If a companys stock is trading at $27 per share, and the book value of the stock is $32 per share, then the typical investor might

Multiple Choice

• demand a dividend of $5 per share.

• buy the stock.

• not buy the stock.

• buy the bonds of the company.

• None of the answers are correct.

When a corporation releases profits to its owners, this is known as

Multiple Choice

• yield.

• profit sharing.

• None of the answers are correct.

• interest.

• dividends.

Which of the following represents a stock split?

Multiple Choice

• 10 shares becomes 100 shares

• None of the answers are correct.

• 100 shares are converted into 1 bond

• 10 shares are converted into 1 bond

• 100 shares becomes 10 shares

The initial amount of money applied to an investment is called

Multiple Choice

• collateral.

• ownership.

• principal.

• dividend.

• compound interest.

If an investor invests $1000 in an investment product that yields 4% annually, if the investment is set to compound, then how much money will be the investment be worth at the beginning of the third year?

Multiple Choice

• approximately $1,400

• There is no way to determine this number with the information given.

• None of the answers are correct.

• approximately $1,040

• approximately $1,082