Question 1

Issuing new common stock usually expands ownership, giving all owners the right to vote for the firm's board of directors.

Accepted Answer

A) True 
 B)False

Question 2

Issuing new stock increases the firm's outstanding debt on their balance sheet.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following securities are historically considered high quality and usually pay dividends?

Accepted Answer

A)  Dollar stocks
B)  Growth stocks
C)  Preferred stocks
D)  Blue chip stocksE) A) and B)
F) A) and C)

Question 4

When reading mutual fund quotations, the is the price per share.

Accepted Answer

A)  NAV (Net Asset Value) 
B)  PSV (Per Share Value) 
C)  MFV (Mutual Fund Value) 
D)  PAV (Partial Asset Value) E) A) and B)
F) A) and C)

Question 5

Paula's Pasta Paradise plans to offer their first stock sale to the general public. Prior to selling their stock, the firm must:

Accepted Answer

A)  pay dividends to the existing stockholders.
B)  register its stock offering with the SEC.
C)  establish an initial selling price that cannot exceed $25 per share.
D)  determine the brokers that will initially trade their stock offering.E) A) and D)
F) C) and D)

Question 6

Which of the following would be classified as an institutional investor?

Accepted Answer

A)  Pension funds
B)  Federal Reserve banks
C)  Stock exchanges
D)  Commodity brokersE) B) and D)
F) A) and B)

Question 7

A(n)  refers to the first public offering of a corporation's stock.

Accepted Answer

A)  primary market offer (PMO) 
B)  initial securities proposal (ISP) 
C)  initial public offering (IPO) 
D)  primary public sale (PPS) E) A) and B)
F) All of the above

Question 8

Samad wants to supplement his current investments with a high risk, low priced security. Which of these best fits his strategy of high risk, low price and a potentially high rate of return?

Accepted Answer

A)  Time deposits
B)  Penny stocks
C)  Blue chip stocks
D)  Split stocksE) None of the above
F) C) and D)

Question 9

Online investors expect more expert advice than investors using traditional brokerage firms.

Accepted Answer

A) True 
 B)False

Question 10

A bear is an investor that expects stock prices to rise.

Accepted Answer

A) True 
 B)False

Question 11

The Dow Jones Industrial Average provides us with a sense of direction (up or down) of the overall stock market.

Accepted Answer

A) True 
 B)False

Question 12

To reduce the risk of investing in an individual stock, an ownership position in many different companies can be achieved by purchasing shares in a(n) :

Accepted Answer

A)  indexed security.
B)  mutual fund.
C)  diversification bond.
D)  stock cooperative.E) All of the above
F) C) and D)

Question 13

The term refers to investors who anticipate increases in stock prices.

Accepted Answer

A)  bears
B)  bulls
C)  dogs
D)  lionsE) None of the above
F) A) and C)

Question 14

The high start-up costs of web-based businesses cause online brokers to charge higher commissions than traditional brokerage firms.

Accepted Answer

A) True 
 B)False

Question 15

When a corporation enjoys a profitable year, dividends must be paid.

Accepted Answer

A) True 
 B)False

Question 16

Gerald, a recent graduate of a community college, is about to make his first investment in the stock market. Which of the following would be a cautious way for Gerald to start investing?

Accepted Answer

A)  Future contracts in oil
B)  Index funds
C)  Short-selling technology stocks
D)  Commodity market transactions in precious metalsE) A) and D)
F) A) and C)

Question 17

Many foreign firms are listed on the NYSE Euronext.

Accepted Answer

A) True 
 B)False

Question 18

Changes in investor trust and confidence strongly influence stock market prices.

Accepted Answer

A) True 
 B)False

Question 19

The is a large national electronic stock trading market.

Accepted Answer

A)  SEC
B)  NYSE
C)  NASDAQ
D)  NLRBE) C) and D)
F) B) and C)

Question 20

The higher the risk associated with a bond issue, the the interest rate the organization must offer investors.

Accepted Answer

A)  higher
B)  lower
C)  more stable
D)  less stableE) A) and B)
F) None of the above

Exam 19: Using Securities Markets for Financing and Investing Opportunities

A(n) refers to the first public offering of a corporation's stock.

Correct AnswerverifiedShow Answer

Which of the following would be classified as an institutional investor?

Correct AnswerverifiedShow Answer

Issuing new common stock usually expands ownership, giving all owners the right to vote for the firm's board of directors.

Correct AnswerverifiedShow Answer

To reduce the risk of investing in an individual stock, an ownership position in many different companies can be achieved by purchasing shares in a(n) :

Correct AnswerverifiedShow Answer

Samad wants to supplement his current investments with a high risk, low priced security. Which of these best fits his strategy of high risk, low price and a potentially high rate of return?

Correct AnswerverifiedShow Answer

A bear is an investor that expects stock prices to rise.

Correct AnswerverifiedShow Answer

When a corporation enjoys a profitable year, dividends must be paid.

Correct AnswerverifiedShow Answer

Changes in investor trust and confidence strongly influence stock market prices.

Correct AnswerverifiedShow Answer

The higher the risk associated with a bond issue, the the interest rate the organization must offer investors.

Correct AnswerverifiedShow Answer

Issuing new stock increases the firm's outstanding debt on their balance sheet.

Correct AnswerverifiedShow Answer

Online investors expect more expert advice than investors using traditional brokerage firms.

Correct AnswerverifiedShow Answer

Many foreign firms are listed on the NYSE Euronext.

Correct AnswerverifiedShow Answer

Paula's Pasta Paradise plans to offer their first stock sale to the general public. Prior to selling their stock, the firm must:

Correct AnswerverifiedShow Answer

The high start-up costs of web-based businesses cause online brokers to charge higher commissions than traditional brokerage firms.

Correct AnswerverifiedShow Answer

The is a large national electronic stock trading market.

Correct AnswerverifiedShow Answer

The Dow Jones Industrial Average provides us with a sense of direction (up or down) of the overall stock market.

Correct AnswerverifiedShow Answer

Which of the following securities are historically considered high quality and usually pay dividends?

Correct AnswerverifiedShow Answer

The term refers to investors who anticipate increases in stock prices.

Correct AnswerverifiedShow Answer

When reading mutual fund quotations, the is the price per share.

Correct AnswerverifiedShow Answer

Gerald, a recent graduate of a community college, is about to make his first investment in the stock market. Which of the following would be a cautious way for Gerald to start investing?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified