QUESTION 4 1. All of the following are true regarding stock prices except they a

Question

QUESTION 4

1.      All of the following are true regarding stock prices except they

are influenced by supply and demand.

are regulated by the Federal Reserve Board.

have no set limit.

generally increase with good financial news.

1 points

QUESTION 5

1.      Of the following, which is not used in measuring a stock's return?

Price of the stock at time of purchase

Average price of stock during period owned

Price of stock at time of sale

Dividends earned during period owned

1 points

QUESTION 6

1.      If you believe that a firm will grow rapidly in the future, you should buy its

bonds.

notes.

common stock.

preferred stock.

1 points

QUESTION 8

1.      All of the following are true statements about dividends except

dividends are based upon earnings.

no dividends may be paid.

dividends are based upon the number of shares.

dividends are contractually guaranteed to common stockholders.

1 points

QUESTION 12

1.      Before you start to invest, you should ensure liquidity by owning

individual stocks.

money market mutual funds.

options and puts.

corporate bonds.

1 points

QUESTION 13

1.      If you purchase 100 shares of Ajax Corporation for $15 a share and one year later sell it for $20 a share, what was your return if the stock paid $2 per share dividends? (Ignore commissions and trading fees. Round to the nearest whole percent.)

10%

33%

47%

40%

QUESTION 16

1.      An investment that has the potential to rise substantially in value also has the potential to decline substantially in value. If you cannot afford the possible loss, you should not make that investment.

True

False

1 points

QUESTION 17

1.      One of the factors involving risks of investments is the time period you have to keep your money invested.

True

False

1 points

QUESTION 18

1.      One advantage of investing in commercial real estate compared to stock, bonds, and mutual funds is that real estate

is more likely to go up in value.

is more marketable.

may yield income and tax advantages not available with the other investments.

is less risky than the other investments.

1 points

QUESTION 19

1.      You can estimate the amount by which your wealth will increase from an investment using

standard deviation.

discounted range of returns.

time value of money.

analysis of past returns.

are influenced by supply and demand.

are regulated by the Federal Reserve Board.

have no set limit.

generally increase with good financial news.

Explanation / Answer

4.are regulated by the Federal Reserve Board.

5.Average price of stock during period owned

6.common stock.

8.dividends are contractually guaranteed to common stockholders.

12.individual stocks.

13.47%

16.True

17.True

18.is more likely to go up in value.

19.time value of money.

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