Fin Lit Final Exam Review

Dividing a stock's current price per share by the issuing company's earnings per share results in:

• the share value

• the dividend yield

• the price to earnings ratio

Stocks, bonds and mutual funds are all part of:

• an initial public offering

• an industry sector

• a diversified portfolio

The S&P 500 index is made up of

• the 500 best performing stocks on the NASDAQ

• 500 large cap stocks from a variety of sectors

• 500 stocks that are made up of small, mid-cap and large-cap companies

The NASDAQ 100, the Dow Jones Industrial Average and the Russell 2000 are examples of:

• a stock report

• stock exchanges

• stock indices

Diversification creates:

• more risk in a portfolio

• less diversity in a portfolio

• less risk in a portfolio

A mutual fund without a sales charge is called

• load fund

• no-load fund

• 12b-1 fund

Investors with a low risk tolerance tend to seek stocks that are

• cyclical

• blue-chip

• small-cap

An industry is composed of:

• 10 to 15 stocks

• corporations with similar products and services

• industrial businesses working together

The Dow Jones Industrial Average represents:

• 30 blue chip stocks

• 30 of the most popular companies on the NYSE

• 300 industrial companies

Marcus has lots of money tied up in 3 different stocks and one government bond. A broker tells Marcus that his portfolio is not diversified enough. Marcus should:

• sell the government bond and buy a mutual fund

• sell one stock for another bond

• sell some of his stock and buy a mutual fund