# Team 11 Presentation On Technology Stocks

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Please answer the following questions from the presentation by IS 460 Team 11 Spring 2009.

• 1.

### Which of the following are key indicators for tech stocks?  Choose all that apply.

• A.

Stock Price

• B.

Random guessing by choosing from a hat

• C.

EPS

• D.

ROE

• E.

P/E Ratio

A. Stock Price
C. EPS
D. ROE
E. P/E Ratio
Explanation
The key indicators for tech stocks include Stock Price, EPS (Earnings Per Share), ROE (Return on Equity), and P/E Ratio (Price-to-Earnings Ratio). These indicators are important in assessing the financial performance and valuation of tech companies. Stock Price reflects the market value of a company's shares, EPS measures its profitability, ROE indicates the return generated on shareholders' equity, and P/E Ratio compares the stock price to its earnings per share. Random guessing by choosing from a hat is not a relevant indicator for tech stocks.

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• 2.

### Earnings Per Share is defined as what?

• A.

Distribution of company's profits to shareholders

• B.

Showing the value of stock price compared to earnings

• C.

Amount of profit allocated to each share of common stock

• D.

How much money someone makes by keeping money under their bed

C. Amount of profit allocated to each share of common stock
Explanation
Earnings Per Share (EPS) is a financial metric that represents the portion of a company's profit that is allocated to each outstanding share of common stock. It is calculated by dividing the net income of the company by the total number of outstanding shares. EPS is an important indicator for investors as it helps them evaluate the profitability and performance of a company on a per-share basis. This metric allows investors to compare the earnings potential of different companies and make informed investment decisions.

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• 3.

### Which of the following is NOT a tech industry as mentioned in the powerpoint?

• A.

High End Electronics

• B.

Personal Computing

• C.

Application Software

• D.

Diversified Computer Systems

A. High End Electronics
Explanation
The question asks for a tech industry that is NOT mentioned in the PowerPoint. The PowerPoint mentions Personal Computing, Application Software, and Diversified Computer Systems as tech industries. However, High End Electronics is not mentioned as a tech industry in the PowerPoint. Therefore, High End Electronics is the correct answer.

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• 4.

### In the semi-conductor industry, which two companies did we compare?

• A.

Intel

• B.

Nokia

• C.

AMD

• D.

Nvidia

A. Intel
C. AMD
Explanation
The question asks which two companies were compared in the semiconductor industry. The correct answer is Intel and AMD. This suggests that the question is asking about a comparison between these two companies specifically in the context of the semiconductor industry.

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• 5.

### True or False, innovation will continue to spur the technology sector, thus allowing tech stocks to flourish.

• A.

True

• B.

False

A. True
Explanation
Innovation is a driving force in the technology sector, constantly introducing new products, services, and advancements. This constant evolution and progress in technology create opportunities for tech stocks to thrive. As long as innovation continues to occur, the technology sector will continue to grow, making the statement "innovation will continue to spur the technology sector, thus allowing tech stocks to flourish" true.

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• 6.

### According to the powerpoint, which company we compared offers the highest dividend?

• A.

SAP

• B.

HP

• C.

Intel

• D.

Microsoft

C. Intel
Explanation
According to the powerpoint, Intel offers the highest dividend compared to SAP, HP, and Microsoft.

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• 7.

### According to the powerpoint, which company we compared has the highest EPS?

• A.

Apple

• B.

AMD

• C.

Netgear

• D.

Dell

A. Apple
Explanation
The PowerPoint presentation mentioned a comparison of companies and their EPS (Earnings Per Share). Among the given options, Apple is the company with the highest EPS.

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• 8.

### Which of these is a common investor mistake?

• A.

• B.

Making too much money

• C.

• D.

Explanation
Buying high, selling low is a common investor mistake because it goes against the basic principle of investing, which is to buy low and sell high. When investors panic and sell their investments during a market downturn, they often end up selling at a loss. Conversely, when they buy investments when prices are already high, they may not be able to achieve significant returns. This mistake is driven by emotions and a lack of discipline in following a long-term investment strategy.

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• 9.

### Which of these technology mutual funds was not mentioned in the powerpoint?

• A.

Berkshire Focus Fund

• B.

Fidelity Select Network and Infrastructure Fund

• C.

Seligman Communications and Information Fund

• D.

Goldman Sachs Tollkeeper Fund

C. Seligman Communications and Information Fund
Explanation
The correct answer is Seligman Communications and Information Fund. This fund was not mentioned in the PowerPoint presentation.

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• 10.

### What are three companies that don't offer dividends?

• A.

Cisco

• B.

Dell

• C.

HP

• D.

Oracle

• E.

Netgear

A. Cisco
B. Dell
E. Netgear
Explanation
Cisco, Dell, and Netgear are three companies that do not offer dividends. Dividends are a portion of a company's profits that are distributed to its shareholders. However, these three companies have chosen not to distribute profits in the form of dividends to their shareholders. This could be due to various reasons such as reinvesting profits back into the company for growth, focusing on other forms of shareholder value creation, or simply not having a consistent history of generating substantial profits to distribute as dividends.

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• 11.

### In general, what is the advice on technology stocks?

• A.

• B.

Sell

• C.

Hold

Explanation

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• 12.

### When deciding whether to buy or not, which of the following are things you should do?

• A.

Make sure you have enough cash in your portfolio

• B.

Evaluate the stock opportunity

• C.

• D.

Research the stock

A. Make sure you have enough cash in your portfolio
B. Evaluate the stock opportunity
D. Research the stock
Explanation
When deciding whether to buy or not, it is important to consider multiple factors. Firstly, ensuring that you have enough cash in your portfolio is crucial as it determines your ability to make the purchase. Evaluating the stock opportunity allows you to assess the potential profitability and risks associated with the investment. Lastly, conducting thorough research on the stock helps you make an informed decision by analyzing its performance, financials, and market trends. Acting on insider trading is illegal and unethical, and therefore should not be considered as a valid step in the decision-making process.

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• 13.

### Which company is used in the powerpoint for the buying high selling low example?

• A.

AIG

• B.

Amazon

• C.

Ebay

• D.

Bank of America

B. Amazon
Explanation
Amazon is used in the powerpoint for the buying high selling low example. This suggests that the example revolves around the concept of buying a product at a higher price and then selling it at a lower price, possibly resulting in a loss.

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• 14.

### Which of the following is NOT a good investor resource?

• A.

Yahoo Finance

• B.

Morningstar

• C.

Investopedia

• D.

CNN Money

• E.

Wikipedia

E. Wikipedia
Explanation
Wikipedia is not a good investor resource because it is an open-source platform where anyone can edit and contribute information, making it less reliable and accurate compared to other sources. While Wikipedia can provide a general overview of a topic, it is not a trusted source for in-depth financial information or investment advice. Investors should rely on more reputable sources like Yahoo Finance, Morningstar, Investopedia, or CNN Money for reliable and accurate financial information.

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• 15.

### How is Return on Equity calculated?

• A.

Net income / shareholder's equity

• B.

(Net income - Diviends on preferred stock) / Average outstanding shares

• C.

Market value per share / Earnings per share

• D.

(Net profit * Average shares outstanding) / Dividend yield

A. Net income / shareholder's equity
Explanation
Return on Equity (ROE) is a financial ratio that measures a company's profitability and the efficiency with which it utilizes its shareholders' equity. It is calculated by dividing the net income of the company by its shareholder's equity. ROE indicates how much profit a company generates for each dollar of shareholder's equity invested. A higher ROE signifies that the company is using its equity effectively to generate profits.

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• Nov 14, 2023
Quiz Edited by
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• Apr 27, 2009
Quiz Created by
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