Chaminade Univ MBA 754 (Investment Mgmt) Week 6 – Ch. 06 Quiz (Graded)

Grading SummaryThese
are the automatically computed results of your exam. Grades for essay
questions, and comments from your instructor, are in the “Details”
section below. Date Taken: Time Spent: Points Received:
Question
Type: # Of Questions: Multiple Choice 22

Grade
Details – All QuestionsQuestion 1. Question : IPOs that are generally made
available to the average investor tend to be the less desirable new offerings.
Student
Answer: True
False

Question
2. Question : The total-return approach concentrates solely on capital gains
over the long-term.
Student
Answer: True
False

Question
3. Question : Which strategy applies to investors who fund long-term goals with
high-quality stocks which they retain for the entire investment period?
Student
Answer: quality long-term growth
buy
and hold
speculation
current
income

Question
4. Question : American Depositary Receipts (ADRs) are issued against shares of
U.S. corporations and are traded on foreign security exchanges.
Student
Answer: True
False

Question
5. Question : Income stocks are well suited for retirees because
Student
Answer: dividend income is tax-free.
the
capital gains are predictable.
dividend
yields tend to exceed bond yields.
dividends
tend to increase over time.

Question
6. Question : The value that investors place on a stock is called its
Student
Answer: book value.
investment
value.
liquidation
value.
par
value.

Question
7. Question : Aggressive stock management
Student
Answer: is the riskiest of all the investment strategies.
involves
active stock trading in the short-term in the quest for capital gains.
concentrates
on the long-term growth aspects of a security.
concentrates
on high dividend yielding stocks.

Question
8. Question : While many stocks increase in value over the long run, most of
the return on stocks comes from dividends.
Student
Answer: True
False

Question
9. Question : The par or stated value of common stock is important for
Student
Answer: accounting purposes only.
helping
the investor determine the stock’s intrinsic value.
helping
the board of directors determine the dividend payout.
helping
the market determine the trading price of the stock.

Question
10. Question : Rob owns 300 shares of Blackwood common stock valued at $9 a
share. Blackwood has declared a 3-for-1 stock split effective tomorrow. After
the split, Rob will own
Student
Answer: 100 shares valued at about $27 a share.
100
shares valued at about $3 a share.
900
shares valued at about $27 a share.
900
shares valued at about $3 a share.

Question
11. Question : A market correction is defined as a stock market decline of 5%
or more.
Student
Answer: True
False

Question
12. Question : Stocks whose prices are expected to remain stable, or even
prosper, when economic activity is slowing down are known as
Student
Answer: defensive stocks.
cyclical
stocks.
reversible
stocks.
speculative
stocks.

Question
13. Question : Treasury stock is a means of increasing the number of shares
outstanding.
Student
Answer: True
False

Question
14. Question : Every shareholder is a part owner of the firm and, as such, has
a direct claim on a portion of the firm’s assets.
Student
Answer: True
False

Question
15. Question : With respect to dividend payments on stocks, the date of record
is the date on which the payment is actually paid.
Student
Answer: True
False

Question
16. Question : The decision of how much money to pay out in dividends is made
by the
Student
Answer: board of directors.
company
shareholders.
chief
executive officer.
chief
financial officer.

Question
17. Question : When a company, working with an underwriter, offers the
investing public a certain number of shares of its stock at a certain price,
the company is making what is known as a
Student
Answer: public offering.
rights
offering.
stock
spin-off.
treasury
offering.

Question
18. Question : Mid-cap stocks are generally classified as those with a market
capitalization between $1 and $5 billion.
Student
Answer: True
False

Question
19. Question : Assume the Plum Corporation has two different issues of common
stock. One issue carries voting rights, and the other issue does not. In this
situation, Plum is said to have issued
Student
Answer: buy-back stock.
treasury
stock.
OTC
stock.
classified
stock.

Question
20. Question : Which one of the following statements about common stock is true?
Student
Answer: Common stock can provide attractive capital appreciation opportunities.
Dividends
generally provide the greatest rate of return on common stocks.
Common
stocks generally have a negative rate of return over a ten-year period. The
DJIA is the best indicator of the overall performance of common stocks.

Question
21. Question : The technology bubble of the 1990s lasted about 18 months.
Student
Answer: True
False

Question
22. Question : The value of a stock distribution is considered taxable income
at the time of the distribution.
Student
Answer: True
False