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- 1. Multiple ChoiceStocks represent ownership in a corporation.TRUEFALSE
- 2. Multiple ChoicePeople who invest in stocks cannot lose their money.TRUEFALSE
- 3. Multiple ChoiceMark bought 100 shares of Intel stock. Each share sold for $35.50. If no fees were involved, Mark paid $3,550 for the shares.TRUEFALSE
- 4. Multiple ChoiceThe price people pay for a stock is called a dividend.TRUEFALSE
- 5. Multiple ChoicePeople who own stocks are guaranteed a return on the money they have invested in stocks.TRUEFALSE
- 6. Multiple ChoiceThe only way stockholders make money is through dividend payments while they own the stock.TRUEFALSE
- 7. Multiple ChoiceOne way stockholders make money is by selling their stock for more money than they paid for it.TRUEFALSE
- 8. Multiple ChoiceStockholders can reduce the risk on their stock investment by diversifying their portfolios.TRUEFALSE
- 9. Multiple ChoiceThe New York Stock Exchange is the only place where people can buy and sell stocks.TRUEFALSE
- 10. Multiple ChoiceWhich of the following is the LEAST risky investment?corporate bondsstocksU.S. Treasury bondsmutual funds
- 11. Multiple ChoiceA bond's interest rate is also called itspar valuecoupon rateface valueprincipal
- 12. Multiple ChoiceA zero-coupon bonds pays interestperiodicallyat the maturity dateat the time of purchasenever
- 13. Multiple ChoiceWhy would someone buy a bond instead of a stock?It is a less risky investmentIt can yield a higher return on investmentTo have ownership in a companyTo receive dividend payments
- 14. Multiple ChoiceWhat is a bond?a certificate of ownership in a corporation, with the right to a share of the earningsa certificate representing a loan from an investor to a corporation or government entitya payment from an investor to a corporation for the rights to future profitsa group of stocks sold together for a set price
- 15. Multiple ChoiceA bond that pays all of its interest and principal at the bond’s maturity date is called aa zero-coupon bonda bond funda coupon bonda par-value bond
- 16. Multiple ChoiceAll of the following are reasons to buy bonds exceptbonds may outperform the stock market during certain periods of time.bonds generally have outperformed the stock market over the last 100 years.bonds pay out interest at set intervals, allowing people to live off the income.investing in bonds may generate less tax liability than investing in stocks.
- 17. Multiple ChoiceOn the bond market, a bond trading at a HIGHER price than its par value is called aDiscount bondPremium bondLow-cost bondMark-up bond
- 18. Multiple ChoiceWhat is a bond's coupon?The value of a bond at its issue dateThe value of a bond at its maturity dateThe rate of interest to be paid by the bond issuerThe purchase price of a bond
- 19. Multiple ChoicePeople buy stocks because...they expect to earn a returnthere is no chance of a lossthey are guaranteed interest payments each yearthe government encourages them to buy stock
- 20. Multiple ChoiceWhen stockholders sell their stock, who receives the money from the sale?The CorporationThe stockholderThe governmentStockholders who own the same stock
- 21. Multiple ChoiceOne way people can earn money from stocks is by...selling the stock for the same price as the price they paid for the stock.buying stock from an investment bankerselling the stock for a lower price than the price they paid for the stock.selling the stock for a higher price than the price they paid for the stock
- 22. Multiple ChoiceWhat is a stock dividend?the price the stock is sold fora capital gainpart of a company's profits that is paid to ownersthe price paid when stock is sold to an investment bank
- 23. Multiple ChoiceWhen people buy stock on a stock market (e.g. secondary market)...the corporation loses moneythe people selling the stock receive the moneythe corporation receives the moneythe people buying the stock receive the money
- 24. Multiple ChoiceDiversifying can occur by...buying similar stocks and bonds in different industriesbuying different stocks and bonds in the same industriesbuying similar stocks and bonds in the same industriesbuying different stocks and bonds in different industries
- 25. Multiple ChoiceCorporations can raise money for their corporation by working with investment bankers to issue stock.TRUEFALSE
- 26. Multiple ChoiceWhen you purchase stock, you are guaranteed a dividend from the company you purchased stock fromTRUEFALSE
- 27. Multiple ChoiceA stock portfolio is...The document that you receive for purchasing stock.The online tool used to track stock prices.A list of all the stocks you ownA group of stocks that you can purchase at one time on a stock exchange.
- 28. Multiple ChoiceWhy would someone choose to put money in stocks as opposed to a savings account that earns interest? (Choose the best answer)They are guaranteed a return in a savings accountThere is potential to earn more money in the savings accountThey are guaranteed a return in stocksThere is potential to earn more money in the stock market
- 29. Multiple ChoiceThis bond would NOT be taxed by the federal governmentU.S. Treasury BondMunicipal BondsCorporate BondsZero-coupon bond
- 30. Multiple ChoiceMore Americans own mutual funds than individuals stocks and bonds.TRUEFALSE
- 31. Multiple ChoiceMoney Market mutual funds can be characterized as...Low risk, low potential rewardMedium risk, medium potential rewardHigh risk, high potential reward
- 32. Multiple ChoiceThe sales commission that a fund manager may charge is called a prospectus.TRUEFALSE
- 33. Multiple ChoiceFor mutual funds, the higher the load, the less the actual investment made on behalf of the investor.TRUEFALSE
- 34. Multiple ChoiceWhich of the following is NOT a condition for markets to exist?Private propertyCompetitionProfit motiveInvoluntary exchange
- 35. Multiple ChoiceWhat does "IPO" stand for?Initial Public OfferingInvestor's Private OwnershipInvesting Publicly OverseasInside Private Operations
- 36. Multiple ChoiceThe New York Stock Exchange and NASDAQ are considered primary marketsTRUEFALSE
- 37. Multiple ChoiceCompanies like Macy's, Chipotle, and McDonalds would most likely trade stocks on this market.New York Stock ExchangeNASDAQTokyo Stock ExchangeLondon Stock Exchange
- 38. Multiple ChoiceHow many companies are included in the Dow Jones Industrial Average?3050100500
- 39. Multiple ChoiceA bond's face value may also be called thepar valuecouponmaturityfinal payment
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