Financial literacy
81314 questions • Page 1411 / 1627
Which of the following statements is CORRECT? The most important difference betw
Which of the following statements is CORRECT? The most important difference between spotmarkets versus futures markets is the maturity of the instrumentsthat are traded. Spot mark…
Which of the following statements is CORRECT? The shorter a project\'s payback p
Which of the following statements is CORRECT? The shorter a project's payback period, the less desirable the project is normally considered to be by this criterion. One drawback o…
Which of the following statements is CORRECT? The term \"IPO\" stands for Introd
Which of the following statements is CORRECT? The term "IPO" stands for Introductory Price Offered, and it is the price at which shares of a new company are offered to the public.…
Which of the following statements is CORRECT? The time to maturity does not affe
Which of the following statements is CORRECT? The time to maturity does not affect the change in the value of a bond in response to a given change in interest rates. You hold two …
Which of the following statements is CORRECT? The value of operations of a stock
Which of the following statements is CORRECT? The value of operations of a stock is the present value of all expected future free cash flows, discounted at the free cash flow grow…
Which of the following statements is CORRECT? Well designed bond covenants are u
Which of the following statements is CORRECT? Well designed bond covenants are useful for reducing agency conflicts between stockholders and managers. The bid price in a hostile t…
Which of the following statements is CORRECT? When calculating the cost of debt,
Which of the following statements is CORRECT? When calculating the cost of debt, a company needs to adjust for taxes, because interest payments are deductible by the paying corpor…
Which of the following statements is CORRECT? Why? a. If Mutual Fund A held equa
Which of the following statements is CORRECT? Why? a. If Mutual Fund A held equal amounts of 100 stocks, each of which had a beta of 1.0, and Mutual Fund B held equal amounts of 1…
Which of the following statements is CORRECT? Why? a. One disadvantage of divide
Which of the following statements is CORRECT? Why? a. One disadvantage of dividend reinvestment plans is that they increase transactions costs for investors who want to increase t…
Which of the following statements is CORRECT? Why? a. When firms are deciding on
Which of the following statements is CORRECT? Why? a. When firms are deciding on the size of stock splits --say whether to declare a 2-for-1 split or a 3-for-1 split, it is best t…
Which of the following statements is CORRECT? You hold two bonds, a 10-year, zer
Which of the following statements is CORRECT? You hold two bonds, a 10-year, zero coupon, issue and a 10-year bond that pays a 6% annual coupon. The same market rate, 6% applies t…
Which of the following statements is CORRECT? a) If a bond is selling at a disco
Which of the following statements is CORRECT? a) If a bond is selling at a discount, the yield to call is a better measure of return than is the yield to maturity. b) On an expect…
Which of the following statements is CORRECT? a. A big advantage of preferred st
Which of the following statements is CORRECT? a. A big advantage of preferred stock is that dividends on preferred stocks are tax deductible by the issuing corporation. b. Preferr…
Which of the following statements is CORRECT? a. A bond is likely to be called i
Which of the following statements is CORRECT? a. A bond is likely to be called if its coupon rate is below its YTM. b. A bond is likely to be called if its market price is below i…
Which of the following statements is CORRECT? a. A bond is likely to be called i
Which of the following statements is CORRECT? a. A bond is likely to be called if its coupon rate is below its YTM. b. A bond is likely to be called if its market price is below i…
Which of the following statements is CORRECT? a. A good example of a sunk cost i
Which of the following statements is CORRECT? a. A good example of a sunk cost is a situation where a bank opens a new office, and that new office leads to a decline in deposits o…
Which of the following statements is CORRECT? a. A graph of the SML as applied t
Which of the following statements is CORRECT? a. A graph of the SML as applied to individual stocks would show required rates of return on the vertical axis and standard deviation…
Which of the following statements is CORRECT? a. A major disadvantage of financi
Which of the following statements is CORRECT? a. A major disadvantage of financing with preferred stock is that preferred stockholders typically have supernormal voting rights. b.…
Which of the following statements is CORRECT? a. A sunk cost is any cost that mu
Which of the following statements is CORRECT? a. A sunk cost is any cost that must be expended in order to complete a project and bring it into operation. b. A sunk cost is a …
Which of the following statements is CORRECT? a. A sunk cost is any cost that mu
Which of the following statements is CORRECT? a. A sunk cost is any cost that must be expended in order to complete a project and bring it into operation. b. A sunk cost is a …
Which of the following statements is CORRECT? a. A warrant is basically a long-t
Which of the following statements is CORRECT? a. A warrant is basically a long-term option that enables the holder to sell common stock back to the firm at an agreed upon …
Which of the following statements is CORRECT? a. Accounts receivable are reporte
Which of the following statements is CORRECT? a. Accounts receivable are reported as a current liability on the balance sheet. b. If a company issues new long-term bonds to purcha…
Which of the following statements is CORRECT? a. Accounts receivable are reporte
Which of the following statements is CORRECT? a. Accounts receivable are reported as a current liability on the balance sheet. b. If a company issues new long-term bonds to purcha…
Which of the following statements is CORRECT? a. All else equal, a bond that has
Which of the following statements is CORRECT? a. All else equal, a bond that has a coupon rate of 10% will sell at a discount if the required return for bonds of similar risk is 8…
Which of the following statements is CORRECT? a. All else equal, an increase in
Which of the following statements is CORRECT? a. All else equal, an increase in interest rates will have a greater effect on higher-coupon bonds than it will have on lower-coupon …
Which of the following statements is CORRECT? a. All else equal, an increase in
Which of the following statements is CORRECT? a. All else equal, an increase in interest rates will have a greater effect on higher-coupon bonds than it will have on lower-coupon …
Which of the following statements is CORRECT? a. An estimate of a stock’s “true”
Which of the following statements is CORRECT? a. An estimate of a stock’s “true” value based on accurate risk and return data is the “market” value of stock. b. The stock value ba…
Which of the following statements is CORRECT? a. An example of an externality is
Which of the following statements is CORRECT? a. An example of an externality is a situation where a bank opens a new office, and that new office causes deposits in the ba…
Which of the following statements is CORRECT? a. An increase in the risk-free ra
Which of the following statements is CORRECT? a. An increase in the risk-free rate will normally lower the marginal costs of both debt and equity financing. b. WACC calculations s…
Which of the following statements is CORRECT? a. An investor can eliminate virtu
Which of the following statements is CORRECT? a. An investor can eliminate virtually all diversifiable risk if he or she holds a very large, well-diversified portfolio of stocks. …
Which of the following statements is CORRECT? a. An investor can eliminate virtu
Which of the following statements is CORRECT? a. An investor can eliminate virtually all diversifiable risk if he or she holds a very large, well-diversified portfolio of stocks. …
Which of the following statements is CORRECT? a. As they are generally defined,
Which of the following statements is CORRECT? a. As they are generally defined, money market transactions involve debt securities with maturities of less than one year. b. Only in…
Which of the following statements is CORRECT? a. Assume that two bonds have equa
Which of the following statements is CORRECT? a. Assume that two bonds have equal maturities and are of equal risk, but one bond sells at par while the other sells at a premium ab…
Which of the following statements is CORRECT? a. Assume that two bonds have equa
Which of the following statements is CORRECT? a. Assume that two bonds have equal maturities and are of equal risk, but one bond sells at par while the other sells at a premium ab…
Which of the following statements is CORRECT? a. Attorney fees are generally inv
Which of the following statements is CORRECT? a. Attorney fees are generally involved when a company develops its charter and bylaws, but since these documents are voluntary, a ne…
Which of the following statements is CORRECT? a. Because long-term bonds are ris
Which of the following statements is CORRECT? a. Because long-term bonds are riskier than short-term bonds, yields on long-term Treasury bonds will always be higher than yields on…
Which of the following statements is CORRECT? a. Because of their simplified org
Which of the following statements is CORRECT? a. Because of their simplified organization, it is easier for proprietors and partnerships to raise large amounts of outside capital …
Which of the following statements is CORRECT? a. Call options generally sell at
Which of the following statements is CORRECT? a. Call options generally sell at a price greater than their exercise value, and the greater the exercise value, the higher the…
Which of the following statements is CORRECT? a. Cannibalization, as described i
Which of the following statements is CORRECT? a. Cannibalization, as described in the text, is a type of externality that is not against the law, and any harm it causes is done to…
Which of the following statements is CORRECT? a. Cannibalization, as described i
Which of the following statements is CORRECT? a. Cannibalization, as described in the text, is a type of externality that is not against the law, and any harm it causes is done to…
Which of the following statements is CORRECT? a. Cannibalization, as described i
Which of the following statements is CORRECT? a. Cannibalization, as described in the text, is a type of externality that is not against the law, and any harm it causes is done to…
Which of the following statements is CORRECT? a. Cannibalization, as described i
Which of the following statements is CORRECT? a. Cannibalization, as described in the text, is a type of externality that is not against the law, and any harm it causes is done to…
Which of the following statements is CORRECT? a. Cannibalization, as described i
Which of the following statements is CORRECT? a. Cannibalization, as described in the text, is a type of externality that is not against the law, and any harm it causes is done to…
Which of the following statements is CORRECT? a. Capital markets deal only with
Which of the following statements is CORRECT? a. Capital markets deal only with common stocks and other equity securities. b. The New York Stock Exchange is an auction market, and…
Which of the following statements is CORRECT? a. Corporations face fewer regulat
Which of the following statements is CORRECT? a. Corporations face fewer regulations than proprietorships. b. It is generally less expensive to form a corporation than a proprieto…
Which of the following statements is CORRECT? a. Corporations generally face few
Which of the following statements is CORRECT? a. Corporations generally face fewer regulations than sole proprietorships. b. Corporate shareholders are exposed to unlimited liabil…
Which of the following statements is CORRECT? a. Depreciation and amortization a
Which of the following statements is CORRECT? a. Depreciation and amortization are not cash charges, so neither of them has an effect on a firm's reported profits. b. The m…
Which of the following statements is CORRECT? a. Depreciation is included in the
Which of the following statements is CORRECT? a. Depreciation is included in the estimate of cash flows (Cash flow = Net income + Depreciation), hence depreciation is set forth on…
Which of the following statements is CORRECT? a. Firms whose fixed assets are \"
Which of the following statements is CORRECT? a. Firms whose fixed assets are "lumpy" frequently have excess capacity, and this should be accounted for in the financial forecastin…
Which of the following statements is CORRECT? a. For a given firm, its debenture
Which of the following statements is CORRECT? a. For a given firm, its debentures are likely to have a lower yield to maturity than its mortgage bonds. b. When large firms are in …
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