Question #1

What is a dividend?

a) a share of stock

b) quarterly payment from profits made

c) payment for purchase of a stock

d) splitting of stock shares

e)

Question #2

What is the single most important measure of stock risk or volatility?

a) beta

b) dividend

c) index

d) stock

e)

Question #3

Which is an accurate representation of the Beta Rule of Thumb?

a) Higher Beta = Lower Risk

b) Lower Risk = Lower Beta

c) Higher Risk = Higher Beta

d) Both b and c

e)

Question #4

An investor looking for growth in a company would want a _____ P/E ratio where an investor interested in receiving dividends would want a _____ P/E ratio.

a) lower, lower

b) higher, lower

c) higher, higher

d) lower, higher

e)

Question #5

You have decided to purchase 25 shares of Bright Idea Energies and the cost per share is $45. What is the amount of your initial investment?

a) $1000

b) $1080

c) $1125

d) $1350

e)

Question #6

Before you can think about buying stocks, you should make some basic decisions about:

a) how much risk you are willing to take

b) the industry sectors in which you are interested

c) what rate of return you are desiring

d) all of the above

e)

Question #7

What are the three stock market indices used to track market trends?

a) Dow Jones Industrial Average / Standard & Poor’s 500 (S & P 500) / NASDAQ

b) Merrill Lynch / Goldman Sachs / Price Waterhouse

c) Dow Jones Industrial Average / Merrill Lynch / Wachovia

d) NASDAQ / Wachovia / Berkshire Hathaway

e)

Question #8

What are the differences between common stock and preferred stock?

a) Common has voting rights and preferred does not.

b) Common is higher risk and preferred is lower risk.

c) Common pays fixed dividends and preferred pays no dividends.

d) Both A and B.

e)

Question #9

Bright Idea Energies is a utility company and the stock is very low risk. What type of stock would this be classified as?

a) Counter Cyclical

b) Cyclical

c) Speculative

d) Value

e)

Question #10

What is IPO and why is it significant?

a) Interesting Public Offering – The first time a company takes interest in offering stock

b) Initial Public Offering – The first time a company offers stock to the general public

c) Initiative of Public Order – The first time a public company splits their stock

d) Indicators of Public Organization – The first time a company files papers to become a corporation

e)

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