FP1 Final Exam Rev. Part 3

Which statement is false about using a buy-and-hold strategy?

• A. Assets need only passive management.

• B. There are tax benefits for this method.

• C. Stocks must be carefully monitored.

• D. Price fluctuations can be ignored.

Which is a true statement about ticker symbols?

• They are only given to companies on the New York Stock Exchange.

• They are made up of the first three letters of a company's name.

• They uniquely identify a company.

• They identify the kind of stock.

The price-earnings (PE) ratio measures:

• The market value per share divided by the earnings per share.

• The total revenue divided by the total expenses.

• The net income divided by the total assets.

• The dividend yield of a company.

What does the stock price compared to sales indicate?

• stock price compared to sales.

• stock price compared to shareholders' equity.

• management's ability to streamline operations.

• investors' expectations about a company's performance.

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:

Which of the following is not a type of financial ratio?

• efficiency ratios

• liquidity ratios

• profitability ratios

• asset management ratios

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

• Read reputable investment magazines and newspapers.

• Discuss investment opportunities with family and friends.

Which of the following is a poor way to protect yourself from investment fraud?

• Check the background of the person selling the investment.

• Be wary of investments that offer high returns with little risk.

• Follow suggestions in unsolicited e-mails and phone calls.

• Investigate businesses that have interesting products and services.

Publicly traded companies are required to provide: A. stock research. B. yearly newsletters. C. financial statements.

• A. stock research.

• B. yearly newsletters.

• C. financial statements.

A mutual fund that has no limit on the number of shares it can issue or the amount of money it can hold is called a/an:

• stock fund.

• growth fund.

• open-end fund.

• closed-end fund.