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| 1 | |
A stock that has a large number of shares outstanding and a large market value compared to other companies is considered to be: |
| | A) | Defensive stock. |
| | B) | Large-cap stock. |
| | C) | Small-cap stock. |
| | D) | Penny stock. |
| | E) | None of the above. |
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| 2 | |
A company earned $115 million during the year. This company has 20 million shares of stock outstanding in the market. What is this firm's earnings per share? |
| | A) | $5.75 per share |
| | B) | $.17 per share |
| | C) | $33.82 per share |
| | D) | $.58 per share |
| | E) | None of the above |
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| 3 | |
A company has earnings per share of $3.00 and has a price of $27. What is the PE ratio of this company? |
| | A) | 81 |
| | B) | .11 |
| | C) | 1.1 |
| | D) | 9 |
| | E) | None of the above |
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| 4 | |
Greg Webber looks at a firm's expected earnings, its financial strength, the industry it is in and other basic factors about that company to decide if it is a good investment. What theory about investing does Greg believe? |
| | A) | Fundamental analysis |
| | B) | Technical analysis |
| | C) | Efficient market theory |
| | D) | Absolute theory |
| | E) | None of the above |
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| 5 | |
Greg Webber believes that stock prices follow a random walk. He thinks that it is impossible to find stocks that consistently outperform the market as a whole. What theory about investing does Greg believe? |
| | A) | Fundamental theory |
| | B) | Technical theory |
| | C) | Efficient market theory |
| | D) | Absolute theory |
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| 6 | |
Which of the following is true about a short sale? |
| | A) | There is an extra brokerage fee for executing a short sale. |
| | B) | To make money on the transaction the price of the stock must rise significantly. |
| | C) | You get to keep any dividends earned on the stock while you have the short sale in place. |
| | D) | To make money on the transaction the price of the stock must decline. |
| | E) | All of the above are true. |
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| 7 | |
You buy preferred stock that can be retired by the company at their convenience. What type of preferred stock have you purchased? |
| | A) | Callable preferred stock |
| | B) | Convertible preferred stock |
| | C) | Cumulative preferred stock |
| | D) | Tired preferred stock |
| | E) | None of the above |
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| 8 | |
A company has $100,000,000 in assets and $40,000,000 in liabilities. It has 1,000,000 shares in the market. What is this company's book value per share? |
| | A) | $60,000,000 |
| | B) | $60 per share |
| | C) | $40 per share |
| | D) | $100 per share |
| | E) | None of the above |
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| 9 | |
A(n) _______________ is when a company issues stock to the public for the very first time. |
| | A) | Proxy |
| | B) | Initial public offering |
| | C) | Margin |
| | D) | Cumulate preferred stock |
| | E) | None of the above |
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| 10 | |
_______________ is an investment strategy where the investor buys and sells the stock in a very short period of time, generally a few hours. |
| | A) | Churning |
| | B) | Buy and hold |
| | C) | Dollar cost averaging |
| | D) | Day trading |
| | E) | None of the above |
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