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Personal Finance: Investing in Stocks
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What is a a stock?

A stock represents an ownership stake in a company as a common shareholder.

Common stocks allow shareholders to vote on company issues, with most companies granting one vote per share.

Some companies also offer stockholders dividend payouts, giving investors a stream of income on top of the market value of the stock.
 

Personal Finance: Investing in Stocks
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25 Questions

1. Technical analysis focuses on supply and demand, using charts and computer programs to project stock trends.
2. As a shareholder in Titanic Shipping, Inc., James Blue is one of the many actual owners- In case of the bankruptcy of the corporation, his liability would be limited to
3. Your investment goal is to receive a stream of income from your investment- Which of the following would be important information to determine whether a particular stock purchase would suit your plan?
4. You are looking at the stock quotes in your newspaper and you see that your stock closed up 5% yesterday- Where would you look to see how it has been doing over the last year?
5. You purchased 100 shares of Quantex at $150 per share for a total investment of $15,000- After your purchase the stock had a 3 for 1 split- How many shares do you now own and how much is your original investment now worth?
6. A proxy vote means
7. According to your text, over time, investing in stocks generally outperforms most other investments.
8. Compared to other investment options, we can safely say that investing in stocks
9. What point marks the purchase of common stock without a right to a declared dividend?
10. If you wanted information about how the entire stock market is performing, which index would provide you with information on virtually all types and sizes of companies?
11. If you were to purchase common stocks issued by large, nationally known companies with sound financial histories with solid dividend and growth records you would own what are called
12. The S&P 500 is a much broader index than the Dow.
13. The dividend yield tells investors how much in the way of a return they would receive if the stock price and the dividend level remain constant.
14. Which of the following statements is most correct regarding the general relationship between stocks and interest rates?
15. The phrase ________ is sadly appropriate for the actions of some people, as they perceive that investment success rests in making frequent transactions.
16. Large-caps, mid-caps, and small-caps refer to the size of the firm issuing the stock, more specifically, to its
17. ComChip is a computer chip manufacturer whose stock is selling at $50 per share- Next year's net earnings, minus the preferred stock dividends, is estimated to be $200,000- The company currently has 100,000 shares of common stock outstanding- What is the firm's P/E ratio?
18. 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.
19. In the short run, market variability or volatility creates potential risk.
20. Stock splits increase the number of the shares you own, but decrease the value of your total holdings with the company.
21. Proctor and Gamble is an example of a blue-chip stock.
22. Every company must pay dividends as a portion of the company's profits to its stockholders.
23. Both capital gains and dividends are guaranteed with common stock.
24. Some companies distribute earnings per share in the form of dividends and some retain these earnings for future investment in the firm.
25. When a corporation repurchases its own stock, it does so in the secondary markets.