Question

17) Ted recently inherited a large sum of money that he wants to invest in the stock market. Since he has no investment experience, he has decided that he would like to work with a professional who can explain the market to him and also manage his funds for him. Ted most likely needs the services offered by an): a) deep-discount broker. b) discount broker. c) full-service broker. d) online broker. e) cyberbroker. 1) The DJIA is an index of the stock prices of_ _firms. a) 25 b) 30 c) 50 d) 100 e) 500 19) PT Boats plans to pay a $2.40 a share dividend at the end of each of the next 2 years. At the end of year 3 it will make one final dividend payment to investors of $10 (.e., pay a final liquidating dividend of $10 a share). After the $10 payment, the company plans to close its doors permanently and go out of business. What is the current value of this stock at a discount rate of 16 percent? a) $9.89 b) $10.26 c) $11.28 d) $12.47 e) $14.80 20) Which one of the following is considered the best method of comparing the returns on various sized investments? a) total dollar return b) real (inflation-adjusted) dollar return c) absolute dollar return d) percentage return e) risk return 21) Based on the dividend discount model, an increase in which of the following will lower the current value of a stock? I. II. III. amount of the next dividend dividend growth rate discount rate a) I and II only b) II and III only -) I, II, and III I only III only

Answer 1

Solulim It) full service broker are personal brokers with chanted advices there brokers charge a higher comission on the funds traded and gives more specific advices to their clients rather than Genral advices Hence correct optim is citull service broker The dow ojones industrial Average (DJIA) is an index that tracks 30 Large, publicly-owned companies trading on the New York stock exchange. Hence correct answer is optim Bi Jo & 11:28 I 19. 20) absolute dollar retrun 21) The dividend discount model is quantative method used for Predicting the price of a company's stock based on the theory that it is presented day price is worth the du of its fututre Dividend payments whend discour to their present value Hence correct answer is option ci I and I only