Semester 1 Finance Exam
An employer-sponsored, tax-deferred retirement plan is known as a(n)
401(k)
Which of the following is NOT an example of an external stock information source?
A company's annual report
In which financial statement would you expect to find information about assets and liabilities?
Balance Sheet
Who signs the Report of Management on the Financial Statements?
CEO and CFO
Which of the following is a plan in which investors can accumulate more and more shares of a company's stock, without having to pay the standard brokerage fees for purchasing them?
DRIP
What type of order restriction lets a broker know the order will expire at the end of the trading day?
Day Order
The section of the SEC website that houses companies' filings is called...
EDGAR
Which of the following is a true statement about stock information resources?
It has never been easier to find stock info
What does the "Management Discussion and Analysis" section of the annual report do?
Reviews the company's results of operations
Kent wants to learn as much as possible about the mutual fund he's thinking of investing in. Which of the following is the best place he could go for detailed information?
The mutual fund's prospectus
Why do many people pursue finance careers?
There is a positive outlook for finance careers
what is a common criticism of many annual reports' Letters to the Shareholders?
They're vague and full of jargon
The stock table column that tells you how many shares were traded that day is labeled
VOL- volume
Jill bought stock directly from Coca-Cola for a very low fee. She is participating in...
a direct stock purchase plan
Which of the following is NOT found in a company's annual report?
a listing about things that went wrong
What causes a stock's price to change?
adding/removing fortune 500, well known analyst recommendations, current events in company, sales of products/services
A stock exchange, specialist have responsibility for...
all trades made on a particular stock
On the cash flow statement, incoming cash is "counted" when it...
arrives
The two major sections on a balance sheet are...
assets and liabilities
Mutual funds that contain both stocks and bonds are known as...
balanced funds
When Janine wants to know what others are willing to pay for a bond she owns, she looks at the...
bid price
Who makes the decisions about a company's dividend policies?
board of directors
What is a typical job duty for someone working in accounting?
book keeping
On the balance sheet, the property and equipment category includes...
buildings
What does the current ratio measure?
business' ability to pay current debt
Jack tells his broker he wants to purchase 50 shares of ABC stock. Jack is placing a ___________ order.
buy
How does a bull market affect a stock's price?
by encouraging product purchases
In what way can the general state of the economy affect a stock's price?
by increasing supply and demand
Robyn bought $100 worth of stock in a company, and now it's worth $150. This is an illustration of...
capital appreciation
Which of the following is a company- specific influence on a stock's price?
change in management
Which of the following are the largest institutions to deliver banking services?
commercial banks
Which type of stock comes with voting rights?
common
Which of the following is NOT true about from 8-K?
companies are required to file it for the first three quarters of the fiscal year
Which of the following is an important business factor to consider when choosing an investment?
company's comparison to competition
Before you invest, you should...
conduct thorough research
If you are nearing retirement, which investment approach will you use?
conservative
Since John wants to know the bond's interest rate, he needs to look at the bond's?
coupon
Too much diversification in a financial portfolio can...
dilute the value of big gains on an individual stock
One significant purpose of the notes to the financial statements is to...
disclose information
A company that Marcus invested in has earned a profit, now Marcus is receiving a cash payment This is an illustration of...
dividends
When Paula examines the income statement, she sees the company's...
equity
Regarding stock investments, which of the following primarily drives investors' actions?
expectations
Which of the following is the best place to buy shares in a mutual fund?
fidelity investments
What type of order restriction lets a broker know the order will be canceled if not filled immediately?
fill or kill
When Jack examines the balance sheet, he sees a "picture" of the company's...
financial situation
Publicly-traded companies are required by law to provide...
financial statements
What does the fixed assets ratio measure?
generates sales/revenue from fixed assets investments
Which of the following is an essential qualification for a career in finance?
good communication skills
What does receivables turnover measure?
how efficiently a firm uses its assets
What does the total assets ratio measure?
how many sales generated per assets
What does times interest earned measure?
how well business can pay debt
Without the notes, the financial statements are considered...
inaccurate
What happens when institutional investors purchase a number of stocks from the same company?
individuals purchase stocks from the company
What best describes the relationship between bonds and the stock market?
inverse
What might a dividend payout tell you about a company?
it's a well established company
To make the balance sheet "balance" assets must equal
liabilities plus equity
Maggie wants to buy stock in Pepsico, but only when the price drops to a certain amount. She is interested in placing a ________ order.
limit
Melinda wants to invest in a bond, but her main concern is how soon she'll be able to access the money she's invested. Melinda needs to look at the...
liquidity
Commission fees associated with mutual funds are known as
loads
A general rule about investment risk says that the greater the risk you are willing to take, the greater your potential gains and your potential...
losses
An order to buy or sell a stock immediately at the best available price is called a ___________ order.
market
A stock exchange functions in a way that is most similar to a...
marketplace
Which of the following is an ideal investment if you have a need for liquidity?
money market account
In investing, buy and sell orders that are placed online...
must go through a broker
The price of a mutual fund's shares is determined by...
net asset value
On the income statement, which of the following represents the overall excess or shortage for the year?
net income
A Roth IRA differs from a regular IRA in that it is...
non-tax deferred
When should an investor sell his/her investments?
not very often- because of transaction fees that have to be paid
What best describes a marketable bond?
one bought/sold in the open market
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(n)...
open end fund
How often should an investor watch the numbers on a stock table?
over a period of time
A stock with a price of $1 or less is known as a __________ stock.
penny
What does the debt ratio measure?
percent finances owned by debt
The stock table term PE stands for...
price-earnings
What does an income statement show about a company over a period of time?
profitability
When selecting an investment, a chart is more helpful in comparing...
quantitative factors- numbers
What does inventory turnover measure?
quickly business sells inventory, number of times company turns over during a year
How should you begin researching an investment you might select?
read the company's annual report
Which of the following is NOT an expense represented on the income statement...
revenues
What is a cyclical stock?
seasonal stocks (ex. concrete company in mi)
A place where investors can trade securities that have been issued by a corporation is known as a...
secondary market
When investors trade securities that have already been issued by a corporation, they are trading on?
secondary market
which of the following is not a standard financial statement?
shareholder sheet
If you are investing for a goal that you hope to reach within three years, you are investing for a...
short-term time horizon
To get a general idea of the direction of the stock market today, check a...
stock market index
What is a challenge of working in securities and investments?
stressful
Form 10-K is most like...
the annual report
What is the difference between a stock's ask price and buy price?
the ask price is the sell price, the buy price is the bid price
On a stock table, net change shows you the difference between
the day's closing price and previous day's price
The numbers listed in a stock table's 52-week high and low column to tells you..
the range between the stocks lowest and highest price over a year
A fund that invests in stocks that tend to be undervalued or overlooked is called a...
value fund
What does the quick ratio measure?
value of current assets (excluding liability) available to cover current liabilities
If a stock price rises and falls sharply within a 52-week period, it is said to be
volatile
Stocks whose prices rise higher than, or fall lower than, the market as a whole are referred to as...
volatile
How much a stock sells for depends directly on what?
what buyers are willing to pay for the stock
Which of the following can you not learn about a company by reading the stock table?
what news affects a stock price on a given day
From the cash flow statement, an investor can determine...
where the firm's money went
The most important factor to consider when choosing investments is...
whether or not the investment suits the purchaser's goals
What a bond brings you over a period of time at a particular price is called what?
yield
Which of the following factors does NOT influence your investment choices?
your parents investment choice
