When placing a limit order, the buy will be executed when….

the stock reaches the price of the limit

What can be included in ones investment portfolio?

Anythng you put money into with an anticipated gain.

Serious investors need to hire a professional stock broker

If you don't have the time to manage your portfolio

to calculate the P/E ratio:

share price of stock/earnings per share

100 shares @ $50; to sell if the price falls to $25, what kind of order should you place?

A stop loss order for 100 shares at $25.

In Modern Portfolio theory, we look at the following

risk tollerance and expected returns

What makes up a trading or ticker symbol?

A combination of letters and numbers

What is the definition of a broker?

A broker acts on behalf of others to earn a commission.

If a company goes bankrupt, which securitiy is most likely worthless?

The company’s preferred stock

What is involved in an Initial Public Offering (IPO) process?

Assembling a team of professionals with IPO experience

What partially defines a Bull Market?

A positive outlook about the current business cycle

What is a negative of investing in ETFs?

You don't actually own the underlying asset

Sue sells 12 shares to Will for $2.00 each. We can assume that

both Sue and Will expected to benefit.

Which of the following organizations insures you against your losses in the stock market?

None of the answers are correct

What are the benefits of investing in mutual funds instead of stocks?

It's a way to diversify your investments and min. risk

What does it mean if a company announces bonus shares in the ratio of 5:1?

Investors will get a 20% stock bonus as their dividend

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Stock Exam

37 termsStudBud Administration143 plays

Securities and Investments Spring 2019

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Questions 37

Answers

1
Which is the oldest stock exchange of the US ?
NYSE
S&P 500
NASDAQ
Dow Jones
2
When placing a limit order, the buy will be executed when….
the stock raises by the amount of the limit
when you place the order
the stock changes by the amoun of the limit
the stock reaches the price of the limit
3
The total cost, including the broker’s commission of 2%, for 100 shares of SPOT at $25 a share
3000
2500
2450
2550
4
What can be included in ones investment portfolio?
stocks, bonds, mutual funds, and real estate only.
stocks, bonds, mutual funds but not real estate
stocks, real estate, bonds but not mutual funds
Anythng you put money into with an anticipated gain.
5
A person who starts a business to produce a new product in the marketplace is known as:
A manager.
An entrepreneur.
A bureaucrat.
Don't Know.
6
Serious investors need to hire a professional stock broker
Only if they want a discount on trades
you never need a broker
If you don't have the time to manage your portfolio
In order to legally profit from stock trading
7
to calculate the P/E ratio:
annual profits/earnings per share
share price of stock/earnings per share
price per share/annual expenses
annual profits / annual expenses
8
100 shares @ $50; to sell if the price falls to $25, what kind of order should you place?
A sell market order for 100 shares.
A stop loss order for 100 shares at $25.
A sell limit order for 100 shares at $25.
A sell limit order for 100 shares at $50.
9
Which theory requires you to look at stocks traded on different markets?
Modern Portfolio Theory
Capital Asset Pricing Model
Fibonacci
Arbitrage Price Theory
10
A public companies financial information must be released in the form of a ______ annually.
Prospectus
Annual Report
Cash Flow Sheet
Balance Sheet
11
In Modern Portfolio theory, we look at the following
Index rates of returns
risk tollerance and expected returns
standard deviation and price of stock
none of the answers are correct
12
Income that a company may distribute to its shareholders from it's profits annually
Prospectus
Income
Dividends
Bonus
13
A growing stock market is a ____ market and a falling stock market is a ____ market.
falling, rising
bull, bear
down, up
bear, bull
14
Simon bought MSFT at $50 a share and sold it at $60. What was the % change in stock price?
16.6% increase
10% increase
20% decrease
20% increase
15
What makes up a trading or ticker symbol?
Two numbers
A combination of letters and numbers
A combination of letters, numbers, and symbols
One to five letters
16
Who sets the price of a stock in the stock market?
Securities and Exchange Commission
Stock Exchange President
buyers and sellers
Congress and the President
17
Stock market investments are ideal for what time horizon:
neither
short-term
both
long-term
18
What is the definition of a broker?
Only agents in the antiques biz are legally "Brokers"
A broker acts on behalf of others to earn a commission.
A broker trades for herself as a principal and profits.
Only agents in real estate are legally "brokers"
19
A stock market must have
people meeting each other face to face.
some land on which the market is locate
buyers and sellers.
all of the above.
20
Investments that are riskier tend to provide higher returns over time.
True
False
Don’t know/Not sure
21
A higher EPS is always better
true
false
22
If a company goes bankrupt, which securitiy is most likely worthless?
The company’s common stock
The company’s bonds
The company’s preferred stock
23
P/E ratio refers to the
price and expenses
profits and expenses
profits and earnings
price and earnings
24
What is involved in an Initial Public Offering (IPO) process?
Assembling a team of professionals with IPO experience
All of the above
Finding a securities dealer willing to underwrite the IPO
A profitable track record and proof of future income
25
When you "short" a stock, what is your fist action?
borrow
sell
buy
buy to cover
26
How many stocks were in the S&P 500?
500
1000
It depends on the market
200
27
A lower P/E is always best
true
false
28
If you buy a company’s stock…
The co will return your original investment w/interest
You have lent money to the company
You own a part of the company
You are liable for the company’s debts
29
What partially defines a Bull Market?
Stimulating energy drinks
Low stock prices
Lack of investor confidence
A positive outlook about the current business cycle
30
The EPS ratio refers to:
Expected Profits of stock
earnings/share
expense price shares
earnings, profits, stock
31
What is a negative of investing in ETFs?
ETFs don't have as high of returns as the underlying asset
You don't actually own the underlying asset
It is professionally managed
ETFs are very high risk and usually low profit.
32
Sue sells 12 shares to Will for $2.00 each. We can assume that
both Sue and Will expected to benefit.
Sue made a large profit at Will’s expense.
the sale could not take place without government rules.
Will paid too much.
33
What is a benefit of investing in ETFs?
all of the answers are correct
Sometimes it will perform opposite the underlying asset
It is a fairly liquid asset
You don't have to own the actual item
34
Which of the following organizations insures you against your losses in the stock market?
None of the answers are correct
FDIC (Federal Deposit Insurance Corporation)
SEC (Securities and Exchange Commission)
SIPC (Securities Investor Protection Corporation)
35
What are the benefits of investing in mutual funds instead of stocks?
You can trade one company at any time
It will cost less in terms of fees
It's a way to diversify your investments and min. risk
You can beat the S&P 500 Index
36
What does it mean if a company announces bonus shares in the ratio of 5:1?
There is not effect on investors
Investors lose a lot of money
Investors will get a 20% stock bonus as their dividend
Stocks will offer both common and preferred stock
37
What is an ETF?
Elephants are too fat.
Earning to Finance
Expense to Finance
Exchange Traded Fund

Stock Exam Flashcards | StudBud