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Question 1 If a bond is purchased at a price below the face value, the yield to maturity is: greater than the stated interest rate. the same as the stated interest rate. less than the stated interest rate. zero. of no significance. Question 2 A long-term technique used by investors who purchase an equal dollar amount of the same stock at equal intervals in time is called: dollar cost averaging. dividend reinvestment plan. buy and hold technique. regulated transaction. secured transaction. Question 3 A stock that sells for less than $1 per share is called a: fractional stock. penny stock. dollar stock. ten-dollar stock. bad investment. Question 4 Which one of the following expenditures for retirees is likely to decrease? clothing expenses insurance expenses medical expenses expenses for leisure activities gifts and contributions Question 5 During your retirement, your employer's health insurance plan and Medicare will cover your medical expenses. false true Question 6 What is likely to be an individual's single biggest asset? Their automobile Their jewelry Their bank account Their home None of the choices Question 7 With an open-end credit, you pay back one-time loans in a specified period of time in equal amounts. false true Question 8 Which of the following is most likely not a valid reason for using credit? Borrowing for a stay in a hospital because of appendicitis Borrowing to purchase a car so that you can go to work full time Borrowing to buy a printer for your home office now because you now it will be twice as expensive in two years Borrowing to pay for your expensive dinner and movie every week All of the choices are valid reasons for using credit Question 9 Gordon Carey uses his Visa card to purchase a new digital camera and lens. What type of credit did Gordon use? Installment sales credit Installment cash credit Single lump sum credit Revolving credit Incidental credit Question 10 For most mtual funds, the net asset value is calculated:yearly. quarterly. weekly. daily. whenever an investor calls and requests a price quote. Question 11 Which of the following is an advantage of an exchange traded fund (EFT)? No minimum investment amount Shares can be bought and sold through a broker at any time at the current price Management fees are often lower Can use limit orders to purchase EFTs All of the choices are advantages of EFTs Question 12 For a mutual fund, the turnover ratio measures: the length of time a manager has been in charge of the fund. the amount of profit the fund earns from one investment period to the next. the number of months the average investor holds the fund before selling. the percentage of a fund's holdings that have changed during a 12-month period. the percentage of institutional investors who own the fund. Question 13 Grady Perdue has assets worth $1,500,000 and has written a legal document that specifies that all of his money go to his children. After he dies, there is a legal process to determine whether his document specifying how his assets be divided is valid. This is also the legal process by which his executor manages and distributes his property. What is this legal process called? An estate A will A trust Probate None of the choices Question 14 A trust established by your will that becomes effective upon your death is called a(n) ____________ trust. testamentary living revocable irrevocable insurance Question 15 A legal document authorizing someone to act on your behalf is called a: codicil. rider. power of attorney. trustor. proxy. Question 16 A prime reason for buying an annuity is to: save money for college education start a new business accumulate funds to invest in stocks give you retirement income for the rest of your life get rich quick Question 17 Who has the greatest need for life insurance? households with small children singles living alone singles living with parents dual income couple children Question 18 Jerry Lewis is thinking about purchasing some life insurance. He goes to a company that is owned by shareholders. What type of life insurance company has he gone to? A stock life insurance company A debt life insurance company A mutual life insurance company An exclusionary life insurance company None of the choices Question 19 Automobile liability insurance covers the insured when he or she is held responsible for losses suffered by others. True False Question 20 In times of high inflation, personal incomes generally keep up with the rate of inflation. True False Question 21 Similar to corporate shareholders, holders of mutual funds have a say in running the company, since they have equity interest in the pool of assets and a residual claim on the profits. True False Question 22 Savings is the accumulation of excess funds by intentionally spending less than you earn. True False Question 23 A business cycle is a pattern of economic activity that includes an expansion, peak, contraction, and trough.True False . Question 24 High-demand occupations tend to pay low salaries. True False . Question 25 The most expensive loans are available from: parents. friends. banks. finance companies. credit unions. Question 26 Frank Wert wants to get a lower interest rate on his loan for the purchase of a new boat. He uses the boat as collateral for the loan. In which way is Frank reducing his lender's risk? He is sharing the interest rate risk with his lender He is pledging valuable assets that can be seized if the loan is not repaid He is taking a larger stake in the asset he is purchasing He is repaying the loan over a faster period of time None of the choices Question 27 There are no costs involved in filing for a bankruptcy. false true . Question 28 Kevin Brown rides his bicycle to work so that he doesn't have to worry about getting in a car accident. How is Kevin managing his risk? Answer Risk Avoidance Risk Reduction Risk Assumption Risk Shifting Risk Creation .Question 29 Negligence refers to: Answer failure to take ordinary and reasonable care. cancellation of insurance. property damage. high risk insurance coverage. common hazards in our society. . Question 30 Using a home security system is an example of ____________ risk. Answer shifting accepting reducing sharing transferring
Your firm has an average collection period of 23 days. Current practice is to factor all receivables immediately at a 1.30 percent discount. What is the effective cost of borrowing in this case?
List the dollar amount of debt Disney proposed to sell to the public. Indicate whether this amount has increased or decreased from 2008 to 2010. Discuss some potential causes of this increase or decrease.
suppose that it is january 2. during the next three years economists project that inflation will be 3 percent 4 percent
Given the following information, leverage will add how much value to the unlevered firm per dollar of debt? Corporate tax rate: 30% Personal tax rate on income from bonds: 20% Personal tax rate on income from stocks: 0%
Otobai Company in Osaka, Japan is considering the introduction of an electrically powered motor scooter for city use.
question 1 calculate the accumulated value s of an ordinary annuity consisting of 12 annual payments if the first 6
What is the price-earnings ratio of the company? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
erron corporation wants to issue five-year notes but investors require a credit risk spread of 3 percentage points.
use of excess cash another option usually available is to reduce the firms outstanding debt. what are the advantages
If a new technologist aide is hired, what is the monthly patient volume needed at the original reimbursement rate to cover variable costs, but not profit?.
Evaluate the cost of common equity using CAPM formula and hired you as a consultant to help them estimate its cost of capital
What are the three parts of a wait-line system
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