Chapter 1

Question 1

Declares dividends

Answer 1

Board of directors

Question 2

When a firm acts as a broker

Answer 2

Commission is charged

Question 3

Firm acts as dealer

Answer 3

Mark up or mark down included

Question 4

Outstanding shares formula

Answer 4

Issued shares - treasury stock = outstanding shares

Question 5

Market capitalization formula

Answer 5

Outstanding shares x current market price = market capitalization

Question 6

market capitalization of greater than $10 billion

Answer 6

Large-cap stocks

Question 7

large-cap index

Answer 7

S&P 500

Question 8

They have market capitalization of between $2 billion and$10 billion.

Answer 8

Mid-cap stocks

Question 9

Russell 1000

Answer 9

a mid-cap index

Question 10

have market capitalization of below 2 billion.

Answer 10

Small-cap stocks

Question 11

The Russell 2000

Answer 11

Small-cap index

Question 12

Defensive stocks

Answer 12

Protect investors during a recession

Question 13

the opposite of defensive stocks

Answer 13

Cyclical stocks

Question 14

Statutory voting favors

Answer 14

investors who own more shares(larger stockholders).

Question 15

Formula for dividend yield

Answer 15

Dividend Yield = Annual Dividends ÷ Current Market Price

Question 16

Stocks or portfolios with high betas have

Answer 16

more risk

Question 17

lower betas have

Answer 17

less risk

Question 18

The Bid and NAV are

Answer 18

redemption prices

(i.e., customers sell at the bid).

Question 19

If a portfolio or stock has a beta that is greater than 1.0

Answer 19

it is more risky than the market