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WorksheetsSMG
Total questions: 30
Worksheet time: 17mins
Common stock ownership gives investors
voting rights in shareholders meetings
guaranteed dividends
low risk with a high rate of return.
The statement “risk and reward are related” implies:
making money in the stock market is risky
the lower the risk the lower the reward
there is no reward in taking a risk
Dividends can be paid out to investors in the form of a. b. c.
stock
cash
stock or cash
If you own 100 shares of PEP stock, valued at $15.45 per share, and this stock has split 2 for 1, then this means that
you now own 100 shares of PEP stock worth $772.50
you now own 200 shares of PEP stock worth $1,545.00
you now own 200 shares of PEP stock worth $$3,090.00
Some investors place a greater priority on high earnings than on safety . They prefer ________ stocks.
no beta
low beta
high beta
Usually when interest rates rise, bond prices:
rise
fall
stay the same
Short selling is a way to make money when:
you don’t have enough money to buy a round lot
the market is going down
you use the Internet and not a broker
An important difference between common stock and preferred stock is that the price of the common stock tends to be more _________ than that of preferred stock.
volatile
stable
expensive
A company gets money from shareholders when:
its stock is issued
it makes a profit
shares are traded between buyers and sellers
Stock prices fall because:
there are more sellers than buyers
companies don’t make profits everyday
dividends are paid
Mary’s mother owns Target stock. She currently receives a dividend payment every quarter. She is guaranteed to receive a dividend every quarter as long as she owns Target stock.
True
False
A bond is:
contract for credit
money borrowed from a bank
a type of IOU
Interest earned on interest occurs with:
buying on margin
diversification
compounding
If a dividend has been announced but not yet paid, the stock is said to have gone:
a. dividend deferred
b. pre-dividend
c. ex-dividend
Which of the following is not a listing requirement for the NYSE?
a. earnings
b. number of shares
c. payment of dividends
IPO means:
a. investor protection option
b. income producing opportunity
c. initial public offering
Stocks, bonds and mutual funds are all part of:
a. an initial public offering
b. an industry sector
c. a diversified portfolio
The S&P 500 Index is made up of ________. c. 500 stocks that are made up of small, mid-cap and large-cap companies.
a. the 500 best performing stocks on the NASDAQ.
b. 500 large-cap stocks from a wide variety of sectors.
c. 500 stocks that are made up of small, mid-cap and large-cap companies.
A stock is to a mutual fund as:
a. a can of soda is to a six-pack
b. a pencil is to paper
c. a tree is to a forest
If you know that the ticker symbol for Ford is F, on which exchange is it listed?
a. NYSE
b. AMEX
c. NASDAQ
The Nasdaq 100, the Dow Jones Industrial Average and the Russell 2000 are examples of:
a. a stock report
b. stock exchanges
c. stock indices
Diversification creates:
a. more risk in a portfolio
b. less diversity in a portfolio
c. less risk in a portfolio
Investors with a low risk tolerance tend to seek stocks that are
a. cyclical
b. blue-chip
c. small-cap
Ford, Toyota, and GM show PE ratios of 18, 36, and 5, respectively. Based solely on this information, which company’s stock would be the less risky buy?
a. GM
b. Ford
c. Toyota
An industry is composed of:
a. 10 to 15 stocks
b. corporations with similar products and services
c. industrial businesses working together
The Dow Jones Industrial Average represents:
a. 30 blue chip stocks
b. 30 of the most popular companies on the NYSE
c. 300 Industrial companies
20. To be diversified, a portfolio must hold bonds as well as stocks and mutual funds.
a. True
b. False
A new restaurant, Pasta Premier has opened in Vicki’s neighborhood. Vicki can’t find the ticker symbol for Pasta Premier stock. Which of the following statements is not true.
a. Pasta Premier could be a subsidiary
b. Pasta Premier could be a parent company
c. Past Premier could be a privately traded company
. Large cap, mid caps and small caps are descriptions of:
a. company size and market value
b. mutual funds
c. index funds
Mutual funds are regulated by:
a. Securities and Exchange Commission
b. mutual fund managers
c. National Association of Securities Dealers
