Finance Saving & Investing

20 Questions | By Tcarteronw | Updated: Mar 20, 2022 | Attempts: 158

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Questions and Answers

1.

A stock split occurs when the shares of stock owned by existing stockholders are divided into a larger number of shares.
- A.
  
  True
- B.
  
  False
2.

Conservative investors are attracted to small-cap stocks.
- A.
  
  True
- B.
  
  False
3.

A bear market occurs when investors are pessimistic about the economy.
- A.
  
  True
- B.
  
  False
4.

Large-cap funds include stocks of companies with assets of at least $500 million.
- A.
  
  True
- B.
  
  False
5.

To pay for a new school, a local government may issue a ______________.
- A.
  
  Stock
- B.
  
  Mutual fund
- C.
  
  Municipal bond
- D.
  
  Penny stock
6.

Government bonds have a high risk default.
- A.
  
  True
- B.
  
  False
7.

Preferred stock offers investors all the following advantages EXCEPT ___________.
- A.
  
  Dividends before common stockholders receive any
- B.
  
  A higher yield than common stock
- C.
  
  More potential growth than common stock
8.

Diversification is a key reason for buying a ______________.
- A.
  
  Corporate bond
- B.
  
  Municipal bond
- C.
  
  Treasury note
- D.
  
  Mutual fund
9.

A company that issues stock to a small group of people is a _______________.
- A.
  
  Public corporation
- B.
  
  Private corporation
- C.
  
  Sole proprietorship
- D.
  
  Partnership
10.

A company that sells its shares openly in stock markets, where anyone can buy them, is a ________.
- A.
  
  Public corporation
- B.
  
  Securities exchange
- C.
  
  Sole proprietorship
- D.
  
  Private corporation
11.

One advantage of preferred stock is ______________.
- A.
  
  Less risk than common stock
- B.
  
  Higher yield than corporate bonds
- C.
  
  Greater growth potential than common stock
12.

The _____________ is the dollar amount that the bondholder will receive at the bond's maturity.
- A.
  
  Face value
- B.
  
  Yield
- C.
  
  Premium
- D.
  
  Debt
13.

Payments that result from the sale of securities in a fund's portfolio are called ______________.
- A.
  
  Income dividends
- B.
  
  Net asset values
- C.
  
  Capital gains
- D.
  
  Shares
14.

Which of the following should be performed as part of a financial check up ___________.
- A.
  
  Balance your budget
- B.
  
  Have insurance
- C.
  
  Start an emergency fund
- D.
  
  All answers are correct
15.

Which of the following are the 5 components of risk?
- A.
  
  Inflation risk, interest rate risk, business failure, financial market, global investment
- B.
  
  Inflation risk, interest rate risk, liquidity, real estate
- C.
  
  Global investment, liquidity, real estate, bonds
- D.
  
  Inflation risk, interest rate risk, business failure, bear market
16.

Income stocks ____________.
- A.
  
  Pay high dividends
- B.
  
  Are more stable companies
- C.
  
  Are associated some company growth
- D.
  
  All answers are correct
17.

Small-cap stocks ________________.
- A.
  
  Lower investment risk
- B.
  
  Are from large corporations
- C.
  
  Are from smaller, less established companies
- D.
  
  Are from companies with capitalization of $500 million or more
18.

The market condition that occurs when investors are pessimistic about the economy and sell stock is called a __________.
- A.
  
  Bull market
- B.
  
  Bear market
- C.
  
  Total return
- D.
  
  Security
19.

The market condition that occurs when investors are optimistic about the economy and buy stock is called a __________.
- A.
  
  Bear market
- B.
  
  Bull market
- C.
  
  Economic decline
- D.
  
  Efficient market