Question 1

Maureen owns 20% of the common stock of the Queen Bean Corporation. The company announced plans to offer an additional 10,000 shares of common stock for sale. If Maureen exercises her preemptive rights, Queen Bean must offer her the opportunity to purchase:

Accepted Answer

A)   8,000 shares.
B)   2,000 shares.
C)   as many of the new shares as the investor is willing and able to buy.
D)   20% of the outstanding preferred stock.E) B) and C)
F) A) and D)

Question 2

Growth stocks are the stocks of corporations whose earnings are expected to grow faster than the overall economy.

Accepted Answer

A) True 
 B)False

Question 3

While common stockholders of corporations have voting rights, preferred stockholders generally do not.

Accepted Answer

A) True 
 B)False

Question 4

Most businesses prefer to meet their long-term financial needs through:

Accepted Answer

A)   debt financing.
B)   capital from the sale of stock.
C)   retained earnings.
D)   capital from the sale of bonds.E) A) and D)
F) B) and C)

Question 5

If a publicly traded corporation fails to maintain specific minimum requirements, the exchange can ________ the firm's securities.

Accepted Answer

A)   relist
B)   transfer ownership of
C)   delist
D)   provide preemptive rights toE) A) and B)
F) B) and C)

Question 6

The maturity date of a bond refers to the date on which the interest payment is due to be paid.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

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

Question 8

Idle Time Gaming announced a 2-for-1 common stock split for investors on record. Which of the following will occur?

Accepted Answer

A)   The stock price will increase to reflect the value of two shares for every one share.
B)   Each share will be worth ½ of its previous value, but shareholders' total value of Idle Time Gaming will remain the same.
C)   The value of Idle Time common stock will remain the same, for a short period of time, and then experience a guaranteed growth spurt.
D)   The shareholders will sell their shares immediately after the split and take their capital gains, as well as provide others an opportunity to invest in Idle Time Gaming.E) A) and C)
F) All of the above

Question 9

Zach purchased 200 shares of Fast Track Corporation last year. This year, he plans to hire an attorney to go after the company for failure to pay dividends. If Zach follows through with his plan, he will probably win the lawsuit because companies are obligated to pay their stockholders dividends for owning and holding the firm's stock.

Accepted Answer

A) True 
 B)False

Question 10

An unsecured bond, backed only by the well-respected name of the organization, is called a________ bond.

Accepted Answer

A)   mortgage
B)   leveraged
C)   debenture
D)   convertibleE) B) and D)
F) All of the above

Question 11

__________ are collections of stocks that are traded on exchanges but are traded more like individual stocks than like mutual funds.

Accepted Answer

A)   REITs
B)   ETFs
C)   LOCs
D)   SRTsE) A) and C)
F) None of the above

Question 12

The ________ is a large national electronic stock trading market.

Accepted Answer

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

Question 13

Brokers prefer trading shares of a firm's stock in multiples of 100, known as:

Accepted Answer

A)   margin blocks.
B)   odd lots.
C)   round lots.
D)   market lots.E) A) and B)
F) B) and C)

Question 14

Mutual fund investors will note that:

Accepted Answer

A)   Fund managers have not yet added foreign securities into their funds.
B)   Mutual funds cannot be purchased through a traditional brokerage house.
C)   Loads can vary from one mutual fund to another. The fund manager dictates the commissions and fees.
D)   By law, mutual funds can no longer charge loads.E) A) and D)
F) B) and D)

Question 15

Before issuing stock or bonds, corporations must meet the disclosure requirements of the Federal Trade Commission (FTC).

Accepted Answer

A) True 
 B)False

Question 16

Although companies that issue bonds are required to pay interest, companies issuing stock are not required to pay dividends.

Accepted Answer

A) True 
 B)False

Question 17

According to the Spotlight on Small Business box, which of the following is NOT a way the SEC changes altered securities laws following the JOBS Act?

Accepted Answer

A)   Raised the number of shareholders a company could have before registering with the SEC from 500 to 2,000.
B)   Allows equity crowdfunding through investment brokers or portals.
C)   Expanded the ability of private companies to raise capital through limited stock offerings.
D)   Required small businesses to have at least 100 employees before allowing crowdfunding to be pursued.E) None of the above
F) All of the above

Question 18

Which of the following measures how quickly an investor has access to his/her invested funds, if they are needed?

Accepted Answer

A)   risk
B)   tax consequences
C)   yield
D)   liquidityE) All of the above
F) A) and C)

Question 19

Stock market "circuit breakers" stop stock trading for a short time when the stock market experiences a significant drop in stock values.

Accepted Answer

A) True 
 B)False

Question 20

The U.S. government just announced an increase in the interest rate paid on U.S. government bonds. This will likely cause a decrease in the interest rates paid on corporate bonds.

Accepted Answer

A) True 
 B)False

Exam 19: Using Securities Markets for Financing and Investing Opportunities

Brokers prefer trading shares of a firm's stock in multiples of 100, known as:

Correct Answer
verified

__________ are collections of stocks that are traded on exchanges but are traded more like individual stocks than like mutual funds.

Correct Answer
verified

Which of the following measures how quickly an investor has access to his/her invested funds, if they are needed?

Correct Answer
verified

The maturity date of a bond refers to the date on which the interest payment is due to be paid.

Correct Answer
verified

Before issuing stock or bonds, corporations must meet the disclosure requirements of the Federal Trade Commission (FTC).

Correct Answer
verified

An unsecured bond, backed only by the well-respected name of the organization, is called a________ bond.

Correct Answer
verified

The U.S. government just announced an increase in the interest rate paid on U.S. government bonds. This will likely cause a decrease in the interest rates paid on corporate bonds.

Correct Answer
verified

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

Correct Answer
verified

Stock market "circuit breakers" stop stock trading for a short time when the stock market experiences a significant drop in stock values.

Correct Answer
verified

Mutual fund investors will note that:

Correct Answer
verified

Growth stocks are the stocks of corporations whose earnings are expected to grow faster than the overall economy.

Correct Answer
verified

Maureen owns 20% of the common stock of the Queen Bean Corporation. The company announced plans to offer an additional 10,000 shares of common stock for sale. If Maureen exercises her preemptive rights, Queen Bean must offer her the opportunity to purchase:

Correct Answer
verified

Although companies that issue bonds are required to pay interest, companies issuing stock are not required to pay dividends.

Correct Answer
verified

Most businesses prefer to meet their long-term financial needs through:

Correct Answer
verified

The ________ is a large national electronic stock trading market.

Correct Answer
verified

While common stockholders of corporations have voting rights, preferred stockholders generally do not.

Correct Answer
verified

Correct Answer
verified

If a publicly traded corporation fails to maintain specific minimum requirements, the exchange can ________ the firm's securities.

Correct Answer
verified

Idle Time Gaming announced a 2-for-1 common stock split for investors on record. Which of the following will occur?

Correct Answer
verified

According to the Spotlight on Small Business box, which of the following is NOT a way the SEC changes altered securities laws following the JOBS Act?

Correct Answer
verified

Exam 19: Using Securities Markets for Financing and Investing Opportunities

Brokers prefer trading shares of a firm's stock in multiples of 100, known as:

Correct AnswerverifiedShow Answer

__________ are collections of stocks that are traded on exchanges but are traded more like individual stocks than like mutual funds.

Correct AnswerverifiedShow Answer

Which of the following measures how quickly an investor has access to his/her invested funds, if they are needed?

Correct AnswerverifiedShow Answer

The maturity date of a bond refers to the date on which the interest payment is due to be paid.

Correct AnswerverifiedShow Answer

Before issuing stock or bonds, corporations must meet the disclosure requirements of the Federal Trade Commission (FTC).

Correct AnswerverifiedShow Answer

An unsecured bond, backed only by the well-respected name of the organization, is called a________ bond.

Correct AnswerverifiedShow Answer

The U.S. government just announced an increase in the interest rate paid on U.S. government bonds. This will likely cause a decrease in the interest rates paid on corporate bonds.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Stock market "circuit breakers" stop stock trading for a short time when the stock market experiences a significant drop in stock values.

Correct AnswerverifiedShow Answer

Mutual fund investors will note that:

Correct AnswerverifiedShow Answer

Growth stocks are the stocks of corporations whose earnings are expected to grow faster than the overall economy.

Correct AnswerverifiedShow Answer

Maureen owns 20% of the common stock of the Queen Bean Corporation. The company announced plans to offer an additional 10,000 shares of common stock for sale. If Maureen exercises her preemptive rights, Queen Bean must offer her the opportunity to purchase:

Correct AnswerverifiedShow Answer

Although companies that issue bonds are required to pay interest, companies issuing stock are not required to pay dividends.

Correct AnswerverifiedShow Answer

Most businesses prefer to meet their long-term financial needs through:

Correct AnswerverifiedShow Answer

The ________ is a large national electronic stock trading market.

Correct AnswerverifiedShow Answer

While common stockholders of corporations have voting rights, preferred stockholders generally do not.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If a publicly traded corporation fails to maintain specific minimum requirements, the exchange can ________ the firm's securities.

Correct AnswerverifiedShow Answer

Idle Time Gaming announced a 2-for-1 common stock split for investors on record. Which of the following will occur?

Correct AnswerverifiedShow Answer

According to the Spotlight on Small Business box, which of the following is NOT a way the SEC changes altered securities laws following the JOBS Act?

Correct AnswerverifiedShow Answer

Correct Answer
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