Marketable securities are held primarily to meet:
a. transactions motives
b. precautionary motives
c. speculative motives
d. leverage motives
Which of the following is not a variable cost?
a. CEO Salary
b. rent
c. mortgage payments
d. property taxes
e. none of the above are variable costs
Which of the following statements is false?
a. For a given APR, more frequent compounding results in additional return on the
investment.
b. An amortized loan is repaid in equal payments over a specified time period.
c. The effective annual rate is determined by multiplying the interest rate charged per
period by the number of periods in a year.
d. Each of the above statements is true.
Which one of the following is not a basic function of financial management?
a. financial planning and analysis
b. acquiring other business firms
c. asset management
d. raising of funds
The aftermarket is:
a. the over-the-counter market
b. the foreign exchange market
c. the period after a new issue is initially sold to the public
d. none of the above
The corporate planning tool that develops project plans that fit well with the firm’s
plans is often referred to by the following acronym:
a. MOGS
b. SMOG
c. OMGS
d. GOMS
e. none of the above statements are correct
Creditworthiness reflects:
a. an individual borrower€s capacity to pay
b. collateral or security to the lender,
c. character
d. a, b, and c above.
e. neither a, b, nor c above
Chrysler has a bond outstanding with eight years remaining to maturity, a coupon rate
of 5%, and semiannual payments. If the market price of the Chrysler bond is $729.05,
what is the yield to maturity?
a. 7%
b. 9%
c. 10%
d. 11%
____________ provide predetermined credit limits to consumers at the time the cards
are issued.
a. debit cards
b. ATM cards
c. credit cards
d. none of the above
Which one of the following financial statements shows a relationship between assets
and liabilities plus owners’ equity?
a. income statement
b. statement of cash flows
c. balance sheet
d. statement of retained earnings
A promise of future payment issued by a firm guaranteed by a bank is called a (n)
a. bill of exchange
b. commercial letter of credit
c. banker’s acceptance
d. documentary draft
Major types of financial institutions include all of the following EXCEPT:
a. commercial banks
b. pension funds
c. insurance companies
d. brokerage firms
Large multinational corporations enjoy special opportunities for risk reduction or
speculative gains from currency activities:
a. because of their influence on currency developments in the various countries
b. since they can move balances from one country to another as monetary conditions
seem to warrant
c. because of their generally stronger credit ratings
d. because they always deal in currencies denominated in U.S. dollars
A (n) ________ portfolio maximizes return for a given level of risk, or minimizes risk
for a given level of return.
a. efficient
b. profit maximizing
c. idiosyncratic
d. diverse
e. none of the above
Which of the following statements is false?
a. Until the Civil War, the federal government was the major issuer of paper money.
b. In order for traders in early economies to accept or barter for items, the supply of the
item had to be limited in relation to the desire of individual in the economy to have the
item.
c. Collectors of old coins and paper money are referred to as numismatists.
d. All of the above statements are false.
Which of the following securities issues do not require competitive bidding?
a. state government bond issues
b. public utility security issues
c. Federal government bond issues
d. corporate bond issues
A syndicate is a group of several investment banking firms that participate in
underwriting and distributing a security issue.
The variance is the square root of the standard deviation.
The deposit of a check drawn on the Fed is a derivative deposit because it adds new
reserves to the bank where deposited and to the banking system.
All securities must be listed before they may be traded on the New York Stock
Exchange.
Even though credit card balances and limits are not included in any definition of money
supply, these balances and limits can affect the rate of turnover of money supply and
contribute to money supply eXpansion.