Question 1

A market for existing financial securities that are currently traded between investors is called the ____________ market.

Accepted Answer

A)  technical
B)  fundamental
C)  efficient
D)  secondary
E)  primaryF) A) and C)
G) A) and E)

Question 2

If the board of directors approves a two for one stock split, an investor who owns 200 shares before the split owns ____________ shares after the split.

Accepted Answer

A)  75
B)  200
C)  225
D)  400
E)  450F) A) and D)
G) C) and E)

Question 3

A call option gives the owner the right to sell 100 shares of a stock at a guaranteed price before a definite expiration date.

Accepted Answer

A) True 
 B)False

Question 4

When investors are optimistic about the overall economy and buy stocks, it is known as a(n)  ____________ market.

Accepted Answer

A)  book
B)  bear
C)  bull
D)  equity
E)  decliningF) C) and E)
G) A) and E)

Question 5

Capitalization is ___________

Accepted Answer

A)  issued by a company that has a capitalization of $150 million or less.
B)  issued by a corporation that has the potential to earn profits above the average profits of all firms in the economy.
C)  the total amount of securities-stocks and bonds-issued by a corporation.
D)  follows the business cycle of advances and declines in the economy.
E)  A safe investment that generally attracts conservative investorsF) B) and E)
G) A) and E)

Question 6

A blue-chip stock is too speculative for most investors.

Accepted Answer

A) True 
 B)False

Question 7

Today, it is possible for investors to access a corporation's home page in order to evaluate an investment in its stock.

Accepted Answer

A) True 
 B)False

Question 8

If the board of directors approves a three for one stock split, an investor who owns 300 shares before the split owns ____________ shares after the split.

Accepted Answer

A)  100
B)  200
C)  300
D)  900
E)  1,800F) A) and C)
G) A) and B)

Question 9

What is the largest sector of the Toronto Stock Exchange?

Accepted Answer

A)  Energy
B)  Industrials
C)  Utilities
D)  Financials
E)  MaterialsF) A) and B)
G) C) and E)

Question 10

The most important priority that an investor in common stock enjoys is receiving cash dividends before preferred stockholders are paid any cash dividends.

Accepted Answer

A) True 
 B)False

Question 11

The type of stock in which stockholders are assured that omitted dividends will be paid to them before other dividends are paid is ____________ stock.

Accepted Answer

A)  cumulative preferred
B)  convertible preferred
C)  participating preferred
D)  common
E)  callable preferredF) D) and E)
G) A) and D)

Question 12

When a corporation exchanges stock for a specified amount of money, it is exercising its ____________ feature.

Accepted Answer

A)  participating
B)  cumulative
C)  convertible
D)  call
E)  terminationF) C) and D)
G) A) and C)

Question 13

A proxy is a legal form that lists the issues to be decided at a stockholders' meeting and requests that stockholders transfer their voting rights to some individual or individuals.

Accepted Answer

A) True 
 B)False

Question 14

If a corporation has more than one stock issue, the common stock is always listed first.

Accepted Answer

A) True 
 B)False

Question 15

Typically, growth companies pay out ____________ of their earnings in dividends to their stockholders.

Accepted Answer

A)  over 95 percent
B)  between 65 percent and 75 percent
C)  between 50 and 65 percent
D)  between 30 and 50 percent
E)  less than 30 percentF) A) and B)
G) B) and D)

Question 16

A stock split is a procedure in which the shares of stock owned by existing shareholders are divided into a larger number of shares.

Accepted Answer

A) True 
 B)False

Question 17

A public corporation is a corporation whose stock is owned by relatively few people and is not traded openly in the stock market.

Accepted Answer

A) True 
 B)False

Question 18

A securities exchange is a marketplace where member brokers who are representing investors meet to buy and sell securities.

Accepted Answer

A) True 
 B)False

Question 19

A market in which an investor purchases financial securities (via an investment bank or other representative from the issuer of those securities is called the ____________ market.

Accepted Answer

A)  technical
B)  fundamental
C)  efficient
D)  secondary
E)  primaryF) B) and C)
G) A) and B)

Question 20

Devin Scott is looking for an investment that will provide a predictable source of income.With this goal in mind, which of the following industry groups would normally be classified as an industry to invest in for income?

Accepted Answer

A)  public utilities
B)  electronics
C)  automobile manufacturing
D)  steel manufacturing
E)  paper manufacturingF) A) and C)
G) B) and C)

Exam 11: Investing in Stocks

A securities exchange is a marketplace where member brokers who are representing investors meet to buy and sell securities.

Correct AnswerverifiedShow Answer

Typically, growth companies pay out ____________ of their earnings in dividends to their stockholders.

Correct AnswerverifiedShow Answer

If the board of directors approves a two for one stock split, an investor who owns 200 shares before the split owns ____________ shares after the split.

Correct AnswerverifiedShow Answer

A blue-chip stock is too speculative for most investors.

Correct AnswerverifiedShow Answer

The most important priority that an investor in common stock enjoys is receiving cash dividends before preferred stockholders are paid any cash dividends.

Correct AnswerverifiedShow Answer

Devin Scott is looking for an investment that will provide a predictable source of income.With this goal in mind, which of the following industry groups would normally be classified as an industry to invest in for income?

Correct AnswerverifiedShow Answer

What is the largest sector of the Toronto Stock Exchange?

Correct AnswerverifiedShow Answer

If a corporation has more than one stock issue, the common stock is always listed first.

Correct AnswerverifiedShow Answer

A call option gives the owner the right to sell 100 shares of a stock at a guaranteed price before a definite expiration date.

Correct AnswerverifiedShow Answer

A stock split is a procedure in which the shares of stock owned by existing shareholders are divided into a larger number of shares.

Correct AnswerverifiedShow Answer

When investors are optimistic about the overall economy and buy stocks, it is known as a(n) ____________ market.

Correct AnswerverifiedShow Answer

A public corporation is a corporation whose stock is owned by relatively few people and is not traded openly in the stock market.

Correct AnswerverifiedShow Answer

Capitalization is ___________

Correct AnswerverifiedShow Answer

A market for existing financial securities that are currently traded between investors is called the ____________ market.

Correct AnswerverifiedShow Answer

If the board of directors approves a three for one stock split, an investor who owns 300 shares before the split owns ____________ shares after the split.

Correct AnswerverifiedShow Answer

Today, it is possible for investors to access a corporation's home page in order to evaluate an investment in its stock.

Correct AnswerverifiedShow Answer

The type of stock in which stockholders are assured that omitted dividends will be paid to them before other dividends are paid is ____________ stock.

Correct AnswerverifiedShow Answer

A market in which an investor purchases financial securities (via an investment bank or other representative from the issuer of those securities is called the ____________ market.

Correct AnswerverifiedShow Answer

When a corporation exchanges stock for a specified amount of money, it is exercising its ____________ feature.

Correct AnswerverifiedShow Answer

A proxy is a legal form that lists the issues to be decided at a stockholders' meeting and requests that stockholders transfer their voting rights to some individual or individuals.

Correct AnswerverifiedShow Answer

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