Question 1

Describe the three main options available to a corporation when it needs to raise money so that it can invest in a new product or a new manufacturing technique.

Accepted Answer

The answer of Describe the three main options available to...

Question 2

Which of the following statements is false?

Accepted Answer

Option D is false. Private equity firms do not turn privately held corporations into publicly held corporations. Instead, they invest in and acquire established businesses, often taking them private and transitioning them back to public ownership later on.

Question 3

A person buys a newly issued bond that matures in 6 years with a face value of $1,000 and a coupon rate of 5%.How much money will the bondholder receive in the sixth year?

Accepted Answer

The bond has a face value of $1,000 and a coupon rate of 5%, which means it pays $50 in interest annually (5% x $1,000). Since the bond matures in 6 years, the bondholder will receive the face value of $1,000 plus the final interest payment of $50 in the sixth year, for a total of $1,050. Therefore, choice A is the correct answer.

Question 4

A person buys a newly issued bond that matures in 10 years with a face value of $10,000 and a coupon rate of 4%.How much money will the bondholder receive in the tenth year?

Accepted Answer

The bondholder will receive the face value of $10,000 plus the final coupon payment in the tenth year, which is $400 (4% of $10,000). Therefore, the bondholder will receive a total of $10,400 in the tenth year.

Question 5

Which of the following statements is false?

Accepted Answer

DC) A futures contract actually obligates the owner to buy or sell a commodity at a specified price on a given future date, unlike an option which gives the right but not the obligation.D) The term "stick price" is incorrect; the correct term is "strike price," which is the specified price at which an option gives the owner the right to buy (or sell) a stock.

Question 6

If you thought the share price of a stock was going to rise,would you be more likely to buy a call option or a put option?

Accepted Answer

If you believe the share price of a stock is going to rise, you would buy a call option because a call option gives you the right to purchase the stock at a certain price (strike price) on or before a certain date (expiration date). This means that if the stock price increases above the strike price, you can exercise the call option and buy the stock at a lower price, then sell it on the market at the higher price, making a profit.

Question 7

If you thought the share price of a stock was going to fall,would you be more likely to buy a call option or a put option?

Accepted Answer

If you believe the stock price is going to fall, you would want to buy a put option, which gives you the right to sell the stock at a predetermined price. This would allow you to profit from the stock's decline. A call option, on the other hand, gives you the right to buy the stock at a predetermined price, which would not benefit you if the stock price decreased.

Question 8

Which of the following companies was part of the original Dow Jones Industrial Average?

Accepted Answer

Both the Chicago Gas Company and National Lead Company were part of the original Dow Jones Industrial Average, while General Motors Corp. and AT&T Inc. were added later.

Question 9

-Refer to Exhibit 38-3.Which of the two stocks has a bigger gap between its close price and net earnings per share?

Accepted Answer

The answer of 
-Refer to Exhibit 38-3.Which of the two...

Question 10

Explain the differences between a corporate bond,a municipal bond,and a Treasury bond.Which of these would be the least risky investment,and why?

Accepted Answer

The answer of Explain the differences between a corporate bond,a...

Question 11

What is the Dow Jones Industrial Average (DJIA)? Give a description of why the DJIA was first created,how it is computed,and how it has evolved over time.

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The answer of What is the Dow Jones Industrial Average...

Question 12

You turn to the bond market page of a newspaper and look under the column headed "Bonds" and see that it says,"Gemco 5 3/4 13" this indicates that

Accepted Answer

The answer of You turn to the bond market page...

Quiz 25: The Economic Case for and Against Government: Five Topics Considered

Describe the three main options available to a corporation when it needs to raise money so that it can invest in a new product or a new manufacturing technique.

Which of the following statements is false?

A person buys a newly issued bond that matures in 6 years with a face value of $1,000 and a coupon rate of 5%.How much money will the bondholder receive in the sixth year?

A person buys a newly issued bond that matures in 10 years with a face value of $10,000 and a coupon rate of 4%.How much money will the bondholder receive in the tenth year?

Which of the following statements is false?

If you thought the share price of a stock was going to rise,would you be more likely to buy a call option or a put option?

If you thought the share price of a stock was going to fall,would you be more likely to buy a call option or a put option?

Which of the following companies was part of the original Dow Jones Industrial Average?

-Refer to Exhibit 38-3.Which of the two stocks has a bigger gap between its close price and net earnings per share?

Explain the differences between a corporate bond,a municipal bond,and a Treasury bond.Which of these would be the least risky investment,and why?

What is the Dow Jones Industrial Average (DJIA)? Give a description of why the DJIA was first created,how it is computed,and how it has evolved over time.

You turn to the bond market page of a newspaper and look under the column headed "Bonds" and see that it says,"Gemco 5 3/4 13" this indicates that