Personal finance chapter 11
A bear market occurs when investors are pessimistic about the economy.
True
A stock split occurs when the shares of stock owned by existing stockholders are divided into a larger number of shares.
True
IPO's occur when a company sells stock to the general public for the first time.
True
Information on penny stocks can be hard to find.
True
Par value is an assigned value that is printed on a stock certificate.
True
Price Earning ratio is used to compare corporate earnings to the market price of a corporate stock.
True
Public stocks are avilable for anyone to buy.
True
Securities is a word that incorporates all investments.
True
Each of the following are ways to evaluate possible investments EXCEPT ____. a. the chaos theory b. the fundamental theory c. the technical theory d. the efficient market theory
a. the chaos theory
an investor can make a profit in stock in all the following ways except ____. a. Appreciation in value b. Bankruptcy c. Stock Splits d. Dividends
b. Bankruptcy
A marketplace where brokers meet to buy and sell stock is called ____. a. Krogers b. a securities exchange c. a brokerage firm d. ebay
b. a securities exchange
An example of a short-term investment strategy is ____. a. the buy-and-hold technique b. buying stock on margin c. dollar cost averaging d. a dividend reinvestment plan
b. buying stock on margin
What is the formula for calculating the total return on a stock? a. annual dividend ÷ current market value b. current return + capital gain c. dividend x number of shares x years held d. net earnings ÷ common stock outstanding
b. current return + capital gain
An example of a financial publication that provides information about specific companies is ____. a. AMEX b. Yahoo c. Barron's d. Stocks
c. Barron's
Cumulative preferred stock offers investors all the following advantages EXCEPT ____. a. dividends before common stockholders receive any b. a higher yield than common stock c. more potential growth than common stock d. less risk than common stock
c. more potential growth than common stock
Stock that has steady earnings and continues paying dividends even during economic declines is known as ____. a. cyclical stock b. growth stock c. small-cap stock d. defensive stock
d. defensive stock
A stop order requests that a stockbroker ____. a. buy a stock at the best possible price b. decide when to sell a stock c. buy or sell a stock at its current value d. sell a stock for a specific amount
d. sell a stock for a specific amount
Most over-the-counter stock is traded through ____. a. IPOs b. the NYSE c. the AMEX d. the NASDAQ
d. the NASDAQ
Small Cap stocks are generally defined as a company of 500 million or more in assets.
False
A corporation is required by law to hold monthly meetings.
False
