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Worksheets3.00
Total questions: 54
Worksheet time: 27mins
Name
Class
Date
1.
Which item should be placed in the liabilities section on a company balance sheet?
a)
cash
b)
buildings
c)
inventory
d)
employee wages
2.
Publicly traded companies are required to provide:
a)
stock research.
b)
yearly newsletters.
c)
financial statements.
d)
business report cards.
3.
If a stock price rises and falls sharply within a 52-week period, it is said to be:
a)
healthy.
b)
solid.
c)
stable.
d)
volatile.
4.
Which statement is false about Form 8-K?
a)
Companies are required to file 8K within 15 days of a significant event.
b)
Companies are required to file 8K for the first three quarters of the fiscal year.
c)
8K describes changes in company management, products, acquisitions, or legal actions.
d)
8K alerts investors to events that might affect a company's fundamental value.
5.
On a stock table, net change shows the difference between:
a)
the highest and lowest prices for the day.
b)
the highest and lowest prices for the year.
c)
the day's closing price and the previous day's price.
d)
last year's average price and this year's average price.
6.
What does an income statement show about a company over a period of time?
a)
equity
b)
liabilities
c)
profitability
d)
reliability
7.
Which is a true statement about ticker symbols?
a)
They are only given to companies on the New York Stock Exchange.
b)
They are made up of the first three letters of a company's name.
c)
They uniquely identify a company.
d)
They identify the kind of stock.
8.
Which information is a person unable to obtain from a stock table?
a)
the daily volume
b)
the yearly price range of the stock
c)
whether the stock price is up or down
d)
breaking news affecting the company that day
9.
Which document is different from a standard financial statement?
a)
balance sheet
b)
shareholder sheet
c)
income statement
d)
cash flow statement
10.
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.
11.
Which is an important business factor to consider when choosing an investment?
a)
time horizon
b)
risk tolerance
c)
Minimization of taxes
d)
Comparison to competition
12.
Which is essential for making wise investment decisions?
a)
age
b)
intelligence
c)
knowledge
d)
wealth
13.
Before investing, a buyer should:
a)
conduct thorough research.
b)
be at least 25 years old
c)
graduate from college
d)
own a car
14.
Quantitative measures such as ratios are helpful because they:
a)
can be used in context.
b)
are figured the same way regardless of the source.
c)
can be used to compare companies in different industries.
d)
show the relationship between numbers on a company's financial statements.
15.
Sam has one share of stock. He divided the net income by the number of outstanding shares of common stock. What common ratio did Sammy calculate?
a)
gross profit margin
b)
earnings per share
c)
return on equity
d)
price-earnings
16.
Glenn has committed to investing $100 each month in his favorite stock no matter the cost. This strategy is called:
a)
dollar cost averaging.
b)
growth investing.
c)
diversification.
d)
buy-and-hold.
17.
Which is least likely to be a valid reason for making a significant change in a personal asset allocation?
a)
marriage
b)
birth of a child
c)
new car purchase
d)
large shift in inflation
18.
Fundamental analysis estimates the value of a stock primarily so investors can tell whether it is:
a)
a short-term or long-term investment.
b)
competitive or noncompetitive.
c)
undervalued or overvalued.
d)
run by effective managers.
19.
When investing to reach a goal within three years, one invests toward a/an:
a)
long-term time horizon.
b)
short-term time horizon.
c)
risk-tolerant time horizon.
d)
intermediate-term time horizon.
20.
A company is very popular with investors, who keep buying shares even though the stock price is increasing. In this case, which company value is increasing?
a)
accounting
b)
intrinsic
c)
market
d)
underlying
21.
Which factor should have the least influence on a person's investment choices?
a)
age
b)
marital status
c)
current income
d)
financial
22.
Which is a poor way to find companies in which to invest?
a)
Read reputable investment magazines and newspapers.
b)
Discuss investment opportunities with family and friends.
c)
Follow suggestions in unsolicited e-mails and phone calls.
d)
Investigate businesses that have interesting products and services.
23.
Which is an appropriate investment objective for a mutual fund with a buy-and-hold approach?
a)
covering a broad range of industries
b)
seeking long-term capital appreciation
c)
investing primarily in a diversified portfolio
d)
investing in stocks with superior growth potential
24.
Too much diversification in a financial portfolio can:
a)
dilute the value of big gains on an individual stock.
b)
cause other investors to avoid a particular stock.
c)
keep stock fund managers from doing their jobs.
d)
prevent a stock from growing in value.
25.
Which statement is true about assessing the fundamentals of a security?
a)
Fundamental analysis results in a reliable prediction of the stock price for the next year.
b)
Fundamental analysis is a complicated procedure that is inappropriate for beginning investors.
c)
Even investment experts disagree about the most important ratios to consider in fundamental analysis.
d)
The only valid approach to fundamental analysis is based on the work of investment guru Warren Buffett.
26.
The most important factor to consider when choosing an investment is:
a)
the stockholder's ability to influence company decisions.
b)
whether the investment supports financial goals.
c)
whether the security pays an annual dividend.
d)
the short-term profitability of the investment.
27.
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:
a)
debt ratios.
b)
liquidity ratios.
c)
profitability ratios.
d)
asset management ratios.
28.
For assessing the value of a stock, which represents an invalid qualitative factor to consider?
a)
staying on top of trends
b)
offering more healthful food
c)
employing experienced managers
d)
paying the CEO a reasonable amount
29.
The price-earnings (PE) ratio measures:
a)
stock price compared to sales.
b)
stock price compared to shareholders' equity.
c)
management's ability to streamline operations.
d)
investors' expectations about a company's performance.
30.
The PEG ratio is unique because it incorporates price, earnings, and:
a)
gross profit.
b)
gross sales.
c)
growth of EPS.
d)
growth rate of earnings.
31.
When assessing a stock by using fundamental analysis, an investor should consider:
a)
qualitative and quantitative factors.
b)
a chart of the price over the last year.
c)
only ratios and other quantitative factors.
d)
recent trends that might affect the short-term price.
32.
Ratios are calculated by:
a)
multiplying or dividing, depending on the ratio.
b)
adding or subtracting, depending on the ratio.
c)
multiplying one number by another.
d)
dividing one number by another.
33.
When Staci is told to “consider the cost” before selling an investment, she is being advised to:
a)
estimate the effect of commissions and tax costs on her transaction.
b)
review every one of the costs she has incurred thus far.
c)
calculate the costs of prior transactions.
d)
negotiate for a better, cost-saving deal.
34.
Return on equity (ROE) measures management's ability to make a profit:
a)
estimate the effect of commissions and tax costs on her transaction.
b)
review every one of the costs she has incurred thus far.
c)
calculate the costs of prior transactions.
d)
negotiate for a better, cost-saving deal.
35.
Since John wants to know the bond’s interest rate, he needs to look at the bond’s:
a)
issuer.
b)
coupon.
c)
maturity.
d)
par value.
36.
Which best describes a marketable bond?
a)
one that is bought and sold in the open market
b)
one that later becomes a stock at a market
c)
one that comes from a governing body
d)
one that is paid back before maturity
37.
Which type of stock comes with voting rights?
a)
income
b)
common
c)
preferred
d)
small cap
38.
A place where investors can trade securities that have been issued by a corporation is known as a/an:
a)
primary market.
b)
secondary market.
c)
stock market index.
d)
initial public offering.
39.
A bond's profit or loss over a period of time at a particular amount is called the:
a)
yield.
b)
liquidity.
c)
maturity.
d)
bid price.
40.
Which is the best place he could go for detailed information about a mutual fund?
a)
newspaper
b)
trade magazine
c)
mutual fund website
d)
mutual fund prospectus
41.
Which is a disadvantage of investing in bonds?
a)
low returns
b)
meeting long-term goals
c)
offering unmatched reliability
d)
performing well when the economy is poor
42.
Robyn bought $100 worth of stock in a company, and the stock is now worth $150. This is an illustration of:
a)
capital appreciation.
b)
a stock exchange.
c)
a stock split.
d)
dividends.
43.
A company that Marcus invested in has earned a profit, and now he is receiving a cash payment. This is an illustration of:
a)
dividends.
b)
a stock split.
c)
a stock exchange.
d)
capital appreciation.
44.
Investing in a few different mutual funds rather than putting all money into 1 or 2 individual stocks. What advantage of mutual funds does this situation illustrate?
a)
liquidity
b)
convenience
c)
diversification
d)
professional money management
45.
When investing in bonds, to know how likely it is that the corporations will pay back what they borrowed. You need to look at the:
a)
issuer.
b)
bid price.
c)
bond rating.
d)
coupon rate.
46.
Jamie owned 300 shares in a 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:
a)
capital appreciation.
b)
a stock exchange.
c)
a stock split.
d)
dividends.
47.
Mutual funds that contain both stocks and bonds are known as:
a)
exchange-traded funds.
b)
money market funds.
c)
balanced funds.
d)
index funds.
48.
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:
a)
stock fund.
b)
growth fund.
c)
open-end fund.
d)
closed-end fund.
49.
Which type of bond does a company issue to raise financing for ongoing operations or expanding the business?
a)
savings bond
b)
treasury bond
c)
corporate bond
d)
municipal bond
50.
Which is considered a reliable bond?
a)
callable
b)
corporate
c)
government
d)
puttable
51.
Which individual does in-depth work on formulating investment strategies for clients, helping them fulfill their needs, and reaching their financial goals?
a)
financial planner
b)
investment banker
c)
financial consultant
d)
mutual fund manager
52.
Which person will analyze, interpret, and process a wide variety of transactions, and be aware of their impact to assets on behalf of a beneficiary?
a)
financial planner
b)
investment banker
c)
trust operations specialist
d)
securities operations specialist
53.
An individual who often works as part of a financial institution and is primarily concerned with raising capital for corporations, governments, or other entities is called a/an:
a)
market consultant.
b)
investment banker.
c)
mutual fund manager.
d)
securities sales agent (broker).
54.
The specialist who is a member of a stock exchange and acts as the market maker to facilitate the trading of a given stock is called a:
a)
financial analyst.
b)
financial planner.
c)
trust operations specialist.
d)
securities operations specialist.
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