Bond & Stock Valuation

Why might you consider investing in bonds?

• Bonds reduce risk through diversification.

• Bonds produce steady income.

• Bonds can be safe investment if held to maturity.

• all of the above

Any bond that is backed by the pledge of collateral is known as what type of bond?

• collateralized

• secured

• recalled

• sinking

The bond that you own does not pay any interest. Instead, it is sold at a "discount" from its maturity value. This is a ________ bond.

• no interest

• face discount

• growth

• zero coupon

Which of the following statements is most correct regarding the general relationship between stocks and interest rates?

• There is no relationship between interest rates and stock prices.

• As interest rates increase, stock prices should also increase.

• As interest rates increase, stock prices should decrease.

• Stock prices are negatively exponentially related to interest rate increases.

When a company buys back its own common stock it is engaging in a ________.

• stock split

• stock repurchase

• stock reissue

• stock repo

A(n) ________ is a legal agreement signed by a stockholder allowing someone else to vote on his or her behalf at the corporation's annual meeting.

• voting contract

• agency contact

• proxy

• contingency contract

If you purchase stock of big companies like Proctor & Gamble, General Electric, and Texaco you would be buying shares of ________ stocks.

• blue-chip

• mini-caps

• speculative

• true-blue

For several years you have been using charts and computer programs to project trends in the stock market.  You are engaging in what type of analysis?

• dollar cost averaging

• fundamental

• technical

• Price/Earnings