Chapter 17

Question 1

A company whose stock is traded openly on the stock markets

Answer 1

Public corporation

Question 2

When a corporation is profitable the stockholders receive a distribution of money from the company’s earnings called what?

Answer 2

Dividends

Question 3

Represents a type of stock that pays and gives the holder voting rights

Answer 3

Common stock

Question 4

Is an increase in the number of outstanding shares of the company’s stock

Answer 4

Stock split

Question 5

Is the use of dividends previously earned on stock to buy more shares

Answer 5

Dividend reinvestment

Question 6

Stocks that have a history of constantly paying high dividends are called blank stocks

Answer 6

Income stocks

Question 7

Stocks in corporation that reinvest profits into the business so that it can grow are called blank

Answer 7

Growth stocks

Question 8

Is a benchmark that stock investment performance

Answer 8

Stock index

Question 9

Stocks of large well established corporations are called blank stocks

Answer 9

Blue chip stocks

Question 10

Stocks that remain stable during economic decline

Answer 10

Defensive stock

Question 11

Someone who buys and sells stock within a short period of time

Answer 11

Speculator

Question 12

Is an assigned dollar value given to each share of stock

Answer 12

Par value

Question 13

Is the price for which the stock is bought and sold in the marketplace

Answer 13

Market value

Question 14

A corporations after-tax earnings divided by the number of common stock shares outstanding is

Answer 14

Earnings per-share or eps

Question 15

Market that is characterized by rising stock prices and investor optimism

Answer 15

Bull market

Question 16

Is a market that is characterized by falling stock prices and investor pessimism

Answer 16

Bear market

Question 17

A marketplace for brokers buy and sell securities it is called a blank

Answer 17

Securities exchange

Question 18

Playing by and sell stocks on the trading floor of the securities exchange

Answer 18

Floor brokers

Question 19

And abbreviate stock name used in stock listings is known as the stocks…

Answer 19

Ticker symbol

Question 20

Borrowing money to buy stock is called what

Answer 20

Buying on margin or leverage

Question 21

Why is preferred less risky

Answer 21

Because it is fixed

Question 22

Is it true that very few people in the United States own stock

Answer 22

False

Question 23

Is it true or false that with preferred stock dividends are fixed regardless of how the company is doing

Answer 23

True

Question 24

Is it true or false that you can assign your start voting rights to someone else by completing a proxy

Answer 24

True

Question 25

Is it true or false at the par value assigned to a stock has nothing to do with the stock market value

Answer 25

True

Question 26

Is it true or false that the NASDAQ is a form of auction market

Answer 26

False

Question 27

Is it true or false that the security buy and sell stocks and bonds

Answer 27

True

Question 28

True or false that brokers in the over the counter market do you face to face with other brokers

Answer 28

False

Question 29

Is it true or false shortselling involve selling borrowed stock

Answer 29

True

Question 30

Is it’s true or false buying on margin is an illegal activity

Answer 30

False

Question 31

Is it’s true or false that dollar cost averaging is a short term investment strategy

Answer 31

False Bc it’s long term