Personal Finance Chapter 14
Which of the following must new investors master to become more proficient
investors?
- Knowing how to use relevant information
- Knowing where to find relevant information
A legal form that lists the issues to be decided at a stockholders' meeting and
requests that stockholders transfer their voting rights to some individuals or
individual is called:
proxy
The key element to investing is:
time
Which category of stockholder receives dividends first?
Preferred
Match stocks with their characteristic. (1)
blue chip - safest stock
penny stock - typically less than one dollar
growth stock - high earnings potential
cyclical stock - follows patterns of the economy
Beginning investors must find:
good information and know how to use it
A _______ is a legal form that request that stockholders transfer their voting rights to
someone within the organization who know the situations of the company better.
proxy
A company's Web site that can be viewed anytime is:
easy accessible
The more _______ an investment has to work, the more money it will likely
accumulate.
time
Which of the following is not an advantage of investing in preferred stocks?
Dividends may be omitted by board of directors
A stock issued by a corporation that has capitalization of between $2 and $10 billion
is know as what kind of stock?
Mid cap
Information on companies' Web sites is likely to be:
more up-to-date than printed materials
Investors may choose preferred stock because it offers a predictable source of
_______
income, return, dividends, dividend, earning, earnings, returns, revenue, revenues,
profit, or profits
Which of the following is NOT a widely used stock advisory service that provides
detailed research?
Yahoo
A daily source of printed material that provides useful information about stocks is
a(n):
newspaper
Earnings per share is equal to _______ income divided by the number of outstanding
_______ of a firm's common stock.
(after-tax, net, or post-tax) (shares)
Which of the following exists to provide estimates of price-earnings ratios and
earnings per share?
Earning estimates
True or false: There are alternative sources for stock advisory services.
True
A dividend payout is the percentage of a firm's earnings paid to _______ in cash.
stockholders, shareholders, investors, or owners
All newspapers:
do not print the same stock information
A corporation's earnings divided by number of outstanding shares of a firm's
common stock is called
earnings per share
Earnings per share and price-earnings ratios are based on:
historical numbers
A measure that compares the volatility associated with a specific stock issue with
the volatility of the Standard and Poor's 500 stock index is called:
beta
The percentage of a firm's earnings paid to stockholders in cash is called:
dividend payout
What is determined by deducting all liabilities from the corporation's assets and
dividing the remainder by the number of outstanding shares of common stock?
Book value
An investment practice that is based on the assumption that a stock's intrinsic or
real value is determined by the company's future earnings is known as _______
analysis.
fundamental
Beta is a measure that compares the volatility associated with a specific stock issue
with the volatility of the:
Standard and Poor's 500 index
A market in which an investor purchases financial securities via an investment bank
or other representative from the issuer of the securities is called a(n):
primary market
Book value is determined by deducting all _______ from the corporation's assets and
dividing the remainder by the number of outstanding shares of common stock.
liabilities
A securities exchange is a marketplace where member brokers who represent
_______, buy and sell securities.
investors or individuals
An investment practice based on the assumption that a stock's intrinsic or real
value is determined by the company's future earnings is called:
fundamental analysis
A(n) _______ market is a market in which an investor purchases financial securities
via an investment bank or other representative from the issuer of those securities.
primary
A marketplace where member brokers who represent investors meet to buy and sell
securities is called a(n):
securities exchange
Joanne has never invested before. John recommends a(n) _______ _______ brokerage
firm to help her get started in investing.
full service
A licensed individual who buys or sells securities for clients is oftentimes called a(n):
account executive
When purchasing a stock, the brokerage firm will usually charge a minimum
commission between $_______ and $_______.
(5 or 7) (25 or 35)
Match typical clients with the type of brokerage firm recommended.
- Full service - Beginning investors will little experience
- Discount - People who understand "how to" and wnt to make their own decisions
- Online - Understand "how to" and are comfortable trading on the web
True or false: An account executive is also called a stockbroker.
True
A _______ order is a request to buy or sell a stock at the current price.
market
You purchased Krispy Kreme stock valued at $12,000. Your full-service investment
company charges $5 for commission. What is the total cost of the stock purchase?
$12,005
Securities sold at a particular exchange must be first _______, or _______ for trading.
(listed) (accepted or approved)
The sooner you invest, the longer your investment will have to _______
grow, increase, gain, mature, rise, accrue, or accumulate
The request to buy or sell a stock at the current market value is called a:
market order
The buy-and-hold technique includes the reinvestment of:
dividends
A day trader is an individual who buys and then later sells stock and other securities
in a very _______ period of time.
short
When buying stock on margin, the current margin requirement is _______%.
fifty or 50
It is better to invest:
for a long term to enjoy high returns
The strategy of buying a stock hoping it will increase in value over time is called:
buying long
The buy-and-hold technique increases value in what two ways?
Dividends and stock value
An individual who buys and sells stock and other securities in a very short period of
time is called a:
day trader
Buying on margin is a technique whereby an investor borrows part of the money
needed to buy a particular _______
stock or security
True or false: Buying long is the idea that when you buy a stock, it will decrease in
value.
False
A speculative technique whereby an investor borrows part of the money needed to
buy a particular stock is called:
margin
A stock issued by a corporation that has the potential of earning profits above the
average profits of all economies is known as what type of stock?
Growth
When dealing with an account executive, it is a good idea to:
be actively involved with your investment
A(n) _______ stock is an investment that pays higher-than-average dividends.
income
Earning estimates exist to provide estimates of which of the following?
- Earnings per share
- Price-earnings ratios
Powered by TCPDF (www.tcpdf.org)
