Financial Planning 1 Unit 3 EXAM REVIEW

Publicly traded companies are required to provide:

• stock research.

• yearly newsletters.

• financial statements.

• business report cards.

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:

• debt 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.

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

• Investigate businesses that have interesting products and services.

The price-earnings (PE) ratio measures:

• stock price compared to sales.

• stock price compared to shareholders' equity.

• management's ability to streamline operations.

• investors' expectations about a company's performance.

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.

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.

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.

A company that Marcus invested in has earned a profit, and now he is receiving a cash payment. This is an illustration of:

• dividends.

• a stock split.

• a stock exchange.

• capital appreciation.

• capital appreciation.

• a stock exchange.

• a stock split.

• dividends.

On a stock table, net change shows the difference between:

• the highest and lowest prices for the day.

• the highest and lowest prices for the year.

• the day's closing price and the previous day's price.

• last year's average price and this year's average price.