BUSN 380 DEVRY WEEK 4 QUIZ LATEST
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<strong>BUSN</strong> <strong>380</strong> <strong>DEVRY</strong> <strong>WEEK</strong> 4 <strong>QUIZ</strong> <strong>LATEST</strong><br />
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<strong>BUSN</strong> <strong>380</strong> DeVry Week 4 Quiz Latest<br />
<strong>BUSN</strong><strong>380</strong><br />
<strong>BUSN</strong> <strong>380</strong> DeVry Week 4 Quiz Latest<br />
1. Question : (TCO 5) Which of the following statements is false?<br />
<br />
<br />
<br />
<br />
<br />
No one is going to make you save the money; you need to start a program.<br />
To be useful, investment objectives must be very specific.<br />
Investment goals can be different for each individual.<br />
Because investment objectives deal with the future, it is useful to plan more than 5 years in the<br />
future.<br />
A long-term investment objective involves a time period of 2 years or less.<br />
Question 2. Question : (TCO 5) If an investment objective is considered to be long term, then this<br />
means the goal should be achieved in what time frame?<br />
<br />
<br />
<br />
<br />
<br />
Less than 2 years<br />
In 2–5 years<br />
More than 5 years<br />
Less than 1 year<br />
None of the above<br />
Question 3. Question : (TCO 5) You currently hold a $1,000 corporate bond; however, if interest rates in<br />
the overall economy decrease, which of the following is most likely to be the market value of this bond?<br />
The bond is worthless.<br />
$1,000<br />
$900<br />
$1,100<br />
It is impossible to determine whether the bond’s value will increase or decrease.<br />
Question 4. Question : (TCO 5) Which of the following individuals should have the highest tolerance for<br />
risk?
Joan Cummings, who is a single mother with two small children<br />
Darren Carter, who works for American Airlines and is worried that he is going to be laid off soon<br />
Barry Parks, who is an investment banker and earns over $200,000 per year<br />
Michael Clark, who is 74 years old and been retired for 6 years<br />
Fred Funderbunk, who delivers pizzas and makes about $15,000 per year<br />
Question 5. Question : (TCO 5) Mary Ann recently received a $20,000 gift from her uncle and is<br />
considering investing in stocks, because she knows that historically they have earned an approximately<br />
10–12% rate of return over the last few years. Referring to aspects of investing, Mary Ann is most<br />
concerned about which of the following?<br />
<br />
<br />
<br />
<br />
<br />
Risk<br />
Return<br />
Diversification<br />
Liquidity<br />
Income<br />
Question 6. Question : (TCO 5) A $1,000 corporate bond pays 7.5% a year. What is the annual interest<br />
you will receive?<br />
$1,075<br />
$7.50<br />
$0.75<br />
$75.00<br />
$0<br />
Question 7. Question : (TCO 5) _____ risk occurs when an investment does not keep up with increasing<br />
price levels in our economy.<br />
<br />
<br />
<br />
<br />
<br />
Market<br />
Interest<br />
Inflation<br />
Business failure<br />
Current<br />
Question 8. Question : (TCO 5) John Farmer recently received a legal form from the company where he<br />
owns stocks that list the issues to be decided at the annual stockholders’ meeting. The item asks that he<br />
signs something that allows someone else to vote for him. What has he received?<br />
<br />
<br />
<br />
<br />
<br />
Equity<br />
Proxy<br />
Voting rights<br />
Dividends<br />
None of the above
Question 9. Question : (TCO 5) Matt Dannon just bought the stock of a company that provides him with<br />
the responsibility to approve major company actions. Which one of the following best characterizes this<br />
responsibility?<br />
<br />
<br />
<br />
<br />
<br />
Voting rights<br />
Proxy<br />
Equity<br />
Dividends<br />
None of the above<br />
Question 10. Question : (TCO 5) If Orlando Blodgett is buying the stock of the Getaway Caribbean<br />
Cruise Company. If he buys the stock today, knowing it is the first day it is selling without the dividend for<br />
this quarter, on what date is Orlando buying the stock?<br />
<br />
<br />
<br />
<br />
<br />
Record date<br />
Sale date<br />
Payment date<br />
Ex dividend date<br />
None of the above<br />
Question 11. Question : (TCO 5) Lindsey Holt owns stock in the Galloway Gems Company. She knows<br />
she will receive a $1.50 dividend each quarter. Given this, you know for sure that she purchased which<br />
type of stock?<br />
<br />
<br />
<br />
<br />
<br />
Preferred<br />
Common<br />
Blue chip<br />
Growth<br />
Penny<br />
Question 12. Question : (TCO 5) Dividends must be approved by a firm’s board of directors, and<br />
<br />
<br />
<br />
<br />
<br />
dividend payments are paid out of profits.<br />
dividends are guaranteed.<br />
dividends are paid before a firm’s taxes are paid.<br />
dividends are usually paid twice a year.<br />
dividends can be paid forever.<br />
Question 13. Question : (TCO 5) One option for long-term corporate financing is equity financing, and<br />
this is a popular choice because<br />
<br />
<br />
<br />
a lender is always available to provide this type of financing.<br />
it does not cost anything to sell in the primary market.<br />
repayment doesn’t have to be made for 10 years or more.
only interest must be paid for the first 5 years.<br />
it does not have to be repaid.<br />
Question 14. Question : (TCO 5) Dividends will remain with the stock until<br />
<br />
<br />
<br />
<br />
<br />
5 days after the date of record.<br />
two business days after the date of record.<br />
5 days before the date of record.<br />
two business days before the date of record.<br />
5 days before the actual payment date.<br />
Question 15. Question : (TCO 5) Nancy Groom owns one $1,000 corporate bond issued by Chevron.<br />
The bond has a yield of 10% and pays 8% interest semiannually. How much interest will Ms. Groom<br />
receive in 1 year?<br />
$50<br />
$100<br />
$80<br />
$40<br />
$1,000<br />
Question 16. Question : (TCO 5) Which of the statements below is false?<br />
<br />
<br />
<br />
<br />
<br />
Stock is a form of equity capital.<br />
Stock does not have a maturity date.<br />
Bonds are a form of debt capital.<br />
Bonds do not have to be repaid at maturity.<br />
Interest payments are made to bondholders.<br />
Question 17. Question : (TCO 5) All of the statements are false except for which?<br />
<br />
<br />
<br />
<br />
<br />
Convertible corporate bonds are more secure than government bonds.<br />
Convertible bonds often pay 3–4% more interest than nonconvertible bonds.<br />
Because of the conversion feature, it is not necessary to evaluate convertible corporate bonds.<br />
Even if convertible bondholders convert their investment to common stock, the bondholders still<br />
receive interest payments.<br />
In reality, there is no guarantee that bondholders will convert to common stock even if the market<br />
value of the common stock does increase in value.<br />
Question 18. Question : (TCO 5) You have been thinking about investing in corporate bonds, but are<br />
seeking the most secure bond investment possible. Most likely, you would want to select _____ bonds.<br />
<br />
<br />
<br />
<br />
<br />
debenture<br />
subordinated<br />
indenture<br />
convertible<br />
mortgage
Question 19. Question : (TCO 5) A(n) _____ fund is a fund to which annual or semiannual deposits are<br />
made for the purpose of redeeming a bond issue.<br />
<br />
<br />
<br />
<br />
<br />
serial<br />
indenture<br />
debenture<br />
sinking<br />
money<br />
Question 20. Question : (TCO 5) _____ bonds are a part of a single issue, but they mature on different<br />
dates.<br />
<br />
<br />
<br />
<br />
<br />
Serial<br />
Mortgage<br />
Sinking fund<br />
Subordinate<br />
Debenture
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