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FINA 210 Bmc quiz 2 summer solution 2024 Concordia University
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FINA 210 Bmc quiz 2 summer solution 2024Concordia University
, 1. Why companies do IPO’s?
a. When companies go bankrupt, they must delist
b. IPOs incentivize entrepreneurs to innovate IPOs provide a way for entrpreneurs
to monetize their work
c. Company management gets to ring the bell on stock exchange floor
d. Companies with revenue above a certain threshold must be publicly listed by law
2. Why do company manager-owners smile when they ring the stock exchange bell at
their IPO?
a. Manager-owners receive their first stake in the company at an IPO
b. Manager-owners are freed of the burden of managing their company
c. An IPO’s price goes up on the first day, generating guaranteed returns for investors
d. An IPO reveals the value of the manager-owners’ stake
3. The Dow Jones Industrial Average Index has an unusual weighting methodology.
Unlike the S&P 500, it is weighted by the share price. Here are 20 of the 30 members
of the Dow Jones on March 20, 2019. If all the shares went up by 5%, which share on
the screen shown would have the biggest contribution to an upward movement in the
index?
a. General Electric
b. Goldman Sachs
c. Exxon Mobil
d. Apple
4. In 1999, James Glassman and Kevin Hussett published a book called “Dow 36,000.”
At the time, the Dow Jones Industrial Average Index was just under 12,000. Which of
the following is a potential substitute for the book title?
a. “The Sum Of The Share Prices of All 30 Dow Jones Members Will Triple”
b. “The Sum of the Market Caps of All 30 Dow Jones Members Will Triple”
c. “The Total Market Cap of the Stock Market Will GO Down 36,000 Points”
d. “The Average Retirement Account of an Industrial Worker Will Triple”
5. What is the Prime reason that Jenny’s discretionary income is more volatile than
her salary?
a. Her tax rate remains 30%
b. Her cost of living is affected by high inflation in the neighborhood
c. Her mortgage payments and necessities are fixed
d. Her discretionary income and salary are equally volatile
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