Chaminade MBA754 quiz 6

August 15th, 2017

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True

False

Question 2.2.The total-return approach concentrates solely on capital gains over the long-term. (Points : 1)

True
False

Question 3.3.Which strategy applies to investors who fund long-term goals with high-quality stocks which they retain for the entire investment period? (Points : 1)

quality long-term growth
buy and hold
speculation
current income

Question 4.4.American Depositary Receipts (ADRs) are issued against shares of U.S. corporations and are traded on foreign security exchanges. (Points : 1)

True
False

Question 5.5.Income stocks are well suited for retirees because (Points : 1)

dividend income is tax-free.
the capital gains are predictable.
dividend yields tend to exceed bond yields.
dividends tend to increase over time.

Question 6.6.The value that investors place on a stock is called its (Points : 1)

book value.
investment value.
liquidation value.
par value.

Question 7.7.Aggressive stock management (Points : 1)

is the riskiest of all the investment strategies.
involves active stock trading in the short-term in the quest for capital gains.
concentrates on the long-term growth aspects of a security.
concentrates on high dividend yielding stocks.

Question 8.8.While many stocks increase in value over the long run, most of the return on stocks comes from dividends. (Points : 1)

True
False

Question 9.9.The par or stated value of common stock is important for (Points : 1)

accounting purposes only.
helping the investor determine the stocks intrinsic value.
helping the board of directors determine the dividend payout.
helping the market determine the trading price of the stock.

Question 10.10.Rob owns 300 shares of Blackwood common stock valued at $9 a share. Blackwood has declared a 3-for-1 stock split effective tomorrow. After the split, Rob will own (Points : 1)

100 shares valued at about $27 a share.
100 shares valued at about $3 a share.
900 shares valued at about $27 a share.
900 shares valued at about $3 a share.

Question 11.11.A market correction is defined as a stock market decline of 5% or more. (Points : 1)

True
False

Question 12.12.Stocks whose prices are expected to remain stable, or even prosper, when economic activity is slowing down are known as (Points : 1)

defensive stocks.
cyclical stocks.
reversible stocks.
speculative stocks.

Question 13.13.Treasury stock is a means of increasing the number of shares outstanding. (Points : 1)

True
False

Question 14.14.Every shareholder is a part owner of the firm and, as such, has a direct claim on a portion of the firms assets. (Points : 1)

True
False

Question 15.15.With respect to dividend payments on stocks, the date of record is the date on which the payment is actually paid. (Points : 1)

True
False

Question 16.16.The decision of how much money to pay out in dividends is made by the (Points : 1)

board of directors.
company shareholders.
chief executive officer.
chief financial officer.

Question 17.17.When a company, working with an underwriter, offers the investing public a certain number of shares of its stock at a certain price, the company is making what is known as a (Points : 1)

public offering.
rights offering.
stock spin-off.
treasury offering.

Question 18.18.Mid-cap stocks are generally classified as those with a market capitalization between $1 and $5 billion. (Points : 1)

True
False

Question 19.19.Assume the Plum Corporation has two different issues of common stock. One issue carries voting rights, and the other issue does not. In this situation, Plum is said to have issued (Points : 1)

buy-back stock.
treasury stock.
OTC stock.
classified stock.

Question 20.20.Which one of the following statements about common stock is true? (Points : 1)

Common stock can provide attractive capital appreciation opportunities.
Dividends generally provide the greatest rate of return on common stocks.
Common stocks generally have a negative rate of return over a ten-year period.
The DJIA is the best indicator of the overall performance of common stocks.

Question 21.21.The technology bubble of the 1990s lasted about 18 months. (Points : 1)

True
False

Question 22.22.The value of a stock distribution is considered taxable income at the time of the distribution. (Points : 1)

True
False

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