Question 1

Corporate earnings are reported in the firm's annual report.

Accepted Answer

A) True 
 B)False

Question 2

An investor may receive a margin call when selling stock short.

Accepted Answer

A) True 
 B)False

Question 3

Stephen wanted to become one of the owners of GHI Corp.when it finally was available to the general public.He participated in the

Accepted Answer

A)   Initial public offering.
B)   Investment bank.
C)   Primary market.
D)   Secondary market.
E)   Securities exchange.F) B) and D)
G) A) and B)

Question 4

Which of the following is a profitability ratio that uses the number of outstanding shares in the calculation?

Accepted Answer

A)   Capital gain
B)   Earnings per share
C)   Price per share
D)   Net income
E)   Dividend yieldF) A) and B)
G) C) and D)

Question 5

The NYSE is an example of a(n)

Accepted Answer

A)   Initial public offering.
B)   Investment bank.
C)   Primary market.
D)   Secondary market.
E)   Securities exchange.F) A) and C)
G) A) and B)

Question 6

Typically the commission paid for a stock sale will be lower with a full-service broker than for an online brokerage firm.

Accepted Answer

A) True 
 B)False

Question 7

Given the information shown here for NMOP Inc.,calculate the dividend yield.
• Annual dividend = $4.00
• Number of shares outstanding = 40,000
• Current market value per share = $40.00
• Book value per share = $8.00

Accepted Answer

A)   10%
B)   15%
C)   20%
D)   25%
E)   40%F) A) and B)
G) A) and C)

Question 8

The opportunity,but not the obligation,to buy a security within a specified period of time at a guaranteed price is

Accepted Answer

A)   A call option.
B)   Direct investing.
C)   Buying on margin.
D)   A put option.
E)   A short sale.F) None of the above
G) A) and D)

Question 9

What are three calculations that can be used to evaluate the profitability of a corporation?

Accepted Answer

Possible answers include these:
• Earnin...

Question 10

Patrick sold his GE shares using his online broker.One can say that he sold them on the

Accepted Answer

A)   Initial public offering.
B)   Investment bank.
C)   Primary market.
D)   Secondary market.
E)   Securities exchange.F) A) and C)
G) A) and B)

Question 11

Rebecca owns stock that pays a dividend.She does not want the cash now; instead she would prefer to have more shares of stock.She should use a

Accepted Answer

A)   Buy-and-hold technique.
B)   Direct investment plan.
C)   Dividend reinvestment plan.
D)   Dollar cost averaging technique.
E)   Margin technique.F) A) and D)
G) A) and E)

Question 12

A stock that typically sells for less than $1 per share is called a(n) _______ stock.

Accepted Answer

A)   blue chip
B)   income
C)   micro cap
D)   midcap
E)   pennyF) B) and E)
G) A) and B)

Question 13

Earnings per share equals the corporation's after-tax earnings divided by the number of outstanding shares of a firm's common stock.

Accepted Answer

A) True 
 B)False

Question 14

Tammy feels quite comfortable trading her own stocks using a computer.She should use a(n)

Accepted Answer

A)   Discount broker.
B)   Full-service broker.
C)   Market maker.
D)   Online broker.
E)   All of these are correct.F) A) and E)
G) All of the above

Question 15

Faye sometimes borrows money from her broker to buy her stock.She is buying

Accepted Answer

A)   A call option.
B)   A direct investment.
C)   On margin.
D)   A put option.
E)   A short sale.F) None of the above
G) A) and B)

Exam 12: Investing in Stocks

Corporate earnings are reported in the firm's annual report.

Correct Answer
verified

An investor may receive a margin call when selling stock short.

Correct Answer
verified

Faye sometimes borrows money from her broker to buy her stock.She is buying

Correct Answer
verified

Which of the following is a profitability ratio that uses the number of outstanding shares in the calculation?

Correct Answer
verified

Given the information shown here for NMOP Inc.,calculate the dividend yield. • Annual dividend = $4.00 • Number of shares outstanding = 40,000 • Current market value per share = $40.00 • Book value per share = $8.00

Correct Answer
verified

Tammy feels quite comfortable trading her own stocks using a computer.She should use a(n)

Correct Answer
verified

What are three calculations that can be used to evaluate the profitability of a corporation?

Correct Answer
verified
Possible answers include these:
• Earnin...
View Answer

Earnings per share equals the corporation's after-tax earnings divided by the number of outstanding shares of a firm's common stock.

Correct Answer
verified

Typically the commission paid for a stock sale will be lower with a full-service broker than for an online brokerage firm.

Correct Answer
verified

Patrick sold his GE shares using his online broker.One can say that he sold them on the

Correct Answer
verified

The NYSE is an example of a(n)

Correct Answer
verified

A stock that typically sells for less than $1 per share is called a(n) _______ stock.

Correct Answer
verified

Rebecca owns stock that pays a dividend.She does not want the cash now; instead she would prefer to have more shares of stock.She should use a

Correct Answer
verified

The opportunity,but not the obligation,to buy a security within a specified period of time at a guaranteed price is

Correct Answer
verified

Stephen wanted to become one of the owners of GHI Corp.when it finally was available to the general public.He participated in the

Correct Answer
verified

Exam 12: Investing in Stocks

Corporate earnings are reported in the firm's annual report.

Correct AnswerverifiedShow Answer

An investor may receive a margin call when selling stock short.

Correct AnswerverifiedShow Answer

Faye sometimes borrows money from her broker to buy her stock.She is buying

Correct AnswerverifiedShow Answer

Which of the following is a profitability ratio that uses the number of outstanding shares in the calculation?

Correct AnswerverifiedShow Answer

Given the information shown here for NMOP Inc.,calculate the dividend yield. • Annual dividend = $4.00 • Number of shares outstanding = 40,000 • Current market value per share = $40.00 • Book value per share = $8.00

Correct AnswerverifiedShow Answer

Tammy feels quite comfortable trading her own stocks using a computer.She should use a(n)

Correct AnswerverifiedShow Answer

What are three calculations that can be used to evaluate the profitability of a corporation?

Correct AnswerverifiedPossible answers include these:• Earnin...View AnswerShow Answer

Earnings per share equals the corporation's after-tax earnings divided by the number of outstanding shares of a firm's common stock.

Correct AnswerverifiedShow Answer

Typically the commission paid for a stock sale will be lower with a full-service broker than for an online brokerage firm.

Correct AnswerverifiedShow Answer

Patrick sold his GE shares using his online broker.One can say that he sold them on the

Correct AnswerverifiedShow Answer

The NYSE is an example of a(n)

Correct AnswerverifiedShow Answer

A stock that typically sells for less than $1 per share is called a(n) _______ stock.

Correct AnswerverifiedShow Answer

Rebecca owns stock that pays a dividend.She does not want the cash now; instead she would prefer to have more shares of stock.She should use a

Correct AnswerverifiedShow Answer

The opportunity,but not the obligation,to buy a security within a specified period of time at a guaranteed price is

Correct AnswerverifiedShow Answer

Stephen wanted to become one of the owners of GHI Corp.when it finally was available to the general public.He participated in the

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified
Possible answers include these:
• Earnin...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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