1. (TCO 5) If an investment objective is considered to be intermediate term, the

Question

1. (TCO 5) If an investment objective is considered to be intermediate term, then this means the goal should be achieved in what time frame? (Points : 1)        Less than 2 years
       Over 10 years
       More than 5 years
       In 1–5 years
       None of the above Question 2.2. (TCO 5) If an investment objective is considered to be long term, then this means the goal should be achieved in what time frame? (Points : 1)        Less than 2 years
       In 2–5 years
       More than 5 years
       Less than 1 year
       None of the above Question 3.3. (TCO 5) You currently hold a $1,000 corporate bond; however, if interest rates in the overall economy decrease, which of the following is most likely to be the market value of this bond? (Points : 1)        The bond is worthless.
       $1,000
       $900
       $1,100
       It is impossible to determine whether the bond's value will increase or decrease. Question 4.4. (TCO 5) Which of the following individuals should have the highest tolerance for risk? (Points : 1)        Joan Cummings, who is a single mother with two small children
       Darren Carter, who works for American Airlines and is worried that he is going to be laid off soon
       Barry Parks, who is an investment banker and earns over $200,000 per year
       Michael Clark, who is 74 years old and been retired for 6 years
       Fred Funderbunk, who delivers pizzas and makes about $15,000 per year Question 5.5. (TCO 5) Mary Ann recently received a $20,000 gift from her uncle and is considering investing in stocks, because she knows that historically they have earned an approximately 10–12% rate of return over the last few years. Referring to aspects of investing, Mary Ann is most concerned about which of the following? (Points : 1)        Risk
       Return
       Diversification
       Liquidity
       Income Question 6.6. (TCO 5) A $1,000 corporate bond pays 6.5% a year. What is the annual interest you will receive?  (Points : 1)         $0.65
        $6.50
        $65.00
        $1,060.50
        $1,065.00 Question 7.7. (TCO 5) _____ risk occurs when an investment does not keep up with increasing price levels in our economy. (Points : 1)        Market
       Interest
       Inflation
       Business failure
       Current Question 8.8. (TCO 5) John Farmer recently received a legal form from the company where he owns stocks that list the issues to be decided at the annual stockholders' meeting. The item asks that he signs something that allows someone else to vote for him. What has he received? (Points : 1)        Equity
       Proxy
       Voting rights
       Dividends
       None of the above Question 9.9. (TCO 5) You received a notice that shares of stock you purchased and own will be divided into a larger number. Ultimately, you will get two shares for every share that you own. What has happened? (Points : 1)        A dividend split
       A proxy split
       A stock split
       A banana split
       An equity split Question 10.10. (TCO 5) If Orlando Blodgett is buying the stock of the Getaway Caribbean Cruise Company. If he buys the stock today, knowing it is the first day it is selling without the dividend for this quarter, on what date is Orlando buying the stock? (Points : 1)        Record date
       Sale date
       Payment date
       Ex dividend date
       None of the above Question 11.11. (TCO 5) Arnell Johnson bought 250 shares of Black Petroleum Company for $95 per share. He paid a commission of $55 when he purchased this stock. He sold the stock 5 years later for $115 per share. When he sold it he paid a commission of $70. While he held the stock, it paid a dividend of $3.50 per share. What was Arnell's total dollar return on this stock? (Points : 1)        $5,820
       $5,000
       $5,015
       $5,750
       $5,875 Question 12.12. (TCO 5) A very safe investment that generally attracts conservative investors is called a(n) _____ stock.  (Points : 1)         penny
        cyclical
        growth
        small cap
        blue chip Question 13.13. (TCO 5) One option for long-term corporate financing is equity financing, and this is a popular choice because (Points : 1)        a lender is always available to provide this type of financing.
       it does not cost anything to sell in the primary market.
       repayment doesn't have to be made for 10 years or more.
       only interest must be paid for the first 5 years.
       it does not have to be repaid. Question 14.14. (TCO 5) Which of the following statements is false? (Points : 1)        Stockholders elect the board of directors.
       Stockholders pay taxes on dividends.
       Intelligent investors must be concerned about future after-tax profits.
       Dividend payments may not be reduced or omitted at any time.
       Corporate dividends may not always be paid in cash. Question 15.15. (TCO 5) What is the approximate market value for a $1,000 corporate bond that pays 7% interest when comparable bonds are paying 8% interest? (Points : 1)        $800
       $875
       $70
       $1,142
       $1,000 Question 16.16. (TCO 5) Which of the statements below is false? (Points : 1)        Stock is a form of equity capital.
       Stock does not have a maturity date.
       Bonds are a form of debt capital.
       Bonds do not have to be repaid at maturity.
       Interest payments are made to bondholders. Question 17.17. (TCO 5) A _____ bond is backed only by the reputation of the issuing corporation. (Points : 1)        preemptive
       mortgage
       indenture
       debenture
       Treasury Question 18.18. (TCO 5) A(n) _____ bond is one that can be exchanged, at the owner's option, for a specified number of shares of the corporation's stock. (Points : 1)        debenture
       convertible
       indenture
       flexible
       subordinated Question 19.19. (TCO 5) A $1,000 corporate bond is convertible to 20 shares of the corporation's common stock. What is the minimum price that the stock must attain before bondholders would consider converting a bond to the company's common stock? (Points : 1)        $10
       $20
       $30
       $40
       $50 Question 20.20. (TCO 5) _____ bonds are a part of a single issue, but they mature on different dates. (Points : 1)        Serial
       Mortgage
       Sinking fund
       Subordinate
       Debenture 1. (TCO 5) If an investment objective is considered to be intermediate term, then this means the goal should be achieved in what time frame? (Points : 1)        Less than 2 years
       Over 10 years
       More than 5 years
       In 1–5 years
       None of the above

Explanation / Answer

Answers:

1. (1-5) years

2. More than 5 years

3. $1100 ( when interest falls the price of a bond increases)

4. Barry parks earning more than $200,000

5. Diversification

6. $65

7. Inflation risk

8.Proxy

9.Equity split

10.ex-dividend date

11.$5750

12.blue chip

13. . it does not have to be re-paid

14. dividend payments may not be reduced or ommitted at any time

15.

16.bonds do not have to be re-paid

17.debenture

18.convertible

19.$50

20. serial bonds.

  

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