Question : Learning Objective 10-4 1) Investors diversify in order to ________. A) guarantee : 1253058

 

Learning Objective 10-4

 

1) Investors diversify in order to ________.

A) guarantee that they will earn a profit on their investments in stocks

B) minimize the risks of stock ownership

C) develop an appreciation of other cultures

D) earn a lower rate of return for a given amount of risk

 

2) ________ will help give an investor some protection against losses.

A) Learning financial accounting and financial statement analysis

B) Being a close friend of a company’s CEO

C) Buying the most popular stocks

D) Buying a company’s IPO (Initial Public Offering)

 

3) One way to diversify is to ________.

A) invest only in stocks

B) invest only in bonds

C) invest in both stocks and bonds, but always from companies in the same industry, so that you become an industry expert

D) invest in both stocks and bonds from companies in different industries

 

4) One way to diversify is to ________.

A) invest in both the stocks and bonds of a particular company

B) invest in both stocks and bonds from companies in different industries

C) learn both financial accounting and financial statement analysis

D) invest unlimited amounts of money

 

5) Investors diversify in order to ________.

A) earn the highest possible return from each investment in their portfolios

B) offset losses from one investment with gains from another investment

C) take maximum advantage of increases in earnings per share

D) buy low and sell high

 

6) Investors can minimize risk by owning a diversified portfolio.

7) Understanding financial accounting helps to minimize the risk of investing in the stock market.

 

8) Owning many different stocks is riskier than a large investment in a single company.

 

9) Owning bonds as well as stocks is riskier than a large investment in a single company.

 

10) Owning only stocks is riskier than owning both stocks and bonds.

 

Learning Objective 10-5

 

1) Comprehensive income is the total ________.

A) income earned by a company over an entire fiscal year

B) of all items that affect shareholders’ equity except transactions with the owners

C) of all items that affect shareholders’ equity

D) income earned by a company including all of its business segments

 

2) Comprehensive income is ________.

A) income earned by a company over an entire fiscal year

B) included in the calculation of net income

C) not included in the calculation of net income

D) income earned by a company including all of its business segments

 

3) Comprehensive income includes ________.

A) revenues, expenses, and extraordinary items

B) unrealized gains and losses from foreign currency transactions

C) unrealized gains and losses on certain types of investments

D) all of these

4) Comprehensive income includes all changes in equity resulting from ________.

A) contributions by owners

B) dividends

C) net losses

D) purchases of treasury stock

 

5) Comprehensive income is ________.

A) a footnote to the income statement

B) a line item on the balance sheet

C) a line item on the statement of changes in shareholders’ equity

D) never reported on any financial statement

 

6) Which of these is part of OTHER comprehensive income?

A) unrealized gains and losses on foreign currency translation

B) gains and losses from selling property, plant and equipment

C) gains and losses from selling treasury stock

D) gains and losses from issuing a stock dividend

 

7) Which of these is part of OTHER comprehensive income?

A) dividends paid to owners

B) revenues minus expenses

C) unrealized gains and losses on certain types of investments

D) net income

 

8) Comprehensive income equals ________.

A) net income minus preferred dividends

B) net income

C) net income plus other comprehensive income

D) net income plus all non-operating gains and losses

 

9) Comprehensive income is the total of all items that affect shareholders’ equity except transactions with the owners.

10) Items included in other comprehensive income include realized gains and losses from foreign currency translation.