Exam 19: Using Securities Markets for Financing and Investing Opportunities

Index funds invest in one specific type of investment; for example, an index fund might only invest in income stocks, companies whose stocks pay dividends.

Par value reflects the current market price for a stock.

Bondholders represent creditors of a firm.

Corporate management decisions are influenced by the desire to keep stockholders happy.

The Federal Trade Commission (FTC) regulates the security markets in the United States.

Recently, Josiah bought a bond with face value of $1,000. He paid $1,150 for the bond. His bond investment undoubtedly pays a higher interest rate than the going rate for similar bonds currently out on the market.

The initial cost of investing in mutual funds depends in part on

Which of these represents a special feature included with some bond issues?

The number of U.S. companies that are listed on foreign stock exchanges is declining.

Maggie owns 10% or 50,000 common shares of a small biotech company. Although she has enjoyed a lot of control, Maggie realizes that in order for the firm to acquire the funds to grow in a recessionary economy, it will need to issue more stock. Unless she and others exercise preemptive rights,

Your company is privately held but needs additional funding for a planned expansion. Having never issued stock to the public, your firm is well advised to seek the assistance of an investment banker prior to an initial public offering of stock.

The investor will receive the face value of the bond on the ________ date.

Penny stocks represent a high-risk stock investment.

The prospectus is summarization of the results of detailed financial documents that a firm files with the SEC prior to being given approval to issue securities.

Firms establish a ________ so that sufficient funds are available to repay bondholders on the maturity date.

Dividends are paid out of a corporation's

Investors trading online

________ stocks represent investments in emerging fields that have the potential to realize better than average increases in the stock's prices.

Buying on margin means you are borrowing part of the value of the stock purchase from the brokerage firm.

Although companies that issue bonds are required to pay interest, companies issuing stock are not required to pay dividends.