Chapter 12 - Chapter 12 Review Questions True/False 1. 2....

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Chapter 12 Review Questions True/False 1. Purchasing power risk is of most concern during economic recession. 2. Interest rate risk is greater for stocks than for bonds. 3. A higher expected return will mean a higher risk will have to be accepted. 4. An investment is acceptable if the expected rate of return is greater than the desired rate of return. 5. You received a stock dividend this year instead of cash. This is taxable income. 6. John and Mary Smith own 500 shares of ABE stock. After the company pays a 6 percent stock dividend, John and Mary will own 530 shares of ABE stock. 7. One would prefer a stock with steadily increasing earning per share and return on equity. 8. Dividend reinvestment plans should be avoided because of their relatively high cost. 9. Bonds provide for investment return primarily in the form of growth. 10. Treasury notes, bills, and bonds represent loans to the federal government. Multiple Choice
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Chapter 12 - Chapter 12 Review Questions True/False 1. 2....

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