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Exam 14: Investing in Stocks and Bonds

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Question 71

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The asked price is the highest price anyone has declared he or she wants to pay for a particular security.

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Question 72

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Bonds sold by federal government entities other than the treasury are called agency bonds.

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Question 73

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Small oil exploration businesses,game companies,and genetic engineering firms are examples of speculative companies.

The dividend income on preferred stock is generally fixed and limited to a stated amount per share.

Generally the smaller the value of a stock transaction,the higher the percentage commission charged on the transaction.

The first step in selecting which bond to invest in is to look for the highest yield to maturity.

Owners of common stock vote to elect the corporation's management.

If the investor fails to put up additional cash or securities to maintain a required level of equity in a margin account,the broker will sell the securities at the market price.

The most basic form of ownership in a corporation is

The lower the payout ratio,the greater the odds that the company's earnings will sustain future dividend payments.

Beta is a ratio measure of an investment's price volatility or risk compared with a specific market index,usually for similar investments.

Which of the following is simply an estimate based on projected future earnings?

Which is not a frequently reported index?

NARRBEGIN: Figure 14-1 Figure 14-1 Rosa's is a small chain of Mexican food restaurants that features five delicious varieties of salsa.The business has grown over the past ten years from a hobby to a small corporation with 200,000 shares of common stock outstanding.The corporation has not issued any preferred stock.The following is Rosa's latest financial data: ​ -Refer to Figure 14-1.What is the price/earnings ratio for Rosa's?

Common stockholders are guaranteed dividends.

____ accounts allow the investor to purchase stock with funds borrowed from the brokerage firm.

Which of the following statements regarding the price/earnings ratio (P/E ratio) is false?​

Preferred stockholders are the first to receive extra dividends resulting from higher than expected profits.

Common stock owners typically expect to make money on stocks by receiving​

Individual junk bonds are riskier than junk bond mutual funds.