Stocks
What does a high Price/Earnings ratio indicate?
Expensive
Maria gave XYZ company $1,500. She is guaranteed 4% interest per year on her investment for the next 5 years. At the end of her 5 years she will receive $1,824.98 back. What type of investment tool did she purchase?
Bond
A company earned $120 million during the year. There are 25 million outstanding shares. What is the company's earnings per share?
$4.80
What low risk investment option requires that your money be held for a specified period of time?
CD
What is the best description of the relationship between risk and return?
The higher the potential return, the greater the risk
What term describes the stock market when prices have been steadily rising and people are optimistic?
bull
Which of the following is NOT a characteristic of U. S. savings bonds?
limited withdrawls
earns interest for 30 years
minimum hold of one year
Cannot be transferred once purchased
Kelly purchases 5 shares of Nike stock for $72.00 a share in April 2011. In April 2012, she decides to sell the stock. The stock price at that time is $90.00 per share. What is her capital gain?
$90
Emily wants to receive regular payments of $300 a month for six years. What low risk investment option should she choose?
annunity
Which typically earns the lowest rate of return?
savings accounts
What is NOT an evaluation tool used when deciding to buy stock in a company
supply and demand
Jennifer is an extremely conservative investor. She wants to select an investment that would be very low risk. What is her BEST option from the following choices?
Government Bond
You bought 150 shares of stock at $15.00 per share. At the end of the year, you received a dividend of $50.00 and your stock was valued at $2,500.00. What was your rate of return?
11%
What is a major difference between stocks and bonds?
Stocks do not ensure a fixed rate of return, bonds do
Jenny is a shareholder of ABC, Inc. which means that she owns a limited portion of the company. What are the portions of the company that she owns?
shares
ABC, Inc. is one of the world's leading companies in producing chemicals. They plan to issue at least 1.1 million shares to at least 400 shareholders. In addition, ABC, Inc. has earned $12 million dollars in the last three years and had revenue of $80 million dollars last year. ABC, Inc. would be traded on which stock exchange?
NYSE
An individual does NOT want to pay federal income tax on investment earnings. Therefore, it is advisable for the person to buy
Municipal Bonds.
If you want to double $1,000.00 using an investment that earns 8% interest compounded annually, how long will it take you?
9 years
If you are looking for an investment that combines stocks and bonds what would you likely choose to invest in?
mutual funds
What investment strategy can a person use to lower risk?
Diversification
the role of the Securities and Exchange Commission (SEC) is to
protect investors
A person wants to invest in a mutual fund that distributes substantial dividends as income for investors. He is not concerned about growth and value. What type of mutal fund BEST meets his requirement?
Bond Fund
A person buys a Ford Motor Company for 1,000 on a 20 year bond paying 9% interest for his daughter. If he waits the full 20 years to redeem the bond for his daughter. What would the value be?
1000
A major difference between the S&P 500 Index and the Down Jones Industrial Average is that the
S&P 500 includes more stocks
If a shareholder cannot attend the annual stockholder meeting, she can assign her common stock voting rights to someone else by signing and returing a
proxy statement