QUESTION 1

A)

Stocks with low price/earnings ratios tend to have

		a slower earnings growth rate
		higher risks
		higher prices
		lower yields

B)

If you invest $3,600 in Dell Stock and 7 years later the stock is worth $10,300, what has been your Total Holding Period Percentage Return?

		1.86%
		6.5%
		186%
		650%

C)

If you invest $3,600 in Dell Stock and 7 years later the stock is worth $10,300, what is your average annual return?

		16.20%
		162%
		186%
		error

D)

The main motivation for buying common stocks is

		interest income
		capital appreciation
		stability of income
		stability of initial investment

E)

Relative to common stock, preferred stock:

		is similar to a bond since it has a prior and fixed claim to the assets of the corporation as compared to the common stock holder should firm bankrupcty occur
		is cheaper than common stock
		is attractive to only those looking for capital appreciation
		has higher dramatic gains