FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 19: Using Securities Markets for Financing and Investing Opportunities

Show Answer

Share

---

All types

Filters

Study Flashcards

Question 151

Multiple Choice

Review LaterAdd Note

Review Later

Which of the following securities are historically considered high quality and usually pay dividends?

A) Dollar stocks
B) Growth stocks
C) Preferred stocks
D) Blue chip stocks

E) A) and B)
F) C) and D)

Correct Answer

verified

Show Answer

Question 152

True/False

Review LaterAdd Note

Review Later

Penny stocks represent a high-risk stock investment.

A) True
B) False

Correct Answer

verified

Show Answer

Question 153

True/False

Review LaterAdd Note

A bond sold with a sinking fund provision requires the firm to allow a stockholder to exchange his/her bond for a specified number of shares of common stock.

In the securities markets, capital gains take place when:

The Securities and Exchange Commission has accused Martha of benefiting unfairly from information secured from a corporate officer of Stewart Engineering. Because Martha used that information to profit in the stock market, she faces ________ charges.

Similar to bond investments, preferred shares can be _________, meaning the firm may buy them back.

As a legal contract, bonds issued by different companies carry the same level of risk.

___________ are the firm's after tax profits that are distributed to stockholders.

Exchange traded funds are like mutual funds because these funds permit the investor to buy shares of a collection of several stocks or shares of a collection of stocks and bonds, but, unlike mutual funds, they are traded during the day on the exchanges.

Ken owns 100 shares in XYZ Company, currently selling for $60 per share. His stock split yesterday 3-for-1. The number of shares that Ken owns has tripled.

Which of the following accurately describes an advantage of selling bonds to raise long-term capital?

Maggie owns 10% or 50,000 common shares of a small biotech company. Although she has enjoyed a lot of control, Maggie realizes that in order for the firm to acquire the funds to grow in a recessionary economy, it will need to issue more stock. Unless she and others exercise preemptive rights,

Many stock market analysts suggest that program trading was a big cause of the stock market crash of 1987.

When investing in mutual funds, the investor will buy shares of a fund that consists of stocks or bonds; the fund will hold shares of many companies.

Which of the following federal government agencies has responsibility for regulating the various stock exchanges in the U.S.?

The Dow Jones Industrial Average reflects the daily average price of all the stocks traded on the New York Stock Exchange.

Buying stock on margin allows an investor to borrow funds from the brokerage company as part of the transaction. This __________ the potential return to the investor and ___________ the risk.

By issuing bonds with a ________, the corporation retains the right to pay off the bond prior to the maturity date.

If an individual investor places a limit order at $38 and the stock currently sells for $41 per share, the broker will buy the stock for the investor.

Ebony Enterprises decides to pay off its bonds several years before the maturity date. Apparently, the bonds ______________.