BA250 Test 3 A+ 100% Guranteed!!! - 2252

Solution Detail
Price: $8.00
  • From: Business,
  • Posted on: Sun 18 Mar, 2012
  • Request id: None
  • Purchased: 1 time(s)
  • Average Rating: No rating
Request Description

1. Karyn wants to evaluate some bonds she is contemplating buying.In order to adequately evaluate them, she should check the bond yield, read the bond quotes in a paper, and check the ________.
A) par value
B) company rating
C) bond rating
D) interest rate
E) company's performance

2. Darwin Short has a high risk tolerance and goes for earning a 24% return on his money. He has learned from the rule of 72 that a dollar will double in just three years at this rate. So, if he puts money into selected investments every month for 30 years, he will have a bundle! Darwin is now 25 and wants to retire at age 55 as an independently wealthy man who can travel with his wife, children, and friends, and enjoy the finer things in life.Darwin should keep in mind that when it comes to taxes, ________ is (are) better than ________. He should keep in mind investing on a ________ deferred basis.
A) income; capital gains; income
B) marginal rates; income; dividend
C) tax shelters; capital gains; tax shelter
D) tax-free investments; tax deferred; retirement
E) capital gains; income; tax

3. Delores Watts has just read a book and three articles on the stock market to become more effective when investing. What can she say about the efficiency of the stock market?
A) It is efficient in degrees.
B) It is efficient.
C) It is more myth than fiction.
D) It is not efficient.
E) It cannot be predicted

4. Greg Jewell read about several companies that were performing well during the current recession. He contemplated investing in them because their stocks are ________. Defensive stocks tend to do well even in a recession. See Lesson 6. Lesson Objective: Describe the purpose, process and risk in investing in stocks, bonds, and mutual funds.
A) defensive
B) growth
C) cyclical
D) seasonal
E) speculative

5. The two types of securities offerings in the primary markets are ________ and ________.
A) seasoned new issues; long-term bonds
B) long-term bonds; government bills and notes
C) initial public offerings; seasoned old issues
D) initial public offerings; seasoned new issues
E) seasoned new issues; penny stocks

6. As a young college graduate, your biggest investment ally is ________.
A) time
B) leverage
C) the class of investments
D) the amount of investment
E) tax-free investments

7. You and your spouse have decided to incorporate bonds into your newly formed retirement portfolio. You will most likely purchase them through a(n)________.
A) bond dealer
B) discount broker
C) investment banker
D) bond exchange
E) full-service broker

8. Judy invests in mutual funds. To either pay no commission or pay one when she liquidates her holdings, she would want a ________ or a ________.
A) front-load fund; load fund
B) no-load fund; load fund
C) front-load fund; no-load fund
D) load fund; back-load fund
E) no-load fund; back-load fund

9. Marcel Gravits wants to invest in stocks so as to even out his luck by letting the highs and lows cancel each other out. He will accomplish this by purchasing a fixed ________ of stock at specified intervals, known as ________.
A) industry grouping; price control
B) valuation; dollar cost averaging
C) pricing; price averaging
D) valuation; group purchase
E) dollar amount; dollar cost averaging

10. Nathan, Michael, and Neal Murphy are brothers. Nathan and Michael are both in college and Neal is a senior in high school. They have learned the value of work and saving their money. However, they did not listen to their Mom and Dad's talk about careers until just recently. The two older young men can see that the job market will be ever-changing in the future and that the stability of a retirement plan with one company will be nonexistent. Nathan and Michael are studying the basics of investing and are about ready to make a move on a small scale. The younger brother will benefit from their knowledge and experience. They want to start a life-long habit of investing in stocks, especially common stocks.Neal wants to judge the performance of prospective stock by using the dividend yield. He can calculate this by dividing the annual dividends by the ________.
A) change in stock price over the year
B) growth of the stock
C) market price of the stock
D) price to earnings ratio
E) cost of the stock per share

11. ________ are a company's distribution of its profits in the form of cash or stock to its shareholders.
A) Distributions
B) Dividends
C) Shareholder distributions
D) Equity payments
E) none of the above

12. Adrian Barbeaux is a divorced woman of 32. She has been making a living for the last two years as a singer. As of yet she has not made a recording or appeared on television. She has the talent and someday plans to be a singing star/recording artist. In the meantime, she has little savings, no retirement plan, and a meager amount of investment savvy. Adrian wants to make up for lost time by putting money into sound, aggressive, high-return investments at the lowest possible cost. She wants to go for the longterm in stocks and bonds.In order to hold costs down, Adrian can ________ a discretionary account.
A) open
B) limit
C) stop
D) avoid
E) none of the above

13. Some financial advisors suggest that if you are having trouble starting up your investment program, pick ________ months per year to cut back on your spending and make those your investment months.
A) 5
B) 4
C) 3
D) 2
E) 1

14. Specialized Bikes, Inc. has an issue of preferred stock that pays an annual dividend of $5.00. Investors require a 10% percent rate of return on this stock. How much would the price of the preferred stock change if the required return dropped to 8%?
A) $12.50
B) $50.00
C) $62.50
D) $10.25
E) none of the above

15. While studying the chapter on investments in Personal Finance, Becky Hargrith found out that the ________ consists of the real risk-free rate of return and risk premiums for inflation, default, maturity, and liquidity.
A) adjusted rate
B) real interest rate
C) nominal or quoted interest rate
D) long-term rate of return
E) real rate of return

16. What is the major advantage and disadvantage of registering your trade in the "street" name?
A) more convenient to sell; miss a sale
B) convenience; takes too long
C) less paperwork; too costly
D) more convenient to sell; be charged a maintenance fee
E) less expensive; too much red tape

17. According to the chapter on investing in your textbook, which of the following was not a source of information on investments mentioned?
A) Value Line
B) business section of local newspaper
C) Wall Street Journal
D) corporate annual reports
E) brokerage firm's security analysts' research reports

18. Historical rates of return place ________ at the high end and ________ at the lower end.
A) common stocks; long-term corporate bonds
B) long-term corporate bonds; T-Bills
C) long-term corporate bonds; long-term government bonds
D) common stocks; long-term government bonds
E) common stocks; T-Bills

19. You are in the process of asset allocation during your "Early Years." You have $50,000 to invest. According to your textbook, how should that be allocated?
A) $30,000 bonds, $20,000 stocks
B) $10,000 bonds, $40,000 stocks
C) $20,000 bonds, $30,000 stocks
D) $40,000 bonds, $10,000 stocks
E) all in stocks

20. HomeTech just reported net income of $6 million, and has 2 million shares outstanding. What is HomeTech's earnings per share?
A) $4.00
B) $2.00
C) $3.00
D) $1.00
E) none of the above

21. Joe has a high risk tolerance and goes for earning a 24 % return on his money. He has learned from the rule of 72 that a dollar will triple in just three years at this rate. He is 25 and wants to retire at age 55 as an independently wealthy man. The only way he can reach this level of return is to invest in ________.
A) stocks
B) a combination portfolio
C) long-term corporate bonds
D) gold, silver, and other speculation
E) none of the above

22. Paul wants to know which common stock feature/right allows him to share in the company earnings after the creditors are paid.
A) limited liability
B) claim on income
C) paying dividends
D) claims on assets
E) dividend yield

23. Joey has learned that corporate investments can fail. As a result, they have a higher return attached to them, called ________, to compensate investors for taking on the risk of failure.
A) inflation risk premium
B) liquidity risk
C) maturity risk premium
D) the risk-return trade off
E) default risk premium

24. You hold in your hands a legal document that provides the specific terms of the loan agreement, including a description of the bond, as well as the rights of the bondholder. You have a(n) ________.
A) bond signatory
B) agency contract
C) signatory contract
D) indenture
E) none of the above

25. The largest single player and payer in the bond market is ________.
A) foreign firms
B) corporate America
C) municipal bond issuers
D) the U.S. government
E) schools and county governments
 

 

 

 

Solution Description

 

1. Karyn wants to evaluate some bonds she is contemplating buying.In order to adequately evaluate them, she should check the bond yield, read the bond quotes in a paper, and check the ________.
A) par value
B) company rating
C) bond rating
D) interest rate
E) company's performance

2. Darwin Short has a high risk tolerance and goes for earning a 24% return on his money. He has learned from the rule of 72 that a dollar will double in just three years at this rate. So, if he puts money into selected investments every month for 30 years, he will have a bundle! Darwin is now 25 and wants to retire at age 55 as an independently wealthy man who can travel with his wife, children, and friends, and enjoy the finer things in life.Darwin should keep in mind that when it comes to taxes, ________ is (are) better than ________. He should keep in mind investing on a ________ deferred basis.
A) income; capital gains; income
B) marginal rates; income; dividend
C) tax shelters; capital gains; tax shelter
D) tax-free investments; tax deferred; retirement
E) capital gains; income; tax

3. Delores Watts has just read a book and three articles on the stock market to become more effective when investing. What can she say about the efficiency of the stock market?
A) It is efficient in degrees.
B) It is efficient.
C) It is more myth than fiction.
D) It is not efficient.
E) It cannot be predicted

4. Greg Jewell read about several companies that were performing well during the current recession. He contemplated investing in them because their stocks are ________. Defensive stocks tend to do well even in a recession. See Lesson 6. Lesson Objective: Describe the purpose, process and risk in investing in stocks, bonds, and mutual funds.
A) defensive
B) growth
C) cyclical
D) seasonal
E) speculative