35) Christopher Pratt just bougha shares af common stock. Which one of the following is he. eatitled to bassed oq his ownerilip of these shares? A) Semiannal iotcrest payments B) Guaranteed anemal dividends C) Risht to vote at antual meeting D) Right ta dectare a stock split E) Right to declare fitute dividesds 36) James Green jost bought a srock which he expects will provide him with a quarterly cabh payment, although that payment is not gaumanteed. In fact, be expects the armount of the paymetit to vary over time. What type of payment is be expecting to receive? A) Optioa premitum B) laterest C) Capital gais D) Dividend E) Rebate 37) Valerie Kilmer owns stock in the Williams Widget Company. She was just advised that in the near fature she will be rectiving two shares for every one share she owns today. What has the company declared that will cause lhis change to her shares? A) Extra dividend B) Capital gains distribution C) Stock split D) Stock repurchasc E) Stock conversion 38) Beverly Frickel purchased 100 shares of Gleason Systems stock for $32.50 per share- Her conimission for this purchise was 525 . She sold the stock two years later for $45 per shate and a cammission of 540 . What was Beverly's total dollar refurn on this stock? A) 51,100 B) $1,185 (C) 51,500 D) 53275 E) $4,460 39) Amell Johnson bought 200 shares of Black Petroleum Company for $100 per share and paid a commission of $50. He sold the stock five years later for $125 per share and paid $65 commission. While he held the stock, it paid a dividend of $4.00 per share. What was Amell's total dollar return on this stock? A) $24,900 B) $20,000 C) $5,800 D) $5,700 E) $5,685 40) To finance their business activities, many corporations prefer selling common stock because: A) it does not have to be repaid until 10 to 15 years after it has been issued. B) interest payments to stockholders are lower than interest paid to a bank. C) common shareholders have no voting rights. D) interest paid to stockholders is tax deductible. E) the money obtained from stockholders does not have to be repaid. 41) Common stock dividends are paid out of profits and: A) must be approved by the corporation's board of directors. B) are guaranteed to be paid quarterly. C) are paid prior to the firm's taxes. D) are usually paid semiannually. E) equal 100 percent of the firm's annual earnings. 42) Which one of the following statements is true? A) Corporate dividends for common stock must be paid in cash only. B) Stockholders must elect the board of directors. C) The selling price of stock is determined by how much the corporation is willing to receive. D) Corporations are required by law to have two stockholder meetings each year. E) Stockholders may vote only by proxy. 43) Patsy Banz owns 200 shares of a stock. For the last calendar quarter, the company paid a dividend of $0.45 a share. What is the total amount she received in her dividend check for this quarter? A) $0.45 B) $45.00 C) $100.00 D) $90.00 E) $200.00 44) If the board of directors approves a two-for-one stock split, an investor who owns 125 shares before the split will own shares after the split. A) 75 B) 125 C) 225 D) 250 E) 450 45) When a stock splits two-for-one, you should expect the price per share to: A) decrease to half its pre-split price. B) decrease in value by 75 percent or more. C) remain unchanged. D) increase to more than twice its pre-split price. E) increase to twice its pre-split price. 46) A safe investment that generally attracts conservative investors is called a stock. A) penny B) cyclical C) growth D) small cap E) blue chip 47) Anthony Edwards wants to diversify his portfolio by adding a stock that maintains stable earnings when the economy declines. What type of stock does Anthony want to add to his portfolio? A) Defensive stock B) Cyclical stock C) Small cap stock D) Blue chip stock E) Growth stock 48) Mellon Manufacturing has after-tax income of $6 million. It also has 4 million shares of stock outstanding. What is the corporation's earnings per share? A) $3.00 B) $2.00 C) $1.50 D) $0.67 E) $0.75 49) Last year, High-Tech Electronics earned $2.00 per share. If a share of its stock is selling for $60, what is the firm's P-E ratio? A) 0.03 B) 2 C) 30 D) 33 E) 60 50) Acme Widget, Inc, has one million shares of common stock outstanding at a price per share of $62.50. The company earned $6 million after taxes. The annunl dividend is $2.50 per share. The company has assets of $250,000,000 and liabilities of $50,000,000. What is the dividend yield? A) 1 percent B) 2 percent C) 3 percent D) 4 percent E) 5 percent 51) ABC Corporation has assets that total $24 million and liabilities that total $8 million. It also has 1,000,000 shares of stock outstanding. What is the ABC's book value per share? A) $32 B) $24 C) $16 D) $8 E) $0 52) A market in which an investor purchases financial securities from the issuer of those securities using an investment bank or other representative is called the market. A) technical B) fundamental C) efficient D) secondary E) primary 53) A market for existing financial securities that are currently traded among investors is called the market. A) technical B) fundamental C) efficient D) secondary E) primary 54) Which of the following is an electronic marketplace for buying and selling global stocks and securities? A) New York Stock Exchange B) Over-the-counter market C) NASDAQ D) Tokyo foreign securities exchange E) London foreign securities exchange 55) Jennifer Fritz is thinking about purchasing the stock of the Sunshine Corporation at the current market price. What type of order should she place? A) Market order B) Limit order C) Stop order D) Discretionary order E) Common order 56) Ashley Riley wants to buy the stock of XYZ Company at a specified price or better. What type of order should she place? A) Market order B) Limit order C) Stop order D) Discretionary order E) Common order 57) Carol Fisher wants to sell the stock of Hathaway International at the next available price after the market price reaches $50 per share. What type of order should she place? A) Market order B) Limit order C) Stop order D) Discretionary order E) Common order 58) A long-term technique used by investors who purchase an equal dollar amount of the same stock at equal intervals in time is called: A) dollar cost averaging. B) dividend reinvestment plan. C) buy and hold technique. D) regulated transaction. E) secured transaction. 64) Because of the added security of collateral, the interest rates on bonds are usually lower than interest rates on unsecured debenture bonds. A) debenture B) mortgage C) indenture D) preemptive E) subordinated debenture 65) A call feature: A) allows bondholders to convert their bond to a specified number of shares of common stock. B) is not available on corporate bonds. C) allows the corporation to buy outstanding bonds from current bondholders before the maturity date. D) is only available with government securities. E) is guaranteed by the corporation. 66) Which of the following can be purchased through Treasury Direct at www,treasurydirect,gov? A) TIPS B) Treasury bills C) Treasury notes D) Treasury bonds E) All of these 67) You are a taxpayer in the 24 percent tax bracket and you own a tax-exempt bond that pays 6 percent. What is your taxable equivalent yield? A) 5.00 percent B) 6.00 percent C) 7.89 percent D) 7.20 percent E) 14.40 percent 68) If a bond is quoted in the newspaper at 96 , the current price of a $1,000 face value bond is: A) $9.60. B) $96.00. C) $960.00. D) $1,000.00. E) $1,096.00. 69) High-yield (junk) bonds are sold by companies: A) with a poor earnings history. B) with a questionable credit record. C) with lower ratings by major rating services. D) that are newer and have unproven ability to increase sales and eam profits. E) All of these 70) A mutual fund whose shares are issued and redeemed by the investment company at the request of investors is called a A) closed-end B) open-end C) load D) no-load E) convertible 71) The current market value of a mutual fund's portolio minus the mutual fund's liabilities equals a figure, that when divided by the number of shares outstanding, results in the: A) book value. B) outstanding balance. C) LIBOR rate. D) net asset value. E) accounting value. 72) Mary Cooper just purchased 100 shares in the All-American Fund. The purchase cost for each share was $10. If this fund charges a 3 percent load, what is the total amount of commission she will pay the investment company? A) $30 B) $100 C) $230 D) $300 E) $500 73) A fee that some investment companies charge for distributing and marketing a mutual fund is called a: A) 14A1fee. B) 12b1fee. C) 182 fee. D) 403 fee. E) 401fee