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Stocks Q&A Quick Test Question #1: Which of the following would be good examples of large-size, value-oriented companies? A. Chase Manhattan Bank and Starbucks B. Caterpillar and Pacific Bell C. IBM, Intel and Microsoft D. Pepsi Cola and Home Depot Question #2: A fund that invests primarily in countries outside the U.S., but can include U.S. companies as well would be a: A. Foreign fund B. International fund C. Global equity fund D. All of the above Question #3: Which of the following scenarios is best suited for an investment in stocks? A. Candy wants to set money aside for college for her two-year-old daughter. B. Bob wants to diversify into a portfolio that will provide guarantee of principal. C. Nancy needs to find a home for money that she'll be using in five months for a trip to Pago Pago. D. Agatha just retired and wants a relatively stable investment that will also give her monthly income. Question #4: Historically, an investor had a 90% likelihood of earning a positive return from stocks once the holding period reaches: A. 1 year B. 5 years C. 10 years D. 15 years Question #5: Which of the following is not true of preferred stocks? A. They generally pay less income than bonds of the same company. B. They appeal mainly to individuals who get a tax break on the dividend income. C. They allow investors to participate in the ownership of the company. D. They pay a specific dividend that is set when the stock is issued. Question #6: The P/E Ratio: A. Means "physical earning" ratio. B. Is obtained by dividing the stock's par value by the earnings over the last quarter. C. Is an important indicator of future guaranteed dividends of the stock. D. Is obtained by dividing the stock's price by the earnings for the latest four quarters. Question #7: Balanced funds: A. Usually contain both domestic and international stocks. B. Invest mainly in stocks of companies that have had an increase in value as well as a record of paying dividends. C. Usually contain both stocks and bonds. D. Invest in many different sectors of the market to stay in balance. < PREVIOUS NEXT > #38599