Question 1

Which of the following is false?

Accepted Answer

A) is false because once a corporation issues bonds and they are bought by investors, the corporation itself does not sell these bonds directly anymore. Secondary trading of the bonds occurs between investors, not directly from the corporation to new buyers.

Question 2

The yield on a bond is the

Accepted Answer

The yield on a bond is calculated as the annual coupon payment divided by the price paid for the bond, which aligns with choice A. It is also considered the same as the interest rate on the bond, as indicated in choice D. Choices B and C describe the coupon rate and its relation to price or face value, which are different concepts from yield.

Question 3

The original Dow Jones Industrial Average (DJIA)contained ____________ stocks,while the DJIA now consists of ____________ stocks.

Accepted Answer

The original DJIA contained 11 stocks while the current DJIA consists of 30 stocks.

Question 4

Which of the following statements is false?

Accepted Answer

The answer of Which of the following statements is false?
...

Question 5

Suppose that the annual dividend per share of stock is $5.40 and the closing price of the stock is $72.50,the yield of the stock would be

Accepted Answer

The answer of Suppose that the annual dividend per share...

Question 6

Which of the following is false?

Accepted Answer

For bond buyers, a lower price is better as it means they can buy the bond at a cheaper price and potentially earn a higher yield. Higher price means a lower yield, which is worse for bond buyers. Choice A and C are true, and choice D is mostly true although there are some technical differences between the two terms.

Question 7

A person buys a bond with a face value of $10,000 for $9,325.Each year until the maturity date the bond buyer receives $750 from the issuer of the bond.The yield on the bond is

Accepted Answer

To calculate the yield on the bond, we need to use the following formula:

Yield = (Annual interest payment / Purchase price) x 100%

Plugging in the values given, we get:

Yield = ($750 / $9,325) x 100%
Yield = 8.04%

Therefore, the yield on the bond is 8.04 percent. The correct answer is A.

Question 8

In reading the stock market quotes in the newspaper,the column with the heading "Ticker" gives the

Accepted Answer

The ticker symbol is a unique set of letters assigned to a stock or security for trading purposes on a stock exchange. It is a short code used to identify the company and its stock.

Question 9

Which of the following statements is false?

Accepted Answer

The yield on a bond refers to the total return received on a bond, including both the interest earned and any price appreciation or depreciation. It is not the same as the coupon rate, which is the fixed annual interest rate paid out by the bond issuer.

Question 10

The yield of a stock is the

Accepted Answer

Yield is the return on investment that is received by the shareholder. It is calculated as the dividend per share divided by the closing price per share. Therefore, option A is the correct choice.

Question 11

Suppose that the annual dividend per share of stock is $1.40 and the closing price of the stock is $22.00,the yield on the stock would be approximately

Accepted Answer

To find the yield on the stock, you need to divide the annual dividend per share by the closing price of the stock and multiply by 100. 
Yield = (Annual dividend per share / Closing price of stock) x 100
  = (1.40/22.00) x 100 
  = 0.0636 x 100 
  = 6.36%
Therefore, the correct choice is A) 6.36%.

Question 12

Today,the Dow Jones Industrial Average

Accepted Answer

A) The Dow Jones Industrial Average indeed consists of 30 major American companies, representing a wide array of industries except for transportation and utilities. C) The stocks in the Dow are generally widely held by both institutional investors and individuals, reflecting their significance in the market. B) is incorrect because the group of stocks in the Dow can change over time as companies are added or removed based on their relevance and performance. D) is incorrect because the Dow Jones Industrial Average exclusively contains stocks, not bonds.

Question 13

In reading the stock market quotes in the newspaper,the column with the heading "P/E" gives the

Accepted Answer

The P/E column stands for Price-to-Earnings ratio, which is calculated by dividing the latest closing price per share by the latest available earnings per share. Therefore, the correct answer is D - latest closing price per share divided by the latest available earnings per share.

Question 14

Which of the following statements is false?

Accepted Answer

Interest earned on corporate bonds is not exempt from federal income taxes. Interest on municipal bonds, however, is often exempt from federal income taxes.

Question 15

The acronym NASDAQ (one of the stock exchanges)stands for

Accepted Answer

NASDAQ stands for National Association of Securities Dealers Automated Quotations. However, A and B are incorrect as they include "Academy" and "American" instead of "Association", while D is incorrect as it includes "North American" instead of "National".

Question 16

Jessica paid $7,000 for a bond with a face value of $6,000.She will be paid $400 annually as long as she holds on to the bond,until the bond's maturity date.The yield on the bond is

Accepted Answer

The answer of Jessica paid $7,000 for a bond with...

Question 17

Which of the following statements is false?

Accepted Answer

The Dow Jones Industrial Average is not simply computed by summing the prices of the thirty stocks and dividing by 30. It uses a divisor that is adjusted for stock splits, spin-offs, and other factors, making the calculation more complex than a simple arithmetic mean.

Question 18

Bond prices and bond yields have a(n)______________ relationship.

Accepted Answer

Bond prices and yields have an inverse relationship, meaning that as bond prices increase, yields decrease and vice versa. This is because when bond prices rise, investors are willing to accept lower yields in exchange for the safety and stability provided by the bond, and when bond prices fall, investors demand higher yields as compensation for the increased risk.

Question 19

Which of the following can issue bonds?

Accepted Answer

All of the above options can issue bonds. The government, corporations, and government agencies can all issue bonds as a way to raise funds for various purposes.

Question 20

Which of the following statements is false?

Accepted Answer

This statement is false. A stock that yields 5 percent would be better than a stock that yields 4 percent, all else being the same, as it would provide a higher return on investment.

Quiz 25: The Economic Case for and Against Government: Five Topics Considered

Which of the following is false?

The yield on a bond is the

The original Dow Jones Industrial Average (DJIA) contained stocks,while the DJIA now consists of stocks.

Which of the following statements is false?

Suppose that the annual dividend per share of stock is $5.40 and the closing price of the stock is $72.50,the yield of the stock would be

Which of the following is false?

A person buys a bond with a face value of $10,000 for $9,325.Each year until the maturity date the bond buyer receives $750 from the issuer of the bond.The yield on the bond is

In reading the stock market quotes in the newspaper,the column with the heading "Ticker" gives the

Which of the following statements is false?

The yield of a stock is the

Suppose that the annual dividend per share of stock is $1.40 and the closing price of the stock is $22.00,the yield on the stock would be approximately

Today,the Dow Jones Industrial Average

In reading the stock market quotes in the newspaper,the column with the heading "P/E" gives the

Which of the following statements is false?

The acronym NASDAQ (one of the stock exchanges) stands for

Jessica paid $7,000 for a bond with a face value of $6,000.She will be paid $400 annually as long as she holds on to the bond,until the bond's maturity date.The yield on the bond is

Which of the following statements is false?

Bond prices and bond yields have a(n) ______________ relationship.

Which of the following can issue bonds?

Which of the following statements is false?

Quiz 25: The Economic Case for and Against Government: Five Topics Considered

Which of the following is false?

The yield on a bond is the

The original Dow Jones Industrial Average (DJIA) contained ____________ stocks,while the DJIA now consists of ____________ stocks.

Which of the following statements is false?

Suppose that the annual dividend per share of stock is $5.40 and the closing price of the stock is $72.50,the yield of the stock would be

Which of the following is false?

A person buys a bond with a face value of $10,000 for $9,325.Each year until the maturity date the bond buyer receives $750 from the issuer of the bond.The yield on the bond is

In reading the stock market quotes in the newspaper,the column with the heading "Ticker" gives the

Which of the following statements is false?

The yield of a stock is the

Suppose that the annual dividend per share of stock is $1.40 and the closing price of the stock is $22.00,the yield on the stock would be approximately

Today,the Dow Jones Industrial Average

In reading the stock market quotes in the newspaper,the column with the heading "P/E" gives the

Which of the following statements is false?

The acronym NASDAQ (one of the stock exchanges) stands for

Jessica paid $7,000 for a bond with a face value of $6,000.She will be paid $400 annually as long as she holds on to the bond,until the bond's maturity date.The yield on the bond is

Which of the following statements is false?

Bond prices and bond yields have a(n) ______________ relationship.

Which of the following can issue bonds?

Which of the following statements is false?

The original Dow Jones Industrial Average (DJIA) contained stocks,while the DJIA now consists of stocks.