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BUSN 380 DeVry Week 4 Quiz Latest


BUSN 380 DeVry Week 4 Quiz Latest

  1. Question : (TCO 5)Which of the following statements is false?
  • 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. Question : (TCO 5) If an investment objective is considered to be long term, then this means the goal should be achieved in what time frame?

  • Less than 2 years
  • In 2–5 years
  • More than 5 years
  • Less than 1 year
  • None of the above

Question 3. Question : (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?

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

  • 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. Question : (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?

  • Risk
  • Return
  • Diversification
  • Liquidity
  • Income

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

  • $1,075
  • $7.50
  • $0.75
  • $75.00
  • $0

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

  • Market
  • Interest
  • Inflation
  • Business failure
  • Current

Question 8. Question : (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?

  • Equity
  • Proxy
  • Voting rights
  • Dividends
  • None of the above

Question 9. Question : (TCO 5) Matt Dannon just bought the stock of a company that provides him with the responsibility to approve major company actions. Which one of the following best characterizes this responsibility?

  • Voting rights
  • Proxy
  • Equity
  • Dividends
  • None of the above

Question 10. Question : (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?

  • Record date
  • Sale date
  • Payment date
  • Ex dividend date
  • None of the above

Question 11. Question : (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?

  • Preferred
  • Common
  • Blue chip
  • Growth
  • Penny

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

  • 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. Question : (TCO 5) One option for long-term corporate financing is equity financing, and this is a popular choice because

  • 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. Question : (TCO 5) Dividends will remain with the stock until

  • 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. Question : (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?

  • $50
  • $100
  • $80
  • $40
  • $1,000

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

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

  • 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. Question : (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.

  • debenture
  • subordinated
  • indenture
  • convertible
  • mortgage

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

  • serial
  • indenture
  • debenture
  • sinking
  • money

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

  • Serial
  • Mortgage
  • Sinking fund
  • Subordinate
  • Debenture