FP Unit 3 3.03/04

Front

Which is a poor way to find companies in which to invest? Options: Read reputable investment magazines and newspapers, Discuss investment opportunities with family and friends, Follow suggestions in unsolicited emails and phone calls, Investigate business that have interesting products and services

Back

Follow suggestions in unsolicited emails and phone calls

Front

Which is a poor way to find companies in which to invest?

Back

dilute the value of big gains on an individual stock.

Front

Which statement is true about assessing the fundamentals of a security? Options: Fundamental analysis results in a reliable prediction of the stock price for the next year. , Fundamental analysis is a complicated procedure that is inappropriate for beginning investors. , Even investment experts disagree about the most important ratios to consider in fundamental analysis. , The only valid approach to fundamental analysis is based on the work of investment guru Warren Buffett.

Back

Even investment experts disagree about the most important ratios to consider in fundamental analysis.

Front

Which is an appropriate investment objective for a mutual fund with a buy-and-hold approach? Options: covering a broad range of industries, seeking long-term capital appreciation, investing primarily in a diversified portfolio, investing in stocks with superior growth potential

Back

seeking long-term capital appreciation

Front

For assessing the value of a stock, which represents an invalid qualitative factor to consider? Options: staying on top of trends, offering more healthful food, employing experienced managers, paying the CEO a reasonable amount

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offering more healthful food

Front

The most important factor to consider when choosing an investment is:

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whether the investment supports financial goals

Front

A class of financial ratios that measures the ability of a company to turn available resources into cash and to pay its bills is called:

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liquidity ratios

Front

The price-earnings (PE) ratio measures:

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investors expectations about a company's performance

Front

The PEG ratio is unique because it incorporates price, earnings, and:

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growth rate of earnings

Front

When assessing a stock by using fundamental analysis, an investor should consider:

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qualitative and quantitative factors