Personal Finance: Chapter 11 Test

Companies that have issued stock are required to pay dividends to stockholders.

• True

• False

Buying on margin is a conservative-low risk way to purchase stocks.

• True

• False

Calculate the net profit for the following trade AND determine whether it is a short-term or long-term gain: On February 10, 2024 bought 40 shares of Bitcoin Depot at $10 per share and sold on November 1, 2025 for $20 per share.

• $400 as short-term gain

• $800 as long-term gain

• $400 as long-term gain

• $800 as short-term gain

A stop order trade requests that a stockbroker ____.

• buy a stock at the best possible price

• sell a stock for a specific amount

• decide when to sell a stock

• buy or sell a stock at its current value

A few years ago, Nina purchased stock in several companies to add to her portfolio. Nina noticed that she began receiving higher-than-average dividends compared to her previous portfolio. It can be concluded that her current portfolio has a number of____ stocks.

• income
• growth

• cyclical

• penny

A_____ is a market condition that occurs when investors are optimistic about the economy and they buy stocks in greater demand.

• bull market
• stock market

• over the counter market

• bear market

A marketplace where brokers meet to buy and sell stock is called .

• a securities exchange
• a primary market

• ebay

• a brokerage firm

The_____ of an investment is the annual dividend of an investment divided by the investment's current market value, expressed as a percentage.

• capitalization

• margin

• total return

• current yield

____ is the stock classification for those stocks issued by strong and respected companies that show leadership in an industry and a history of stable earnings.

• preferred stock

• income stock

• blue-chip stock
• growth stock

_____ gives a stockholder an idea of a company's profitability for EACH share.

• Current yield

• Earnings per share
• Price-earnings ratio

• Projected earnings