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 […]
Date: September 3rd, 2020
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 […]
Date: September 3rd, 2020
QUESTION What is the world’s largest stock exchange? A) NASDAQ B) American Stock Exchange C) over-the-counter market D) New York Stock Exchange E) Boston Stock Exchange ANSWER Answer: D Explanation: D) The NYSE was established in 1792 and accounts for about 45 percent of all stock trading done in the United States.
Date: September 3rd, 2020
QUESTION Which of the following is NOT true of a stock exchange? A) It can execute stock trades via brokers on a trading floor. B) It can sell stocks issued directly from corporations. C) It can link buyers and sellers of stock directly. D) It can focus on trading stock of particular types of companies. […]
Date: September 3rd, 2020
QUESTION Mutual funds offer the opportunity for greater diversity of investment, so they present very little risk to clients. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Mutual funds include a diverse array of stocks, bonds, and other securities; however, they may focus on a particular industry sector or investment […]
Date: September 3rd, 2020
QUESTION Which of the following terms does NOT reflect a method to retire bonds? A) convertible bonds B) revenue bonds C) sinking-fund bonds D) callable bonds E) serial bonds ANSWER Answer: B Explanation: B) Convertible, sinking-fund, callable, and serial are all ways of paying off, or retiring, bonds. Revenue bonds are a type of […]
Date: September 3rd, 2020
QUESTION What is the term for an investment bank’s practice of buying new issues of corporate securities and selling them to the public? A) syndication B) underwriting C) initial public offering D) auctioning E) institutional investing ANSWER Answer: B Explanation: B) The activity of buying new issues of stocks or bonds from issuing corporations […]
Date: September 3rd, 2020
QUESTION The Massive Steel Corporation issued bonds to finance upgrades to its aging plants. The upgrades are costly, and the bond issue is a substantial amount. To ensure its ability to pay the bonds on maturity, Massive Steel makes annual payments to a dedicated fund. What type of bonds did the company issue? A) convertible […]
Date: September 3rd, 2020
QUESTION The yield of a particular security is determined by dividing the dividend or income by the security’s market price. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: Yield is income from securities, calculated by dividing income or dividend by the market price. An investing-for-income strategy focuses on obtaining the […]
Date: September 3rd, 2020
QUESTION Which of the following gives an investor a portion of ownership in the issuer of a security? A) U.S. Treasury bond B) bank certificate of deposit C) stock D) secured corporate bond E) municipal bond ANSWER Answer: C Explanation: C) Stocks represent shares of ownership in a company.
Date: September 3rd, 2020
