Question 1.When investors purchase bonds that mature at regular intervals in order to balance risk and return, they are creating a:
Question 2.Assume the beta for the stock market in general is 1.0 and the beta for World-Wide Television Productions is 2.4. If the stock market increases in value by 10 percent, what is the expected increase in value for the World-Wide Productions stock?
Question 3.Acme Widget, Inc. has 1,000 shareholders who own a total of one million shares of its common stock. The company earned $10 million after taxes and paid out $4 million in dividends. The firm has assets of $125 million and liabilities of $25 million. What is the book value per share?
Question 4.Many financial planners recommend that investors pick a mutual fund with an expense ratio that is:
Question 5.If a bond is quoted in the newspaper at 88.75, the current price of a $1,000 face value bond is:
Question 6.Audrey is thinking about an investment that involves buying a written pledge by a corporation to repay a specified amount of money. It also pays interest every 6 months until it matures. What investment is Audrey thinking about purchasing?
Question 7.Investors purchase corporate bonds for:
Question 8.Which one of the following would not be considered a safe investment for a conservative investor?
Question 9.Common stock dividends are paid out of profits and:
Question 10.Approximately ____________ percent of all mutual funds are open-end funds.
Question 11.Jeff Goldblum has just purchased a security which has no maturity date and no promised payments. He can recoup his investment by either selling the security to another individual or to the issuer, if the issuer ever makes an offer to buy it. What type of security did Jeff purchase?
Question 12.A short-term investment objective is one that will be accomplished within a period of:
Question 13.A stock that remains stable during declines in the economy is called a(n) ____________ stock.
Question 14.Acme Widget, Inc. has 1,000 shareholders who own a total of one million shares of its common stock. The stock currently sells for $85 per share. The company earned $5 million after taxes. The annual dividend is $0.50 per share. The firm has assets of $125 million and liabilities of $25 million. What is the P/E ratio?
Question 15.Which one of the following bonds would likely have the lowest risk?
Question 16.Which type of risk affects only a specific company or a specific industry?
Question 17.Which type of mutual fund invests primarily in high-yield, high-risk corporate bonds?
Question 18.Sandra Peterson has been thinking about investing in corporate bonds. She is concerned about safety and wants the most secure bond investment possible. She would most likely
invest in ____________ bonds.
Question 19.Acme Widget, Inc. has one million shares of common stock outstanding at a price per share of $85. The company earned $5 million after taxes. The annual dividend is $3.50 per share. The firm has assets of $125,000,000 and liabilities of $25,000,000. What is the dividend yield?
Question 20.Which one of these is not an example of systematic risk?
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