QUESTION What type of bond gives the bondholder options to obtain the highest return? A) callable bonds B) prerefunded bonds C) convertible bonds D) serial bonds E) sinking-fund bonds ANSWER Answer: C Explanation: C) Convertible bonds can be converted by the bondholder into common stock of the corporation that issued the bonds. Bondholders can […]
QUESTION Which of the following regulates the buying and selling of stocks? A) U.S. Treasury B) Securities and Exchange Commission C) U.S. Department of Commerce D) Moody’s E) Standard & Poor’s ANSWER Answer: B Explanation: B) The SEC is a federal agency that regulates the various U.S. stock exchanges.
QUESTION Natsuko’s portfolio contains a number of convertible bonds. She is considering her options for maximizing returns from this investment. Where will Natsuko have the best chance of finding information that will guide her decision? A) the issuer’s callable date for the bonds B) the Dow C) the S&P 500 D) the Wilshire 5000 index […]
QUESTION Which investment strategy is least appropriate for an uninformed investor who wants to use a discount online broker? A) investing for income B) buying and holding C) investing for growth D) market timing E) value investing ANSWER Answer: D Explanation: D) Market timing may be the most difficult of all investment strategies. It […]
QUESTION The Helga’s Health board of directors feels the stock price for its Norwegian herbal supplements company has become too high and is pricing out potential investors. What action should the board take? A) lower the par value of its stock B) increase dividends to lower the market value C) issue a 2-for-1 stock split […]
QUESTION Which of the following has the LEAST influence on investors looking to buy stocks? A) book value B) dividends C) interest rate D) par value E) market value ANSWER Answer: D Explanation: D) Par value is the face value of a share of stock and is an arbitrary figure set by the issuing […]
QUESTION Traders on the floor of the American Stock Exchange sell securities for what types of businesses and based on what value? A) large, established U.S. companies; market value B) midsized growth companies; par value C) prominent high-tech firms; book value D) midsized growth companies; market value E) large, established U.S. companies; book value […]
QUESTION Marshall wants to earn a regular income from stock investments to supplement his salary. Which of the following should he focus on in his research before buying any stocks? A) book value B) dividends C) stock splits D) par value E) market value ANSWER Answer: B Explanation: B) Dividends are part of a […]
QUESTION Urvashi owns 10 shares of Kloud Komputing stock, with a market value of $500 per share. The company issues a 2-for-1 stock split. After the split, what is the total value of Urvashi’s stake in Kloud Komputing? A) $10,000 B) $2,500 C) $5,000 D) $1,000 E) $20,000 ANSWER Answer: C Explanation: C) In […]
QUESTION A biotech company is planning to build a new manufacturing plant. The board is weighing the advantages and disadvantages of going public and issuing stock to raise funds. Which of the following does NOT describe a factor of this stock issue? A) The company avoids incurring additional debt by issuing stock. B) The company […]
