Question 1

_____ are marketable securities that are short-term debt obligations sold by the U.S.government to raise money.

Accepted Answer

A)  Commercial certificates of deposits
B)  U.S.Treasury bills
C)  Eurodollar deposits
D)  Secured loans
E)  Trade creditsF) All of the above
G) None of the above

Question 2

Which of the following statements is true of floating-rate bonds?

Accepted Answer

A)  They are also called serial bonds.
B)  They offer interest payments much above the prevailing rates.
C)  They do not have fixed interest payments.
D)  They have progressively longer maturity.
E)  They are often associated with startup firms with limited track records.F) B) and D)
G) D) and E)

Question 3

Which of the following involves paying a fee for usage rather than owning a particular asset?

Accepted Answer

A)  Leasing
B)  Factoring
C)  Purchasing
D)  Acquiring
E)  MergingF) B) and D)
G) All of the above

Question 4

As idle cash does not make money,a manager may choose to invest this extra cash in temporary investments called:

Accepted Answer

A)  junk bonds.
B)  long-term assets.
C)  transaction balances.
D)  marketable securities.
E)  secured bonds.F) B) and E)
G) B) and C)

Question 5

Which of the following markets regularly accounts for the largest total dollar value of all of the secondary markets?

Accepted Answer

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

Question 6

Which of the following is a long-term debt instrument that requires the issuer to repay the lender in regular interest payments until the loan is repaid on or before the specified maturity rate?

Accepted Answer

A)  A bond
B)  Trade credit
C)  A Treasury bill
D)  Commercial paper
E)  A certificate of depositF) None of the above
G) A) and D)

Question 7

If a real estate developer borrows $100,000 from a bank and ends up paying back $120,000,the $100,000 represents the:

Accepted Answer

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

Question 8

A finance company that buys other companies' accounts receivable for less than they are worth and assumes the responsibility for collecting the debt is known as a:

Accepted Answer

A)  lockbox.
B)  factor.
C)  collateral.
D)  brokerage.
E)  conciliator.F) B) and C)
G) None of the above

Question 9

When a company invests a lot of money in a particular project,it is concerned about the amount of risk involved.In general,if the expected life of a project is longer,its potential risk is:

Accepted Answer

A)  negligible.
B)  constant.
C)  greater.
D)  secondary.
E)  nonexistent.F) C) and D)
G) A) and D)

Question 10

Which of the following is true of commercial paper?

Accepted Answer

A)  It is the most popular long-term investment for small businesses.
B)  It acts as a verbal promise to pay a specific amount of money.
C)  It is backed only by the name and reputation of the issuing company.
D)  It is only sold to sole proprietors and small businesses.
E)  It is only sold for durations of two years or more.F) C) and D)
G) C) and E)

Question 11

If the par value of a stock is $5 and the capital in excess of par is $3,then its offering price is:

Accepted Answer

A)  $2.00.
B)  $3.50.
C)  $7.00.
D)  $4.00.
E)  $5.00.F) B) and C)
G) B) and E)

Question 12

Which of the following is one of the utilities of the radio frequency identification (RFID) technology?

Accepted Answer

A)  It is used for office communication with the help of radio waves.
B)  It is used to track stock exchange developments.
C)  It is used to better manage inventory by tracking inventory shipments.
D)  It is used by consumers to pay bills from any chosen location.
E)  It is used to relay radio signals for business promotion through radio broadcasting.F) B) and E)
G) A) and E)

Question 13

Stockholders who are prioritized in the distribution of a firm's dividends but cannot vote are called:

Accepted Answer

A)  common stockholders.
B)  proxy stockholders.
C)  preemptive stockholders.
D)  secured stockholders.
E)  preferred stockholders.F) None of the above
G) A) and E)

Question 14

Organizations often invest the cash they earn in marketable securities,for periods as short as one day or for as long as one year,until it is needed.These investments include _____.

Accepted Answer

A)  certificates of deposit
B)  tradable equities
C)  transaction balances
D)  stock dividends
E)  cash depositsF) A) and C)
G) B) and D)

Question 15

Pooja is an entrepreneur who starts an IT firm with limited funds.In order to conduct her business,she acquires 12 laptops,15 desktops,and other accessories from a local electronics retailer.The retailer understands her financial situation and allows her to pay for the computers and accessories in installments.In this scenario,the type of funding obtained by her can be regarded as a _____.

Accepted Answer

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

Question 16

The face value of a bond is typically _____.

Accepted Answer

A)  $1
B)  $10
C)  $100
D)  $1,000
E)  $10,000F) B) and E)
G) A) and E)

Question 17

Plants,offices,and equipment are considered:

Accepted Answer

A)  long-term assets.
B)  marketable securities.
C)  common stock.
D)  short-term liabilities.
E)  current assets.F) D) and E)
G) All of the above

Question 18

The dollar amount printed on a stock certificate is known as its:

Accepted Answer

A)  dividend yield.
B)  capital in excess of par value.
C)  market value.
D)  par value.
E)  prime rate.F) C) and D)
G) A) and D)

Question 19

If the interest rate on a loan changes according to the daily average of the prime rate over the life of the loan,the interest rate is said to be:

Accepted Answer

A)  floating.
B)  non-variable.
C)  unsecured.
D)  sporadic.
E)  flexible.F) A) and B)
G) A) and E)

Question 20

The two biggest stock markets in the United States are the:

Accepted Answer

A)  American Stock Exchange and the New York Stock Exchange.
B)  Chicago Stock Exchange and the International Securities Exchange.
C)  New York Stock Exchange and the NASDAQ market.
D)  Southeast Regional Stock Exchange and the Chicago Board Options Exchange.
E)  American Stock Exchange and the NASDAQ market.F) All of the above
G) A) and E)

Exam 16: Financial Management and Securities Markets

The two biggest stock markets in the United States are the:

Correct Answer
verified

A finance company that buys other companies' accounts receivable for less than they are worth and assumes the responsibility for collecting the debt is known as a:

Correct Answer
verified

Which of the following involves paying a fee for usage rather than owning a particular asset?

Correct Answer
verified

Which of the following is true of commercial paper?

Correct Answer
verified

The face value of a bond is typically _____.

Correct Answer
verified

When a company invests a lot of money in a particular project,it is concerned about the amount of risk involved.In general,if the expected life of a project is longer,its potential risk is:

Correct Answer
verified

Which of the following is a long-term debt instrument that requires the issuer to repay the lender in regular interest payments until the loan is repaid on or before the specified maturity rate?

Correct Answer
verified

If the par value of a stock is $5 and the capital in excess of par is $3,then its offering price is:

Correct Answer
verified

_____ are marketable securities that are short-term debt obligations sold by the U.S.government to raise money.

Correct Answer
verified

Stockholders who are prioritized in the distribution of a firm's dividends but cannot vote are called:

Correct Answer
verified

If the interest rate on a loan changes according to the daily average of the prime rate over the life of the loan,the interest rate is said to be:

Correct Answer
verified

Correct Answer
verified

As idle cash does not make money,a manager may choose to invest this extra cash in temporary investments called:

Correct Answer
verified

Which of the following statements is true of floating-rate bonds?

Correct Answer
verified

Plants,offices,and equipment are considered:

Correct Answer
verified

Which of the following is one of the utilities of the radio frequency identification (RFID) technology?

Correct Answer
verified

Organizations often invest the cash they earn in marketable securities,for periods as short as one day or for as long as one year,until it is needed.These investments include _____.

Correct Answer
verified

The dollar amount printed on a stock certificate is known as its:

Correct Answer
verified

Which of the following markets regularly accounts for the largest total dollar value of all of the secondary markets?

Correct Answer
verified

If a real estate developer borrows $100,000 from a bank and ends up paying back $120,000,the $100,000 represents the:

Correct Answer
verified

Exam 16: Financial Management and Securities Markets

The two biggest stock markets in the United States are the:

Correct AnswerverifiedShow Answer

A finance company that buys other companies' accounts receivable for less than they are worth and assumes the responsibility for collecting the debt is known as a:

Correct AnswerverifiedShow Answer

Which of the following involves paying a fee for usage rather than owning a particular asset?

Correct AnswerverifiedShow Answer

Which of the following is true of commercial paper?

Correct AnswerverifiedShow Answer

The face value of a bond is typically _____.

Correct AnswerverifiedShow Answer

When a company invests a lot of money in a particular project,it is concerned about the amount of risk involved.In general,if the expected life of a project is longer,its potential risk is:

Correct AnswerverifiedShow Answer

Which of the following is a long-term debt instrument that requires the issuer to repay the lender in regular interest payments until the loan is repaid on or before the specified maturity rate?

Correct AnswerverifiedShow Answer

If the par value of a stock is $5 and the capital in excess of par is $3,then its offering price is:

Correct AnswerverifiedShow Answer

_____ are marketable securities that are short-term debt obligations sold by the U.S.government to raise money.

Correct AnswerverifiedShow Answer

Stockholders who are prioritized in the distribution of a firm's dividends but cannot vote are called:

Correct AnswerverifiedShow Answer

If the interest rate on a loan changes according to the daily average of the prime rate over the life of the loan,the interest rate is said to be:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

As idle cash does not make money,a manager may choose to invest this extra cash in temporary investments called:

Correct AnswerverifiedShow Answer

Which of the following statements is true of floating-rate bonds?

Correct AnswerverifiedShow Answer

Plants,offices,and equipment are considered:

Correct AnswerverifiedShow Answer

Which of the following is one of the utilities of the radio frequency identification (RFID) technology?

Correct AnswerverifiedShow Answer

Organizations often invest the cash they earn in marketable securities,for periods as short as one day or for as long as one year,until it is needed.These investments include _____.

Correct AnswerverifiedShow Answer

The dollar amount printed on a stock certificate is known as its:

Correct AnswerverifiedShow Answer

Which of the following markets regularly accounts for the largest total dollar value of all of the secondary markets?

Correct AnswerverifiedShow Answer

If a real estate developer borrows $100,000 from a bank and ends up paying back $120,000,the $100,000 represents the:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified