3.01 Sources of Securities Info.
Publicly traded companies are required to provide:
A. stock research.
B. yearly newsletters.
C. financial statements.
D. business report cards.
C. financial statements.
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.
C. Stocks must be carefully monitored.
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.
C. Follow suggestions in unsolicited e-mails and phone calls.
Which is the least important variable of a bond fund?
A. rate at which the money in the fund increases
B. amount of time spent researching the fund
C. credibility ratings of the fund
D. average maturity of the fund
B. amount of time spent researching the fund
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
C. trust operations specialist
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.
C. They uniquely identify a company.
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.
C. undervalued or overvalued.
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.
D. investors' expectations about a company's performance.
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.
A. capital appreciation.
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).
B. investment banker.
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.
C. the day's closing price and the previous day's price.
The Cutting Edge 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
C. market
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.
B. liquidity ratios.
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.
A. dividends.
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
C. financial consultant
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.
D. volatile.
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.
D. show the relationship between numbers on a company's financial statements.
Return on equity (ROE) measures management's ability to make a profit:
A. from the money generated by sales.
B. by becoming more efficient in operations.
C. by becoming shareholders of smaller firms.
D. from the money that shareholders have invested.
D. from the money that shareholders have invested.
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.
C. open-end fund.
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.
D. securities operations specialist.
Which statement is false about Form 8-K?
A. Companies are required to file it within 15 days of a significant event.
B. Companies are required to file it for the first three quarters of the fiscal year.
C. The form describes changes in company management, products, acquisitions, or legal actions.
D. The form is important because it alerts investors to events that might affect a company's fundamental value.
B. Companies are required to file it for the first three quarters of the fiscal year.
Which is essential for making wise investment decisions?
A. age
B. intelligence
C. knowledge
D. wealth
C. knowledge
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.
A. dilute the value of big gains on an individual stock.
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?
A. liquidity
B. convenience
C. diversification
D. professional money management
C. diversification
Before investing, a buyer should:
A. conduct thorough research.
B. be at least 25 years old.
C. graduate from college.
D. own a car.
A. conduct thorough research.