WorksheetsFinancial Planning 3.00 Test
Total questions: 48
Worksheet time: 24mins
Which item should be placed in the liabilities section on a company balance sheet?
Cash
buildings
Inventory
Emplyee WAges
Publicly traded companies are required to provide:
stock research
yearly newsletters
financial statements
business report cards
If a stock price rises and falls sharply within a 52-week period, it is said to be:
healthy
solid
stable
volatile
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.
What does an income statement show about a company over a period of time?
equity
liabilities
profitability
reliability
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 Form 8-K?
Companies are required to file it within 15 days of a significant event
Companies are required to file it for the first three quarters of the fiscal year.
The form describes changes in company management, products, acquisitions, or legal actions.
The form is important because it alerts investors to events that might affect a company's fundamental value.
Which information is a person unable
to obtain from a stock table?
the daily volume
the yearly price range of the stock
whether the stock price is up or down
breaking news affecting the company that day
Which document is different from a standard
financial statement?
balance sheet
shareholder sheet
income statement
cash flow statement
1. The numbers listed in a stock table’s 52-week high and low column tell you
if the stock price is overvalued.
the range of prices for the year.
the best prices for the stock.
the range of where the stock price should be
Which of the following is a true statement about ticker symbols:
They tell you what kind of stock it is.
They are made up of the first three letters of a company’s name
They uniquely identify a company
They are only given to companies on the New York Stock Exchange.
The stock table term PE stands for
price-earnings.
profit-earnings.
percentage-earnings.
price-expenses
The stock table column that tells you how many shares were traded that day is labeled
NET CHG.
YLD %
DIV.
VOL.
On a stock table, net change shows you the difference between
last year’s average price and this year’s average price
the day’s closing price and the previous day’s price.
the highest and lowest prices for the day.
the highest and lowest prices for the year.
If a stock price rises and falls sharply within a 52-week period, it is said to be
stable.
volatile.
healthy
solid.
What might a dividend payout tell you about a company
It’s trying to rid itself of cash.
It’s reinvesting its profits back into the business.
It’s paying back a loan.
It’s a well-established company.
What might a company’s higher-than-usual sales volume for a day indicate?
Investors have reacted to news about the company.
Investors have received their dividends.
Investors believe the yield percentage has changed.
Investors have recalculated the PE.
Which of the following can you not learn about a company by reading a stock table:
What breaking news affected the company that day
If the stock price is up or down
What the stock’s yearly price range is
What the day’s volume was
1. It’s a good idea for an investor to watch the numbers on a stock table
just for a given day.
once a year.
over a period of time.
when dividends are paid
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 emails & phone calls.
Investigate businesses that have interesting products & services.
Which is an appropriate investment objective for a mutual fund with a buy-and-hold approach?
covering a broad range of industries
seeking long term capital appreciation
investing primarily in a diversified portfolio
investing in stocks with superior growth potential
Which statement is true about assessing the fundamentals of a security?
Fundamental analysis results in a reliable prediction of the stock price for the next year.
Fundamental analysis is a complicated procedure that is inappropriate for beginning investors.
Even investment experts disagree about the most important ratios to consider in fundamental analysis.
The only valid approach to fundamental analysis is based on the work of investment guru Warren Buffett.
Too much diversification in a financial portfolio can:
dilute the value of big gains on an individual stock.
cause other investors to avoid a particular stock
keep stock fund managers from doing their jobs
prevent a stock from growing in value
The most important factor to consider when choosing an investment is:
the stockholder's ability to influence company decisions
whether the investment supports financial goals
whether the security pays an annual dividend
the short term profitability
The PEG ratio is unique because it incorporates price, earnings, and:
gross profit
gross sales
growth of EPS
the growth rate of earnings
The price-earnings (PE) ratio measures:
stock price compared to sales
stock price compared to shareholders' equity
management's ability to streamline operations
investor's 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:
debt ratios
liquidity ratios
profitability ratios
asset management ratios
For assessing the value of a stock, which represents an invalid qualitative factor to consider?
staying on top of trends
offering more healthful food
employing experienced
paying the CEO a reasonable amount
Ratios are calculated by:
multiplying or dividing, depending on the ratio
adding or subtracting, depending on the ratio
multiplying one number by another
dividing one number by another
Return on equity (ROE) measures management's ability to make a profit:
from the money generated by sales
by becoming more efficient in operations
by becoming shareholders of smaller firms
from the money that shareholders have invested
When Staci is told to "consider the cost' before selling an investment, she is being advised to:
estimate the effect of commissions and tax costs on her transaction
review every one of the costs she has incurred thus far
calculate the costs of prior transactions
negotiate for a better, cost-saving deal
When assessing a stock by using fundamental analysis, an investor should consider:
qualitative and quantitative factors
a chart of the price over the last year
only ratios & other quantitative factors
recent trends that might affect the short-term price
Which best describes a marketable bond?
one that is bought and sold in the open market
one that later becomes a stock at a market
one that comes from a governing body
one that is paid back before maturity
A place where investors can trade securities that have been issued by a corporation is known as/a:
Primary market
second market
stock market index
initial public offering
Since John wants to know the bond's interest rate, he needs to look at the bond's:
issuer
coupon
maturity
par value
Which type of stock comes with voting rights?
income
common
preferred
small cap
Which is a disadvantage of investing in bonds?
low returns
meeting long term goals
offering unmatched reliability
performing well when the economy is poor
A company that Marcus invested in has earned a profit, and now he is receiving a cash payment. This is an illustration of:
dividends
stock split
stock exchange
capital appreciation
A bond's profit or loss over a period of time at a particular amount is called the:
yield
liquidity
maturity
bid price
Kent wants to learn as much as possible about the mutual fund that he is considering as an investment. Which is the best place he could go for detailed information?
newspaper
trade magazine
mutual fund website
mutual fund prospectus
Robyn bought $100 worth of stock in a company, and the stock is now worth $150. This is an illustration of:
capital appreciation
stock exchange
stock split
dividends
Darron is investigating a few corporate bonds for investment. He wants to know how likely it is that the corporations will pay back what they have borrowed. Darron needs to look at the:
issuer
bid price
bond rating
coupon rate
Teri decided to invest in a few different mutual funds rather than put all her investment dollars into one or two individual stocks. A stock in one of her mutual funds became worthless, but since her investment was spread out, Teri was only slightly affected. What advantage of mutual funds does Teri's situation illustrate?
liquidity
convenience
diversification
professional money management
Jamie owned 300 shares in a certain company, worth $10 per share. The company recently announced that his 300 shares would become 600 shares, worth $5 per share. This is an illustration of:
capital appreciation
stock exchange
stock split
dividends
Mutual funds that contain both stocks and bonds are known as:
exchange-traded funds
money market funds
balanced funds
index funds
Which is considered a reliable bond?
callable
corporate
government
puttable
Which type of bond does a company issue to raise financing for ongoing operations or expanding the business?
savings bonds
treasury bond
corporate bond
municipal bond
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
