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Devry Busn380 Week 4 Quiz 2016

  • September 18, 2022
  • 11:40 pm
  • No Comments

1. (TCO 5) Which of the following statements is false?
(Points : 1)

No one is going
to make you save the money; you need to start a program.

To be useful,
investment objectives must be very specific.

Investment
goals can be different for each individual.

Because
investment objectives deal with the future, it is useful to plan more than 5
years in the future.

A long-term investment objective involves a time period of 2
years or less.

Question 2. 2. (TCO 5) If an investment objective is
considered to be long term, then this means the goal should be achieved in what
time frame? (Points : 1)

Less than 2
years

In 2–5 years

More than 5 years

Less than 1
year

None of the
above

Question 3. 3. (TCO 5) You currently hold a $1,000 corporate
bond; however, if interest rates in the overall economy decrease, which of the
following is most likely to be the market value of this bond? (Points : 1)

The bond is
worthless.

$1,000

$900

$1,100

It is
impossible to determine whether the bond’s value will increase or decrease.

Question 4. 4. (TCO 5) Which of the following individuals
should have the highest tolerance for risk? (Points : 1)

Joan Cummings,
who is a single mother with two small children

Darren Carter,
who works for American Airlines and is worried that he is going to be laid off
soon

Barry Parks, who is an investment banker and earns over
$200,000 per year

Michael Clark,
who is 74 years old and been retired for 6 years

Fred
Funderbunk, who delivers pizzas and makes about $15,000 per year

Question 5. 5. (TCO 5) Mary Ann recently received a $20,000
gift from her uncle and is considering investing in stocks, because she knows
that historically they have earned an approximately 10–12% rate of return over
the last few years. Referring to aspects of investing, Mary Ann is most
concerned about which of the following? (Points : 1)

Risk

Return

Diversification

Liquidity

Income

Question 6. 6. (TCO 5) A $1,000 corporate bond pays 7.5% a
year. What is the annual interest you will receive? (Points : 1)

$1,075

$7.50

$0.75

$75.00

$0

Question 7. 7. (TCO 5) _____ risk occurs when an investment
does not keep up with increasing price levels in our economy. (Points : 1)

Market

Interest

Inflation

Business
failure

Current

Question 8. 8. (TCO 5) John Farmer recently received a legal
form from the company where he owns stocks that list the issues to be decided
at the annual stockholders’ meeting. The item asks that he signs something that
allows someone else to vote for him. What has he received? (Points : 1)

Equity

Proxy

Voting rights

Dividends

None of the
above

Question 9. 9. (TCO 5) cy to approve major company actions.
Which one of the following best characterizes this responsibility? (Points : 1)

Voting rights

Proxy

Equity

Dividends

None of the
above

Question 10. 10. (TCO 5) If Orlando Blodgett is buying the
stock of the Getaway Caribbean Cruise Company. If he buys the stock today,
knowing it is the first day it is selling without the dividend for this
quarter, on what date is Orlando buying the stock? (Points : 1)

Record date

Sale date

Payment date

Ex dividend date

None of the above

Question 11. 11. (TCO 5) Lindsey Holt owns stock in the
Galloway Gems Company. She knows she will receive a $1.50 dividend each
quarter. Given this, you know for sure that she purchased which type of stock?
(Points : 1)

Preferred

Common

Blue chip

Growth

Penny

Question 12. 12. (TCO 5) Dividends must be approved by a
firm’s board of directors, and (Points : 1)

dividend payments are paid out of profits.

dividends are guaranteed.

dividends are paid before a firm’s taxes are paid.

dividends are usually paid twice a year.

dividends can be paid forever.

Question 13. 13. (TCO 5) cOne option for long-term corporate
financing is equity financing, and this is a popular choice because(Points : 1)

a lender is always available to provide this type of
financing.

it does not cost anything to sell in the primary market.

repayment doesn’t have to be made for 10 years or more.

only interest must be paid for the first 5 years.

it does not have to be repaid.

Question 14. 14. (TCO 5) Dividends will remain with the
stock until (Points : 1)

5 days after
the date of record.

two business days after the date of record.

5 days before
the date of record.

two business days before the date of record.

5 days before
the actual payment date.

Question 15. 15. (TCO 5) Nancy Groom owns one $1,000
corporate bond issued by Chevron. The bond has a yield of 10% and pays 8%
interest semiannually. How much interest will Ms. Groom receive in 1 year?
(Points : 1)

$50

$100

$80

$40

$1,000

Question 16. 16. (TCO 5) Which of the statements below is
false? (Points : 1)

Stock is a form
of equity capital.

Stock does not
have a maturity date.

Bonds are a
form of debt capital.

Bonds do not have to be repaid at maturity.

Interest
payments are made to bondholders.

Question 17. 17. (TCO 5) All of the statements are false
except for which? (Points : 1)

Convertible
corporate bonds are more secure than government bonds.

Convertible
bonds often pay 3–4% more interest than nonconvertible bonds.

Because of the
conversion feature, it is not necessary to evaluate convertible corporate
bonds.

Even if
convertible bondholders convert their investment to common stock, the
bondholders still receive interest payments.

In reality, there is no guarantee that bondholders will
convert to common stock even if the market value of the common stock does
increase in value.

Question 18. 18. (TCO 5) You have been thinking about
investing in corporate bonds, but are seeking the most secure bond investment
possible. Most likely, you would want to select _____ bonds. (Points : 1)

debenture

subordinated

indenture

convertible

mortgage

Question 19. 19. (TCO 5) A(n) _____ fund is a fund to which
annual or semiannual deposits are made for the purpose of redeeming a bond
issue. (Points : 1)

serial

indenture

debenture

sinking

money

Question 20. 20. (TCO 5) _____ bonds are a part of a single
issue, but they mature on different dates. (Points : 1)

Serial

Mortgage

Sinking fund

Subordinate

Debenture

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