Search
Info
Warning
Danger

Study Resources (Business Management)

  416.Explain the major advantages and disadvantages of issuing stock as a source of long-term financing.      417.Discuss the role of investment bankers in the securities markets.        418.Explain the differences between preferred stock and common stock.          .
2 Views
View Answer
    41.If a shortage exists in a market for a good, the price of that good will tend to fall.          42.The point of intersection between the supply and demand curves is called the stress point.          43.In the long run, the market price tends to adjust toward the equilibrium point.          44.Countries that rely on a.
3 Views
View Answer
    11.In developing nations of the world, population has leveled off and is not expected to increase dramatically in the future.          12.Studies about the effects of population growth on the economy are part of macroeconomics.          13.Economic progress can occur when business owners provide jobs and economic growth for their employees, their communities, and.
3 Views
View Answer
    381.Abraham found a $1000 face value bond that belonged to his father. He checked the Wall Street Journal and found the bond was currently selling for $1220. This bond sells at a:    A.discount.   B.premium.   C.price that is overvalued.   D.primary market. A bond selling for more than face value is selling at a premium.       382.The risk associated.
2 Views
View Answer
    71.Cumulative preferred stockholders enjoy the first right to purchase any new shares of stock issued by the firm.          72.Cumulative preferred stockholders enjoy a promise that missed dividends will accumulate and be paid later, before any dividends are paid to common stockholders.          73.Both preferred stocks and bonds represent funding sources that require repayment.
2 Views
View Answer
    True / False Questions  1.America's business success is largely due to an economic and social climate that allows businesses to operate freely.          2.Global economics and politics have no significant influence on businesses in the United States.          3.The study of how society chooses to employ resources to produce goods and services and to distribute.
6 Views
View Answer
    41.The Federal Trade Commission (FTC) regulates the security markets in the United States.          42.Before a corporation's stock can be sold on a major stock exchange, the firm must provide detailed financial information to the Securities and Exchange Commission.          43.Insider trading involves the sale of stock to employees at discounted prices.          44.The Securities and.
2 Views
View Answer
    291.An unsecured bond, backed only by the well-respected name of the organization, is called a _________ bond.    A.mortgage   B.leveraged   C.debenture   D.convertible         292.Corporations issuing ________ bonds pledge a tangible asset as collateral to reduce the risk incurred by a bondholder.    A.secured   B.endorsement   C.escrow   D.replacement         293.Firms establish a ________ so that sufficient funds are available to repay bondholders on the maturity date.    A.mutual.
2 Views
View Answer
    391.Buying several different investment alternatives to spread the risk helps an investor achieve:    A.lower rates of return.   B.lower commission fees.   C.isolation.   D.diversification.         392.____________ means that the mutual fund company does not show a fee or commission for investing in the fund.    A.Front load   B.Back load   C.Double load   D.No load         393._____________ have a set dollar goal the fund manager wants to.
2 Views
View Answer
    371.Which of the following organizations provides an assessment of the relative level of risk of a particular firm's bond issue?    A.The Securities and Exchange Commission   B.E*trade   C.The Wall Street Journal   D.Standard & Poor's         372.Bonds sold at a _______, sell for less than face value.    A.secondary market   B.discount   C.premium   D.date before the maturity date         373.Bonds offering a higher interest rate than.
2 Views
View Answer
    111.Inflation refers to the persistent rise in the purchasing power of money.          112.Disinflation refers to a situation in which prices continue to rise, but not at the rate they were rising previously.          113.Deflation means prices are declining.          114.The consumer price index (CPI) measures what is happening to prices at the wholesale level.          115.The CPI.
3 Views
View Answer
    101.We use indicators such as (1) the gross domestic product (GDP), (2) the interest rate, and (3) the price indexes to measure the health of our economy.          102.The total value of a country's output of final goods and services in a given year is known as the gross domestic product (GDP).          103.As.
3 Views
View Answer
    51.With recent mergers of stock exchanges, beginning with the New York Stock Exchange merger with Archipilago, and subsequently with Euronext and then Deutsche Borse, most exchange floors are symbolic because trades usually take place via computers.    Stock exchange locations still exist, mostly as symbolic gestures. With the merger of major exchanges,.
2 Views
View Answer
    291.When the government runs a continual budget deficit, it increases the:    A.National debt.   B.Balance of payments deficit.   C.Federal capital account.   D.Money supply.         292.In the U.S., the __________ has the role of managing the money supply and interest rates.    A.United States Treasury   B.Federal Reserve Bank   C.State Department   D.Federal Deposit Insurance Corporation         293.One way to lessen the U.S. government budget deficit is.
3 Views
View Answer
    141.Fiscal policy refers to the federal government's efforts to keep the economy stable by controlling the amount of money in circulation.          142.Fiscal policy involves the federal government's efforts to stabilize the economy by increasing or decreasing taxes and/or government spending.          143.When the government attempts to stabilize the economy by changing taxes or.
3 Views
View Answer
    21.Thomas Malthus believed that people in most countries would never be able to achieve high standards of living unless the problems of overpopulation were addressed.    Thomas Malthus viewed rapid population growth as a major problem that would prevent standards of living from rising above subsistence levels. There are still people, called.
3 Views
View Answer
    411.One criticism of the Dow Jones Industrial Average suggests that it:    A.magnifies the fluctuations in the stock market.   B.does not indicate the cause of changes in stock prices.   C.is too small (too few companies) to get a good statistical representation.   D.is biased causing an overstatement of bond price increases and an understatement of stock.
2 Views
View Answer
    301.A convertible bond allows the bondholder to exchange the bond for:    A.preferred stock.   B.common stock.   C.collateral.   D.debt holder privileges. Convertible bonds allow the bondholder to convert the bond into shares of common stock in the issuing company.       302.Seattle Music, Inc. recently offered bonds for sale to the public. The unsecured corporate bond paid interest of 9%.
2 Views
View Answer
    361.Dan wanted to start investing some of his monthly earnings in stocks. He planned to diversify his holdings between blue chips, growth, and income type stocks. After consulting with a financial planner, he now understands the difference between these three types. The difference is:    A.Blue chips are the greatest gamble. They.
2 Views
View Answer
    81.Thanks in part to the Federal Reserve System, few banks failed during the Great Depression.          82.Created during the Great Depression, the federal deposit insurance program resulted in a large number of bank failures.          83.In the 1930s, during the Great Depression, the government started an insurance program to protect the public from bank.
2 Views
View Answer
    21.Institutional investors include insurance companies, individual investors, and mutual funds.          22.Corporations receive needed funds when they sell a new issuance of a security in the primary market.          23.Investors who trade securities, buy securities they are interested in holding or sell securities to make a profit or cut losses by trading in the.
2 Views
View Answer
    91.There is general agreement in the United States on the degree to which the government should be involved in the economy.          92.Subtle differences such as the right to one's religious preference make the command economic system known as communism more like a mixed economy than a socialistic system.    Mixed economies evolve when.
3 Views
View Answer
    11.Issuing bonds is considered debt financing.          12.It is easier for a small business to raise funds through a stock issuance than for a large, well-known company.          13.Before issuing stock or bonds, corporations must meet the disclosure requirements of the Federal Trade Commission (FTC).          14.An investment banking firm assists corporations in selling the new.
2 Views
View Answer
    121.The higher the measurement of productivity, the higher the likely costs of production.          122.An increase in productivity means that a worker is now able to produce more goods and services in the same amount of time.          123.As productivity increases, the cost of producing goods and services is likely to fall.          124.In the service.
3 Views
View Answer
    61.GLAMOR GAL is a popular cosmetics company. Although it is gaining in popularity among younger women, its promotional strategy continues to focus on the shadow-free finish that it produces on almost any skin type. Due to the fact that its industry faces monopolistic competition, the company knows that it must.
3 Views
View Answer
    401.Gerald, a recent graduate of a community college, is about to make his first investment in the stock market. Which of the following would be a cautious way for Gerald to start investing?    A.Future contracts in oil   B.Index funds   C.Short-selling technology stocks   D.Commodity market transactions in precious metals Many investment advisors recommend young investors buy.
2 Views
View Answer
    True / False Questions  1.Economic growth and the creation of jobs depend on the availability of money.          2.Most countries restrict the flow of money in and out of their borders.          3.Economic events in other nations seldom impact the powerful U.S. economy.          4.Barter is the trading of goods and services for other goods and services.          5.Barter.
5 Views
View Answer
    91.During the Civil War, gold and silver coins were hoarded not because of their currency value, but because they were worth more than currency.    By the time of the Civil War, the banking system was a mess. Different banks issued different kinds of currencies. During the Civil War, coins were hoarded.
2 Views
View Answer
    71.Socialists believe that wealth should be more evenly distributed than what actually occurs in a free-market capitalistic system.          72.Workers in socialist countries often get longer vacations and more social benefits than workers in free market economies.          73.Over the past decade, socialist economies have proven to be more successful at creating wealth and.
3 Views
View Answer
    81.A major distinction between capitalism and socialism concerns the distribution of income.    Under capitalism, self-interest is the driving force, so people must be rewarded for what they produce. This can result in unequal distribution of income. Under socialism, the emphasis is on a more equal distribution of income, so those earning.
4 Views
View Answer
  419.The risk/return trade-off is inherent in any investment strategy. What are the five key criteria investors should consider when selecting investment options?      420.Describe four different types of common stock that an investor may consider, depending upon the investor's strategy and risk tolerance.        Multiple Choice Questions  Mini-CasePenny Stock is the chairperson of Pirate Recording.
2 Views
View Answer
    351.The stock of well-known, high quality firms, such as Coca-Cola, General Electric, and Procter & Gamble, fit the characteristics of ________ stocks, because investors can almost always be assured a dividend and consistent stock price appreciation.    A.growth   B.blue chip   C.income   D.callable Blue chip stocks describe the stock of a firm that is considered to be.
2 Views
View Answer
  308.Explain the significance of "price" in a free-market economic system.          309.Identify and describe the 4 basic rights that form the foundation of capitalism.      310.When describing the state of the U.S. economy, reporters often refer to the nation's GDP, its unemployment rate, and the CPI. Explain what each of these terms means and.
3 Views
View Answer
    341.Brokers prefer trading shares of a firm's stock in multiples of 100, known as:    A.margin blocks.   B.odd lots.   C.round lots.   D.market lots.         342.When corporations elect to issue two or more shares of stock to existing stockholders for each share they currently own, they have initiated a(n) ________.    A.stock split   B.dividend spread   C.share dividend   D.earnings split         343.Which of the following describes.
2 Views
View Answer
    31.The most fundamental of all rights in capitalism is the right to private property.          32.Under capitalism, the government prohibits people and businesses from competing with each other.          33.A basic right under capitalism is the right of businesses to receive government funding.          34.Free-market capitalism has made it more difficult for individuals to gain wealth.          35.Due.
3 Views
View Answer
    61.When a corporation enjoys a profitable year, dividends must be paid.          62.Issuing new common stock usually expands ownership, giving all owners the right to vote for the firm's board of directors.          63.Issuing new stock increases the firm's outstanding debt on their balance sheet.          64.If paid, dividends come from any profits remaining after the.
2 Views
View Answer
    321.Another term for portfolio strategy is:    A.modulation model.   B.formula model.   C.allocation model.   D.equity model.         322.When an investor purchases a security, the investor does so with the expectation of:    A.maintaining his or her capital position.   B.minimizing risk.   C.making a profit.   D.providing commissions. Key investment decisions often center on personal objectives such as growth and/or income.       323.On-line trading services target those investors who:    A.require.
2 Views
View Answer
    171.Neo-Malthusians (followers of Thomas Malthus) believe that the solution to poverty is:    A.Increasing the world population.   B.Increasing taxes on the rich and increasing social programs.   C.Birth control.   D.Educating poor people.         172.A key to economic growth and development is to:    A.Locate more deposits of gold and other precious metals.   B.Emphasize a fair and equitable distribution of income.   C.Provide people.
3 Views
View Answer
    51.One strength of a free-market economic system is that it emphasizes the fair and humane treatment of the less fortunate in society.          52.The greed of businesspeople represents one of the greatest dangers to the operation of a free market system.          53.According to the Connecting with Small Business box, small loans do not.
3 Views
View Answer
    281.Which of the following statements about business cycles in the U.S. is most accurate?    A.Business cycles occur precisely every 5 years.   B.Long term business cycles have only two phases—boom and bust.   C.Seasonal business cycles occur within a year.   D.Business cycles are based on theories. Business cycles are the periodic rises and falls that occur in.
3 Views
View Answer
    151.If the government wants to jump-start the economy resulting in more consumer spending, it will raise taxes.    Fiscal policy refers to the federal government's efforts to keep the economy stable by increasing or decreasing taxes or government spending. When the government raises taxes, the result is a tightening of consumer and.
3 Views
View Answer
    101.A saving account is also known as a time deposit.          102.Technically, a bank can require depositors to give prior notice before they withdraw funds from time deposits.          103.Certificates of deposit (CDs) represent demand deposits issued by banks.          104.The Federal Reserve requires that ATM machines be located within 100 yards of a commercial bank.          105.Some.
2 Views
View Answer
  311.Explain the difference between fiscal policy and monetary policy. Discuss how each of these approaches can be used to influence the state of the economy.        Multiple Choice Questions  Mini-CaseGig Abite is a bright, hard-working engineer who once owned a successful engineering consulting firm in his native country of Frinezia. Gig became discouraged.
3 Views
View Answer
    331.The market price of a share of common stock depends heavily on:    A.the number of stocks traded on the New York Stock Exchange.   B.the default rate on U.S. government bonds.   C.the overall performance of the company.   D.the relative value of the U.S. dollar compared to the euro.         332.When an investor sells a security for more.
2 Views
View Answer
    311.The interest rate on a AAA rated government treasury bond is 3.5%. A secured corporate bond is likely to pay:    A.The same as the treasury bond.   B.Less than the treasury bond.   C.More than the treasury bond.   D.The same as the treasury bond, but with a shorter maturity date. The interest paid on U.S. treasury bonds.
2 Views
View Answer
    131.A rising GDP, rising unemployment rate, and rising inflation rate signify a healthy economy.    A rising GDP, declining unemployment rate, and decreasing inflation would signify a healthy economy.       132.A problem with the CPI is that it measures the price changes of only food and clothing, while ignoring what happens to the prices.
3 Views
View Answer