Personal Finance CH 17
The net change column of a stock listing shows the cash dividend per share for the year, listed in dollars and cents.
false
When interest rates are low, people tend to buy fewer stocks.
false
With a margin purchase, you are betting a stock will decrease in value.
false
________ stocks are stocks in corporations that reinvest their profits into the business so it can grow.
growth
A stock _______ is a benchmark that investors use to judge the performance of their investments.
index
The price for which a stock is bought and sold in the marketplace is called the
market value.
When securities are bought and sold through brokers but not through a stock exchange, the transaction is ________ .
over the counter
The ______ value of a stock is an assigned dollar value given to each share of stock.
par
A type of stock that pays a fixed dividend but has no voting rights is _______ stock.
preferred
A(n) ________ is a stockholder's written authorization to transfer his or her voting rights to someone else.
proxy
Someone who buys and sells stock within a short period of time is called a speculator.
true
Stockholders can lose all of their investment if the company fails or goes out of business.
true
The Dow Jones Industrial Average is an average of the price movements of 30 major stocks listed on the New York Stock Exchange.
true
The percentage of the current stock price the dividends represent is called percent yield.
true
The Liddell Corporation's stock is selling for $60/share and its earnings per share are $12. Find the P/E ratio for Liddell Corporation.
5
Which of the following would be considered an odd lot of stocks?
50 shares
Use the following information to calculate a stock's one-year Return on Investment (calculate to the nearest single decimal point): Selling price: $50/share Dividends received during the year: $1/share Purchase price: $45/share Discount brokerage fee: $25 Number of shares owned: 200
13.3%
Which of the following is not a securities exchange?
OTCBB
The price of a share of stock divided by the corporation's earnings over the past 12 months is the
P/E ratio.
Current Profit on Stock ÷ Purchase Price + Commission =
Return on Investment
A common stock
allows stockholders to influence corporate policy.
A(n) _________ market is a prolonged period of rising stock prices and a general feeling of investor optimism.
bull
Which of the following investment techniques would more likely be used by a day trader?
buying on margin
An increase in the value of a stock over time is called a(n)
capital gain.
Using dividends previously earned on a stock to buy more shares is called
dividend reinvestment.
_______ are money paid to stockholders from the corporation's earnings.
dividends
Stocks in young, often small corporations that have higher overall risk than stocks of successful, long-established companies are called
emerging stocks.
Bull markets are usually short and savage, and stock prices may fall as much as 20 percent.
false
Dividends on preferred stock may be higher than dividends earned on common stock if the company thrives over time.
false
Growth stocks typically pay the most certain and predictable dividends.
false
_________ selling is selling stock borrowed from a broker that must be replaced at a later time.
short
A stock ________ is an increase in the number of outstanding shares of a company's stock.
split
A capital gain becomes profit only when you sell the stock.
true
A company must meet a minimum number of public shares and dollar market-value requirements to be listed on the New York Stock Exchange.
true
A stock split lowers the selling price of a stock, making the shares more affordable and encouraging investors to buy more.
true
By using direct investment, you may be able to buy shares at prices lower than on open exchanges.
true
Common stock can be issued without a par value.
true
