The time it takes to double an investment can be estimated by using which of the following?
A) book value
B) the Rule of 72
C) blue-chips
D) dividends
E) market value correct answers B) the Rule of 72
Which of the following statements is true about common stocks as investments?
A) Stocks a...
BUS 100 Final Exam || A Verified A+ Pass.
The time it takes to double an investment can be estimated by using which of the following?
A) book value
B) the Rule of 72
C) blue-chips
D) dividends
E) market value correct answers B) the Rule of 72
Which of the following statements is true about common stocks as investments?
A) Stocks are among the riskiest of all investments.
B) Stocks are most suitable for investors who seek security.
C) Stocks will never become worth less than their purchase price.
D) Stock prices reflect only government action.
E) Stock prices are easily manipulated. correct answers A) Stocks are among the riskiest of all investments.
Which of the following statements is NOT true about dividend payments?
A) Many companies distribute between 30 and 70 percent of their profits to shareholders.
B) Some firms, especially fast-growing companies, do not pay dividends.
C) Many fast-growing companies use cash earnings for expanding the company so that future earnings can grow even faster.
D) During unprofitable years, companies are still required by law to pay dividends to their stockholders.
E) Dividend payments are made to stockholders on a per-share basis. correct answers D) During unprofitable years, companies are still required by law to pay dividends to their stockholders.
Which of the following is an advantage of ETFs over mutual funds?
A) ETFs can be traded throughout the day like a stock.
B) ETFs have high operating expenses.
C) ETFs do not require high initial investments.
D) ETFs are not regulated by the government.
E) ETFs are difficult to sell in a timely manner. correct answers A) ETFs can be traded throughout the day like a stock.
New stocks and bonds are sold in what market?
A) private placement market
B) secondary market
C) primary market
D) tertiary market
E) open market correct answers C) primary market
True/False. An investment bank is a financial institution that specializes in issuing and reselling new securities. correct answers True
Which of the following is a function performed by an investment bank? A) handling a client's portfolio in the secondary market
B) establishing relationships for a client with a commercial bank
C) underwriting purchases of stocks and bonds
D) arranging travel abroad for purchasers of foreign currencies
E) providing insurance services for clients correct answers C) underwriting purchases of stocks and bonds
What is the formula for measuring a firm's working capital?
A) current assets = working capital /current liabilities
B) working capital = current assets - current liabilities
C) current liabilities = current assets + working capital
D) working capital = current assets x current liabilities
E) current liabilities = current assets / working capital correct answers B) working capital = current assets - current liabilities
Which of the following is a formal pledge (an IOU) obligating the issuer to pay interest periodically and repay the principal at maturity (a preset future date) to the lender?
A) commercial bank loan
B) corporate bond
C) mutual fund
D) bond indenture
E) prospectus correct answers B) corporate bond
Which of the following is NOT part of the M-1 supply?
A) currency at hand
B) currency amount of written checks
C) currency available through a debit card
D) currency in checking accounts
E) currency value of time deposits correct answers E) currency value of time deposits
Which of the following is NOT part of the M-2 money supply?
A) debit card account
B) time deposits
C) money market mutual funds
D) savings account
E) credit card account correct answers E) credit card account
Which of the following financial institutions are considered to be owned by their depositors?
A) commercial banks and savings and loan associations
B) savings and loan associations and mutual savings banks
C) mutual savings banks and credit unions
D) credit unions and pension funds
E) pension funds and savings institutions correct answers C) mutual savings banks and credit unions
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