Question 1

If Linda Wilson borrows $20,000 to buy a car and ends up paying the lender a total of $24,000,the $20,000 represents the:

Accepted Answer

A)  principal.
B)  collateral.
C)  trade credit.
D)  discount.
E)  interest.F) C) and D)
G) B) and C)

Question 2

Which of the following statements is true of indexes?

Accepted Answer

A)  They compare current stock prices with those in a specified base period.
B)  They are expressed as the average of certain stock prices.
C)  They compare the market value of different companies.
D)  They measure the difference between the par value and market value of a stock.
E)  They are expressed as price of a stock and its dividend yield.F) B) and D)
G) A) and D)

Question 3

The first-time sale of stocks and bonds directly to the public is called a:

Accepted Answer

A)  primary sale.
B)  new issue.
C)  follow-on offering.
D)  preliminary bid.
E)  fresh deal.F) A) and D)
G) A) and E)

Question 4

The interest rate for _____ changes with current interest rates otherwise available in the economy.

Accepted Answer

A)  floating-rate bonds
B)  junk bonds
C)  secured bonds
D)  serial bonds
E)  debenture bondsF) None of the above
G) A) and C)

Question 5

_____ are best described as a sequence of small bond issues of progressively longer maturity.

Accepted Answer

A)  Floating-rate bonds
B)  Junk bonds
C)  Secured bonds
D)  Serial bonds
E)  Debenture bondsF) B) and D)
G) A) and C)

Question 6

Which of the following is a similarity between the New York Stock Exchange (NYSE) and the NASDAQ market?

Accepted Answer

A)  Recently,both have become privately traded companies.
B)  Previously,they were for-profit companies,but now,they are not-for-profit organizations.
C)  Both exchanges bought or merged with electronic exchanges.
D)  Traditionally,both have been electronic markets.
E)  Traditionally,both have been floor-traded markets.F) A) and B)
G) C) and D)

Question 7

Which of the following is a current asset?

Accepted Answer

A)  Accrued taxes
B)  Short-term bank loans
C)  Unsecured bonds
D)  Accounts receivable
E)  Long-term liabilitiesF) B) and E)
G) B) and D)

Question 8

CorpoNeeds is an e-commerce company that sells office supplies.In an attempt to raise long-term funds,the company decides to issue bonds to lenders.These bonds do not have fixed interest payments,and the rate of interest changes depending on economic conditions.The bonds issued by CorpoNeeds are examples of:

Accepted Answer

A)  floating-rate bonds.
B)  junk bonds.
C)  secured bonds.
D)  serial bonds.
E)  debenture bonds.F) A) and B)
G) A) and C)

Question 9

_____ are reinvested in the assets of the firm and belong to the owners in the form of equity.

Accepted Answer

A)  Dividend yields
B)  Secured bonds
C)  Retained earnings
D)  Transaction balances
E)  Trade creditsF) B) and E)
G) C) and D)

Question 10

The chief goal of financial managers who focus on current assets and liabilities is to:

Accepted Answer

A)  maximize long-term loans.
B)  minimize returns on temporary investments of idle cash.
C)  maximize accrued taxes.
D)  minimize returns on bond issues.
E)  maximize returns on inventory.F) All of the above
G) B) and D)

Question 11

Which of the following is money that an organization owes to suppliers for goods and services?

Accepted Answer

A)  Accounts receivable
B)  Accounts payable
C)  Trade credit
D)  U.S.Treasury bill
E)  Secured bondF) B) and E)
G) None of the above

Question 12

_____ make it possible for owners to sell their stocks and bonds to other investors.

Accepted Answer

A)  Prediction markets
B)  Securities markets
C)  Primary markets
D)  Futures markets
E)  Foreign exchange marketsF) B) and C)
G) D) and E)

Question 13

If the price of a stock is $4 and its dividend yield is $5,then the dividend of the stock is:

Accepted Answer

A)  $20
B)  $80
C)  $50
D)  $10
E)  $30F) B) and E)
G) A) and B)

Question 14

Maria wants to start a restaurant of her own.As she does not have any savings,she approaches her bank for money and enters an agreement with the bank.According to the agreement,the bank agrees to lend her $5000 upon request provided it has sufficient funds to loan the amount.In this scenario,the type of funding obtained by Maria can be regarded as a _____.

Accepted Answer

A)  line of credit
B)  trade credit
C)  logbook loan
D)  non-recourse loan
E)  personal loanF) C) and D)
G) B) and D)

Question 15

Eurodollar deposits can only be made at banks located in London.

Accepted Answer

A) True 
 B)False

Question 16

Cash,investments,accounts receivable,and inventory are:

Accepted Answer

A)  retained earnings.
B)  current liabilities.
C)  long-term assets.
D)  long-term liabilities.
E)  current assets.F) B) and E)
G) None of the above

Question 17

_____ and _____ are measures that are used to measure stock market performance.

Accepted Answer

A)  Assets; liabilities
B)  Indexes; averages
C)  Dividend yields; current yields
D)  Profit ratios; loss percentages
E)  Prime rates; coupon ratesF) A) and B)
G) None of the above

Question 18

_____ are a network of dealers all over the country linked by computers,telephones,and Teletype machines.

Accepted Answer

A)  Stock markets
B)  Primary markets
C)  Over-the-counter markets
D)  Foreign exchange markets
E)  Futures marketsF) A) and E)
G) C) and D)

Question 19

U.S.Treasury bills,certificates of deposit,commercial paper,and eurodollar deposits are examples of:

Accepted Answer

A)  marketable securities.
B)  tradable equities.
C)  transaction balances.
D)  stock dividends.
E)  cash deposits.F) A) and D)
G) C) and D)

Question 20

More and more companies are now using electronic funds transfer systems to pay and collect bills online because:

Accepted Answer

A)  it reduces the amount of tax they need to pay on their profits.
B)  it helps them collect more money than they can through checks.
C)  it reduces the amount of money they need to pay off their bills.
D)  it helps them increase the speed of collections and disbursements to one day.
E)  it helps them quickly pay out the cash that they collect.F) C) and D)
G) A) and B)

Exam 16: Financial Management and Securities Markets

Which of the following is money that an organization owes to suppliers for goods and services?

Correct Answer
verified

If the price of a stock is $4 and its dividend yield is $5,then the dividend of the stock is:

Correct Answer
verified

Which of the following statements is true of indexes?

Correct Answer
verified

The chief goal of financial managers who focus on current assets and liabilities is to:

Correct Answer
verified

_____ are a network of dealers all over the country linked by computers,telephones,and Teletype machines.

Correct Answer
verified

Eurodollar deposits can only be made at banks located in London.

Correct Answer
verified

More and more companies are now using electronic funds transfer systems to pay and collect bills online because:

Correct Answer
verified

Which of the following is a current asset?

Correct Answer
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Correct Answer
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U.S.Treasury bills,certificates of deposit,commercial paper,and eurodollar deposits are examples of:

Correct Answer
verified

The first-time sale of stocks and bonds directly to the public is called a:

Correct Answer
verified

The interest rate for _____ changes with current interest rates otherwise available in the economy.

Correct Answer
verified

Cash,investments,accounts receivable,and inventory are:

Correct Answer
verified

If Linda Wilson borrows $20,000 to buy a car and ends up paying the lender a total of $24,000,the $20,000 represents the:

Correct Answer
verified

_____ are best described as a sequence of small bond issues of progressively longer maturity.

Correct Answer
verified

Correct Answer
verified

_____ make it possible for owners to sell their stocks and bonds to other investors.

Correct Answer
verified

Which of the following is a similarity between the New York Stock Exchange (NYSE) and the NASDAQ market?

Correct Answer
verified

_ and _ are measures that are used to measure stock market performance.

Correct Answer
verified

_____ are reinvested in the assets of the firm and belong to the owners in the form of equity.

Correct Answer
verified

Exam 16: Financial Management and Securities Markets

Which of the following is money that an organization owes to suppliers for goods and services?

Correct AnswerverifiedShow Answer

If the price of a stock is $4 and its dividend yield is $5,then the dividend of the stock is:

Correct AnswerverifiedShow Answer

Which of the following statements is true of indexes?

Correct AnswerverifiedShow Answer

The chief goal of financial managers who focus on current assets and liabilities is to:

Correct AnswerverifiedShow Answer

_____ are a network of dealers all over the country linked by computers,telephones,and Teletype machines.

Correct AnswerverifiedShow Answer

Eurodollar deposits can only be made at banks located in London.

Correct AnswerverifiedShow Answer

More and more companies are now using electronic funds transfer systems to pay and collect bills online because:

Correct AnswerverifiedShow Answer

Which of the following is a current asset?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

U.S.Treasury bills,certificates of deposit,commercial paper,and eurodollar deposits are examples of:

Correct AnswerverifiedShow Answer

The first-time sale of stocks and bonds directly to the public is called a:

Correct AnswerverifiedShow Answer

The interest rate for _____ changes with current interest rates otherwise available in the economy.

Correct AnswerverifiedShow Answer

Cash,investments,accounts receivable,and inventory are:

Correct AnswerverifiedShow Answer

If Linda Wilson borrows $20,000 to buy a car and ends up paying the lender a total of $24,000,the $20,000 represents the:

Correct AnswerverifiedShow Answer

_____ are best described as a sequence of small bond issues of progressively longer maturity.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

_____ make it possible for owners to sell their stocks and bonds to other investors.

Correct AnswerverifiedShow Answer

Which of the following is a similarity between the New York Stock Exchange (NYSE) and the NASDAQ market?

Correct AnswerverifiedShow Answer

_____ and _____ are measures that are used to measure stock market performance.

Correct AnswerverifiedShow Answer

_____ are reinvested in the assets of the firm and belong to the owners in the form of equity.

Correct AnswerverifiedShow Answer

Correct Answer
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_ and _ are measures that are used to measure stock market performance.

Correct Answer
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Correct Answer
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