3.00 part 2

For assessing the value of a stock, which represents an invalid qualitative factor to consider?

• staying on top of trends
• offering more healthful food
• employing experienced managers
• paying the CEO a reasonable amount

The price-earnings (PE) ratio measures:

• stock price compared to sales.
• stock price compared to shareholders' equity.
• management's ability to streamline operations.
• investors' expectations about a company's performance.

The PEG ratio is unique because it incorporates price, earnings, and:

• gross profit.
• gross sales.
• growth of EPS.
• growth rate of earnings.

When assessing a stock by using fundamental analysis, an investor should consider:

• qualitative and quantitative factors.
• a chart of the price over the last year.
• only ratios and other quantitative factors.
• recent trends that might affect the short-term price.

Ratios are calculated by:

• multiplying or dividing, depending on the ratio.
• adding or subtracting, depending on the ratio.
• multiplying one number by another.
• dividing one number by another.

When Staci is told to “consider the cost” before selling an investment, she is being advised to:

• estimate the effect of commissions and tax costs on her transaction.
• review every one of the costs she has incurred thus far.
• calculate the costs of prior transactions.
• negotiate for a better, cost-saving deal.

Return on equity (ROE) measures management's ability to make a profit:

• estimate the effect of commissions and tax costs on her transaction.
• review every one of the costs she has incurred thus far.
• calculate the costs of prior transactions.
• negotiate for a better, cost-saving deal.

Since John wants to know the bond’s interest rate, he needs to look at the bond’s:

• issuer.
• coupon.
• maturity.
• par value.

Which best describes a marketable bond?

• one that is bought and sold in the open market
• one that later becomes a stock at a market
• one that comes from a governing body
• one that is paid back before maturity

Which type of stock comes with voting rights?

• income
• common
• preferred
• small cap