Question: A stock split:
Answer Choices: A. increases retained earnings
B. increases equity
C. generates capital gains
D. does not affect liabilities
Answer: D. does not affect liabilities
Question: The risk-adjusted required rate of return excludes:
Answer Choices: A. the anticipated return on the market
B. the risk-free rate
C. the stock’s beta
D. the stock’s standard deviation
Answer: D. the stock’s standard deviation
Question: Which of the following bonds is most like cash?
Answer Choices: A. zero coupon bond
B. income bond
C. bearer bond
D. mortgage bond
Answer: C. bearer bond
Question: __________ is the return necessary to induce an individual to make an investment.
Answer Choices: Expected return
Required return
Average return
Realized return
Induced return
Answer: Required return
Question: Bonds that are not registered and are payable to the person who possesses them are called:
Answer Choices: Euro Bonds
Registered Bonds
Indentures
Bearer Bonds
Foreign Bonds
Answer: Bearer Bonds
Question: Dividends are paid on the:
Answer Choices: A. distribution date
B. date of record
C. declaration date
D. ex-dividend date
Answer: A. distribution date
Question: A diversified portfolio reduces:
Answer Choices: A. systematic risk
B. unsystematic risk
C. purchasing power risk
D. interest rate risk
Answer: B. unsystematic risk
Question: A beta coefficient for a risky stock is:
Answer Choices: A. negative
B. equal to 1.0
C. greater than 1.0
D. less than 1.0
Answer: C. greater than 1.0
Question: The standard deviation measures:
Answer Choices: A. the security’s high-low prices
B. unsystematic risk
C. the dispersion around an average value
D. systematic risk
Answer: C. the dispersion around an average value
Question: Stock repurchases:
Answer Choices: A. decrease liabilities
B. increase liabilities
C. increase per-share earnings
D. decrease per-share earnings
Answer: C. increase per-share earnings