
G) C) and D)

Question 15

To calculate the annual dividend yield, the annual dividend is divided by the stock's

Accepted Answer

A)  current price.
B)  historical average price.
C)  future price.
D)  beginning-of-year price.
E)  end-of-year price.F) D) and E)
G) A) and B)

Question 16

A public corporation is a corporation whose stocks are traded openly in stock markets and may be purchased by individuals.

Accepted Answer

A) True 
 B)False

Question 17

Doug Baker bought Toronto Dominion stocks for $50 a share one year ago.He sold the stock a year later for $55.50 a share.What was John's capital gains yield?

Accepted Answer

A)  3 percent
B)  3.50 percent
C)  9.9 percent
D)  11 percent
E)  111 percentF) C) and E)
G) A) and C)

Question 18

A stock that pays higher than average dividends is called an income stock.

Accepted Answer

A) True 
 B)False

Question 19

Dollar-cost averaging enables investors to avoid the problem of buying high and selling low.

Accepted Answer

A) True 
 B)False

Question 20

Which of these is not a sign for potential online investment scams?

Accepted Answer

A)  high pressure tactics to buy from people you do not know
B)  promises of high profits and sales relating to products of a new company
C)  large-cap companies that pay a generous executive salary
D)  reverse splits
E)  small-cap companies investing in projects unrelated to their businessesF) A) and E)
G) C) and D)

Exam 11: Investing in Stocks

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

To calculate the annual dividend yield, the annual dividend is divided by the stock's

Correct Answer
verified

Correct Answer
verified

Doug Baker bought Toronto Dominion stocks for $50 a share one year ago.He sold the stock a year later for $55.50 a share.What was John's capital gains yield?

Correct Answer
verified

Corporations issue preferred stock because it provides an alternative to financing through corporate bonds or common stock.

Correct Answer
verified

When the board of directors approves a three for one stock split, the price for each share of stock

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

MasterCracked Manufacturing has after-tax profits that total $725,000.If the firm has 250,000 shares, what is the amount of earnings per share?

Correct Answer
verified

A small-cap stock is a stock issued by a company that has capitalization of $150 million or less.

Correct Answer
verified

A stock that pays higher than average dividends is called an income stock.

Correct Answer
verified

Which of the following is not a true statement?

Correct Answer
verified

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

Correct Answer
verified

Which of these is not a sign for potential online investment scams?

Correct Answer
verified

Correct Answer
verified

Which of the following statements is not true?

Correct Answer
verified

Dollar-cost averaging enables investors to avoid the problem of buying high and selling low.

Correct Answer
verified

A stock split is a procedure in which a stockholder's common stock is exchanged for preferred stock.

Correct Answer
verified

By using the Canada.Com Finance Web site, an investor can find information on all of the following except

Correct Answer
verified

A public corporation is a corporation whose stocks are traded openly in stock markets and may be purchased by individuals.

Correct Answer
verified

Exam 11: Investing in Stocks

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

To calculate the annual dividend yield, the annual dividend is divided by the stock's

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Doug Baker bought Toronto Dominion stocks for $50 a share one year ago.He sold the stock a year later for $55.50 a share.What was John's capital gains yield?

Correct AnswerverifiedShow Answer

Corporations issue preferred stock because it provides an alternative to financing through corporate bonds or common stock.

Correct AnswerverifiedShow Answer

When the board of directors approves a three for one stock split, the price for each share of stock

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

MasterCracked Manufacturing has after-tax profits that total $725,000.If the firm has 250,000 shares, what is the amount of earnings per share?

Correct AnswerverifiedShow Answer

A small-cap stock is a stock issued by a company that has capitalization of $150 million or less.

Correct AnswerverifiedShow Answer

A stock that pays higher than average dividends is called an income stock.

Correct AnswerverifiedShow Answer

Which of the following is not a true statement?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of these is not a sign for potential online investment scams?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following statements is not true?

Correct AnswerverifiedShow Answer

Dollar-cost averaging enables investors to avoid the problem of buying high and selling low.

Correct AnswerverifiedShow Answer

A stock split is a procedure in which a stockholder's common stock is exchanged for preferred stock.

Correct AnswerverifiedShow Answer

By using the Canada.Com Finance Web site, an investor can find information on all of the following except

Correct AnswerverifiedShow Answer

A public corporation is a corporation whose stocks are traded openly in stock markets and may be purchased by individuals.

Correct AnswerverifiedShow 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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified