Finance Final Review 2

Developed by: Dan

Final Review personal finance 2

Question 1: "Own a corporation". They elect directors via proxies, who hire a CEO

	Common Stockholders
	Corporations
	Preferred Stockholders

Question 2: Why do Corporations issue common stock?

	All of the above
	To pay for ongoing business expenses
	To raise money, start or expand a business
	They don't have to repay the money
	They don't have to pay interest

Question 3: How do you make money on stocks?

	Capital Gains and dividends
	Dividends
	Capital Gains

Question 4: (Current Quarterly dividend x 4)/Current stock price=

	Yield to Maturity
	Current Stock Yield
	Current Dividend Yield

Question 5: How do you make money on stocks?

	Appreciation of stock price or capital gain
	Depreciation of stock price or capital loss
	Current Dividend Yields

Question 6: Stock splits:

	Double the price but halve the stock
	Halve the stock and halve the price
	Double the stock but halve the price
	Double the stock and double the price

Question 7: Includes dividends plus capital gain (loss) on a stock during the holding period

	Average Annual Return
	Total Annual Return
	Geometric Annual Return

Question 8: The most meaningful type of annual return:

	Geometric
	Total
	Average

Question 9: A hybrid security with characteristics of both a stock and a bond, where you receive cash dividends before common stockholders are paid any cash dividends.

	Bonds
	Common Stock
	Preferred Stock
	Dividends

Question 10: Unpaid cash dividends accumulate and must be paid before any cash dividends are paid to the common stock holders

	Conversion Feature
	Cumulative Feature
	Risk

Question 11: Can be traded for shares of common stock (Preferred stock)

	Risk
	Conversion feature
	Cumulative Feature

Question 12: Safe investment in strong and respected companies, attracts conservative investors

	Initial public offerings
	Income Stock
	Value stocks
	Growth Stock
	Blue chip stock

Question 13: Pays higher than average dividend yield

	Initial public offerings
	Blue Chip Stock
	Growth Stock
	Income stock
	Value stocks

Question 14: Earns above average profits of all firms in the economy, less than 30% of profits are paid out as dividends, balance is reinvested in the firm. Investors realize appreciation in stock price

	Blue Chip stock
	Value Stock
	IPOs
	Growth Stock
	Income Stock

Question 15: Stocks where the underlying value of the assets is worth more than current trading price, sum of the part is>whole

	Growth stock
	Blue chip stock
	IPO
	Value Stocks
	Income Stock

Question 16: Companies Issuing shares in the primary market for the first time, typically a highly prized investment. However returns on these are not that good.

	Income stock
	Value stock
	Initial public Offerings (IPOs)
	Blue chip stock
	Growth stock

Question 17: Follows the business cycle of advances and declines in the economy

	Cyclical Stock
	IPO
	Value Stock
	Defensive Stock

Question 18: Remains stable during declines in the economy

	Defensive stock
	IPO
	Value Stock
	Cyclical Stock

Question 19: _____ The value of all securities, stocks and bonds issued by a corporation ____ The value of the common stock

	Cyclical Capitalization, Defensive Capitalization
	Total capitalization, market Capitalization
	Market Capitalization, Total Capitalization

Question 20: Classification of common stocks are:

	Long, Medium, Short and Penny
	Large, Mid, Small, and Penny
	Outer, Inner, Investor, and Nickel

Question 21: Very high risk and volatile, susceptible to fraudulent manipulation

	Penny stocks
	Small Cap Stocks
	Mid Cap Stocks
	Large Cap Stocks

Question 22: EAFE is typical benchmark index of: Also these are best bought through a mutual fund

	Penny Stocks
	Foreign Stocks
	Domestic Stocks

Question 23: Corporation's after tax earnings divided by the number of outstanding shares of common stock

	Earnings Per Share
	Betas
	Price to Earnings Ratio

Question 24: Price one share stock divided by the earnings per share of stock over the last 12 months

	Price to Earnings (PE) ratio
	Betas
	Earnings Per Share

Question 25: Used to measure stock risk. If it's lest than one it's riskier, greater than one less risky

	Betas
	Earnings err Share
	Price to Earnings Ratio

Question 26: Based on the assumption that a stock's intrinsic or real value is determined by the company's future earnings and cash flow

	Technical Theory
	Fundamental Theory
	Efficient Market Theory

Question 27: Based on the assumption that a stock's value is determined by the forces of supply and demand in the stock market as a whole

	Fundamental Theory
	Investment Theory
	Technical theory

Question 28: A stock's current market price reflects its true value, sometimes called the random walk theory

	Technical Theory
	Fundamental Theory
	Efficient market Theory

Question 29: Investors are optimistic, more investors are buying stock and the stock market increases

	Knight Market
	Bull Market
	Bear Market

Question 30: Pessimistic Views on economy, more investors are selling stock and so the stock market declines.

	Bear Market
	Knight Market
	Bull Market

Question 31: The additional return investors receive by investing in higher risk stocks vs. risk free investments such as treasury bonds.

	Average Return Premium
	Market risk Premium
	Market Segmentation Premium

Question 32: A market in which an investor purchases financial securities via an investment bank, or other representative, from the issuer of those securities.

	Primary Market
	Bear Market
	Bull Market
	Secondary Market

Question 33: A market for existing financial securities that are currently traded among investors

	Bull Market
	Secondary Market
	Bear Market
	Primary Market

Question 34: T/F: The Securities and exchange commission registers securities, licenses brokers, and prosecutes for stock fraud and insider trading.

	False
	N/A
	True

Question 35: Excessive buying and selling of securities to generate commissions

	Commission charges
	Churning
	Stock Brokering

Question 36: T/F: Most folks can successfully day trade due to commission costs

	True
	False
	N/A

Question 37: A Request to buy or sell stock at the current market value

	Stop order
	Discretionary order
	Limit order
	Market order

Question 38: A request to buy or sell a stock at a specified price or price range

	Stop order
	Market Order
	Discretionary Order
	Limit order

Question 39: A request to sell a stock at the next available opportunity after its market price reaches a specified amount

	Discretionary order
	Stop order
	Market order
	Limit order

Question 40: Let's the account executive decided when to execute the transaction and at what price

	Limit Order
	Market Order
	Discretionary order
	Stop order

Question 41: You must pay the dividend, sell high buy low

	Selling short
	Option Contract
	Futures contracts
	Buying on the margin

Question 42: Buy and hold, dollar cost average, direct investment and dividend investment

	Tax Considerations
	Long term techniques
	Short term techniques

Question 43: These are not recommended: Buying stock on margin, selling short, trading in options

	Tax Considerations
	Longer term techniques
	Short term techniques

Question 44: What type of fund should you buy first?

	Index
	Options
	Futures

SheKnows

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