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The 10 questions below are designed to test your basic knowledge of investments. Answering these questions will help you decide if Why Stocks Go Up and Down, 4th Edition is worth the investment (pun intended).

Questions

If you are human, leave this field blank.

Question 1: EPS declines when a company raises its common dividend.

True

False

Question 2: Dividends paid in a given year can exceed the net income generated that year.

True

False

Question 3: Dilution occurs when outstanding shares of stock in a company become worth less as a result of the company issuing more shares.

True

False

Question 4: The Debt to total capitalization ratio (sometimes referrred to simply as debt to cap) usually refers to total debt divided by total capitalization.

True

False

Question 5: Investors wishing to minimize their risk of loss would be better off buying a companys debentures than its bonds.

True

False

Question 6: A bond selling at a discount from par will have a higher yield to maturity than current yield.

True

False

Question 7: The higher the price-to-earnings ratio the greater the risk.

True

False

Question 8: For some companies it is preferable to value the stock using a multiple of cash flow or EBITDA rather than earnings.

True

False

Question 9: Determining if a stock's P/E multiple is attractive or not is better judged using future earnings than present earnings.

True

False

Question 10: Stocks go up and down in response to changes in investors' perception of a company's ability to generate earnings and pay dividends, both this year and in the future.

True

False

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