Unit 1, Topic 7

Question 1

If a company distributes 25 per cent of its profits in the form of dividends to its shareholders, what would the dividend cover be?
A) 4
B) 8
C) 10
D) 25

Answer 1

A) 4

Question 2

Direct investment in shares is low risk for individual investors because, over the long term, equity markets have outpaced inflation. True or False

Answer 2

False

Question 3

A share with a low P/E ratio is likely to be more expensive that other shares in the same market sector. True or Falsw

Answer 3

False

Question 4

Commercial paper in generally issued for a term of between three and six months. True or False

Answer 4

False