Group 6-Banking and Finance

If a company's stock price is $100 and its earnings per share is $5, what is its P/E ratio?

• 10

• 15

• 20

• 25

How is the trailing P/E ratio calculated?

• Market price divided by future earnings per share

• Market price divided by earnings per share over the past four quarters

• Market price divided by book value

• Market price divided by dividend per share

What is the key difference between "odd lots" and "round lots" in stock trading?

• Odd lots refer to stock trades of exactly 100 shares, while round lots refer to any trade with fewer than 100 shares

• Round lots refer to stock trades of exactly 100 shares, while odd lots refer to trades of less than 100 shares

• Round lots are reserved for institutional investors, while odd lots are only for retail investors

• Odd lots refer to large transactions, while round lots are for small, individual trades

How are short-term capital gains taxed?

• At a lower tax rate than long-term capital gains, typically 0%, 15%, or 20%

• As ordinary income, subject to the individual’s regular income tax rate

• At a fixed rate of 10% for all taxpayers. D.

• Only if the gain exceeds $100,000

Which of the following is NOT a source of financial information?

• A local grocery store

• A financial news website

• A brokerage firm

• A government agency

What is the primary role of the Securities and Exchange Commission (SEC)?

• To regulate the banking industry

• To manage international trade

• To control interest rates

• To oversee the issuance and trading of securities

Which one is not the risk from short selling?

• The stock price goes down

• The stock price goes up

• The stock price stays unchanged

• Interest rate suddenly rises

Which statement is true about preferred stocks?

• Preferred stock shareholders have voting right to elect a company's board of directors

• Preferred stock shareholders are paid dividends before common shareholders

• Company founders and employees typically receive preferred stock

• Preferred stock shareholders are paid with capital gains

In what year was the first commodity exchange created?

• 1901

• 1996

• 1848

• 1697

Which of the following is an example of a soft commodity?

• Coal

• Wheat

• Oil

• Gold