Timothy Calibe Purchased Common Stock in XYZWidgets

question 14

Multiple Choice

Timothy Calibe purchased common stock in XYZWidgets.com. To be a successful investor, he should

• A) Buy more common stock in XYZWidgets.com.
• B) Buy preferred stock in XYZWidgets.com.
• C) Buy bonds in XYZWidgets.com.
• D) Continue to evaluate his investment in XYZWidgets.com after the purchase.
• E) Any of these would reduce his business failure risk.

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Definitions:

Fair Value

The estimated market value of an asset, liability, or financial instrument that is agreed upon by both the buyer and seller.

Measuring

The process of determining the size, quantity, or degree of something typically through the use of standardized units or instruments.

Good News Earnings Surprises

Instances when a company's reported earnings exceed the expectations of analysts and investors, typically resulting in a positive reaction in the stock market.

Stock Returns

The earnings generated from investing in shares of stock, including dividends received and capital gains from price increases.