1. For the purpose of security analysis, which one of the following statements concerning a

firm's successful past performance is correct?

A) It means the firm's future performance will also be successful.

B) It provides a basis for having greater confidence in management's

future performance.

C) It means the firm will experience problems in the future.

D) It provides no useful information concerning the firm's future

prospects.

2. One stock valuation model holds that the value of a share of stock is a function of its future dividends, and that the dividends will increase at an annual rate which will remain unchanged over time. This stock valuation model is known as the

A) approximate yield model.

B) holding period return model.

C) dividend reinvestment model.

D) constant growth dividend valuation model.

3. As an investment vehicle, bonds can provide income in the form of

A) current income only.

B) capital gains only.

C) both current income and capital gains.

D) neither current income nor capital gains.