BUS100 Final Exam || with 100% Accurate Solutions.
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Course
BUS100
Institution
BUS100
While it's invested, money grows by earning interest or yielding some other form of return. What is this known as?
A) compound growth
B) dividend
C) capital gains
D) security
E) diversity correct answers compound growth
The time it takes to double an investment can be estimated by using whi...
BUS100 Final Exam || with 100% Accurate Solutions.
While it's invested, money grows by earning interest or yielding some other form of return. What
is this known as?
A) compound growth
B) dividend
C) capital gains
D) security
E) diversity correct answers compound growth
The time it takes to double an investment can be estimated by using which of the following?
A) book value
B) the Rule of 72
C) blue-chips
D) dividends
E) market value correct answers the Rule of 72
Which of the following is the name for a portion of the ownership of a corporation?
A) Schedule C
B) stock
C) partnership
D) LLC
E) dividend correct answers stock
Which of the following statements is true about common stocks as investments?
A) Stocks are among the riskiest of all investments.
B) Stocks are most suitable for investors who seek security.
C) Stocks will never become worth less than their purchase price.
D) Stock prices reflect only government action.
E) Stock prices are easily manipulated. correct answers stocks are among the riskiest of all investments
What is a stock's market value?
A) the current price of a share of stock in the stock market
B) the average price of one share of stock over the past year
C) the face value of a share of stock, set by the issuing company's board of directors
D) the price of the stock plus the previous year's dividend
E) the monthly average of a stock's price over a year correct answers the current price of a share of stock in the stock market
Don Dillon is a 24-year-old graphic designer. He eventually wants to get married, raise a family, and buy a house. He knows that he has to start putting money away so that his goals can someday become a reality. He has heard that investing is risky because you can lose money as well as make money. So Don decides to play it safe and deposit money in a bank on a regular basis. Why might this not be his best strategy?
A) Stock investments will always result in high returns. B) It pays to take chances with your money.
C) You can actually lose money with bank savings due to inflation and taxes.
D) People usually benefit from risky investments.
E) Most savings accounts are insured by the FDIC. correct answers You can actually lose money
with bank savings due to inflation and taxes.
Which of the following statements is NOT true about dividend payments?
A) Many companies distribute between 30 and 70 percent of their profits to shareholders.
B) Some firms, especially fast-growing companies, do not pay dividends.
C) Many fast-growing companies use cash earnings for expanding the company so that future earnings can grow even faster.
D) During unprofitable years, companies are still required by law to pay dividends to their stockholders.
E) Dividend payments are made to stockholders on a per-share basis. correct answers During unprofitable years, companies are still required by law to pay dividends to their stockholders.
True /False.An exchange-traded fund (ETF) is a bundle of stocks (or bonds) that are in an index that tracks the overall movement of a market. correct answers True
True/False. Mutual funds are traded in securities markets. correct answers False
Which of the following is an advantage of ETFs over mutual funds?
A) ETFs can be traded throughout the day like a stock.
B) ETFs have high operating expenses.
C) ETFs do not require high initial investments.
D) ETFs are not regulated by the government.
E) ETFs are difficult to sell in a timely manner. correct answers ETFs can be traded throughout the day like a stock.
True/False. In a secondary securities market, new stocks and bonds are bought and sold by firms and governments. correct answers False
New stocks and bonds are sold in what market?
A) private placement market
B) secondary market
C) primary market
D) tertiary market
E) open market correct answers primary market
True/False. A stock exchange is an organization of individuals coordinated to provide an institutional auction setting in which stocks can be bought and sold. correct answers True
Which of the following is an organization of individuals coordinated to provide an institutional setting in which stock can be bought and sold?
A) stock exchange
B) brokerage C) server
D) over-the-counter market
E) commission correct answers stock exchange
True/False. The New York Stock Exchange, the world's oldest electronic stock market, has orders gathered and executed on a computer network. correct answers False
Which of the following is a requirement for a firm to be listed on the New York Stock Exchange?
A) headquarters in New York
B) total value of outstanding stock
C) industry in which the company operates
D) minimum number of shares of stock
E) global operations correct answers total value of outstanding stock
Which of the following is the federal government agency that regulates U.S. securities markets?
A) New York Stock Exchange
B) Federal Reserve
C) Commerce Department
D) Securities and Exchange Commission
E) Treasury Department correct answers Securities and Exchange Commission
Which of the following is an electronic securities exchange?
A) Pacific Stock Exchange
B) NASDAQ
C) Osaka Securities Exchange
D) Securities and Exchange Commission
E) Europa correct answers NASDAQ
True/False. Stock brokers earn commissions from the individuals and organizations for whom they place orders. correct answers True
Lito is working with a discount broker. Which service would Lito NOT be likely to receive?
A) stock research
B) industry analysis
C) face-to-face consultations
D) screening for specific types of stocks
E) quality suggestions for investments correct answers face-to-face consultations
True/False. An investment bank is a financial institution that specializes in issuing and reselling new securities. correct answers True
True/False. An investment bank operates in the secondary securities market. correct answers False True/False. When an investment bank engages in underwriting, that investment bank is taking on
risk in the process of launching new securities. correct answers True
True/False. Although advising and underwriting may be tasks of an investment bank, distribution
of new securities is NOT one of their services. correct answers False
Which of the following is a function performed by an investment bank?
A) handling a client's portfolio in the secondary market
B) establishing relationships for a client with a commercial bank
C) underwriting purchases of stocks and bonds
D) arranging travel abroad for purchasers of foreign currencies
E) providing insurance services for clients correct answers underwriting purchases of stocks and bonds
The profit realized when the market value of an investment increases is known as which of the following?
A) capital gains
B) asset allocation C) diversification
D) price appreciation
E) profiteering correct answers capital gains
If you purchased a share of GE stock for $33.82, then sold it one year later for $36.50, what would the price appreciation be? correct answers $2.68
True/False. Aggressive growth funds are designed for investors who can accept the risk of loss inherent in common stock investing with severe price fluctuations, but also the potential for superior returns over time. correct answers True
Hugh is an investor who opts for no-risk U.S. Treasury Bills and intermediate-term high-grade corporate bonds. What kind of investor is Hugh?
A) professional
B) aggressive
C) amateur
D) conservative
E) sporadic correct answers conservative
What is the term for buying several different kinds of investments rather than just one?
A) spreading
B) shorting
C) margin buying
D) diversification
E) management correct answers diversification
Javier wants to invest, but wants to reduce his risk of loss by spreading the total investment across more stocks. Javier would be MOST interested in which of the following?
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