Question 1

The interest payment on a bond is called

Accepted Answer

A) the coupon payment. 
B) principal. 
C) the interest rate. 
D) the face value. 
A) the coupon payment. 
B) principal. 
C) the interest rate. 
D) the face value.

Question 2

The financial statement that sums up a firm's revenues,costs,and profit over a period of time is its

Accepted Answer

A) income statement. 
B) balance sheet. 
C) dividend yield statement. 
D) price-earnings statement. 
A) income statement. 
B) balance sheet. 
C) dividend yield statement. 
D) price-earnings statement.

Question 3

What is a primary market?

Accepted Answer

A) a market where primary inputs like steel are sold 
B) a market where you can sell any bonds you own as a private investor 
C) a market where a newly issued claims are sold to initial buyers by the borrowing firm 
D) a market where you can sell any stocks you own as a private investor 
A) a market where primary inputs like steel are sold 
B) a market where you can sell any bonds you own as a private investor 
C) a market where a newly issued claims are sold to initial buyers by the borrowing firm 
D) a market where you can sell any stocks you own as a private investor

Question 4

How do unlimited and limited liability differ?

Accepted Answer

Unlimited liability means that

Question 5

The way in which a corporation is structured and the impact a corporation's structure has on the firm's behavior is referred to as

Accepted Answer

A) corporate taxation. 
B) structure composition theory. 
C) structural behavior. 
D) corporate governance. 
A) corporate taxation. 
B) structure composition theory. 
C) structural behavior. 
D) corporate governance.

Question 6

Stockholders

Accepted Answer

A) are liable for the debts of a corporation. 
B) are the owners of a corporation. 
C) control a corporation's day-to-day activities. 
D) hire the managers of a corporation. 
A) are liable for the debts of a corporation. 
B) are the owners of a corporation. 
C) control a corporation's day-to-day activities. 
D) hire the managers of a corporation.

Question 7

In October 2013,Abercrombie & Fitch (ANF)posted a price-earnings ratio of 13.If the price of the stock at that time was $36 per share,which of the following must have been true?

Accepted Answer

A) ANF's revenues that month were $4.68 million. 
B) ANF's earnings per share was $2.77. 
C) ANF's coupon payment was $23.23 per year. 
D) ANF's dividend yield for the year was 47%. 
A) ANF's revenues that month were $4.68 million. 
B) ANF's earnings per share was $2.77. 
C) ANF's coupon payment was $23.23 per year. 
D) ANF's dividend yield for the year was 47%.

Question 8

How is accounting profit found?

Accepted Answer

Accounting profit eq

Question 9

Define a partnership.

Accepted Answer

A partnership is a f

Question 10

Explain what potential conflict exists between shareholders in a corporation and the corporation's managers.

Accepted Answer

The "principal-agent problem" exists any

Question 11

You have a bond that pays $60 per year in coupon payments.Which of the following would result in an increase in the price of your bond?

Accepted Answer

A) Coupon payments on newly-issued bonds rise to $80 per year. 
B) The likelihood that the firm issuing your bond will default on debt increases. 
C) The price of a share of stock in the company falls. 
D) Coupon payments on newly-issued bonds fall to $50 per year. 
A) Coupon payments on newly-issued bonds rise to $80 per year. 
B) The likelihood that the firm issuing your bond will default on debt increases. 
C) The price of a share of stock in the company falls. 
D) Coupon payments on newly-issued bonds fall to $50 per year.

Question 12

How do a sole proprietorship and a corporation differ?

Accepted Answer

A) Proprietorships have unlimited liability while corporations have limited liability. 
B) Corporations can issue stocks and bonds, while proprietorships cannot. 
C) Corporations face more taxes than do proprietorships. 
D) All of these are differences between the two types of businesses. 
A) Proprietorships have unlimited liability while corporations have limited liability. 
B) Corporations can issue stocks and bonds, while proprietorships cannot. 
C) Corporations face more taxes than do proprietorships. 
D) All of these are differences between the two types of businesses.

Question 13

Organizing a successful firm in a market economy has become ________ over the last century.

Accepted Answer

A) legally impossible 
B) politically impossible 
C) less difficult 
D) more difficult 
A) legally impossible 
B) politically impossible 
C) less difficult 
D) more difficult

Question 14

Which of the following must a firm in a market economy do today to succeed?

Accepted Answer

A) Produce the goods and services that consumers want at a lower cost than consumers themselves can produce. 
B) Organize the factors of production into a functioning, efficient unit. 
C) Have access to sufficient funds. 
D) Market firms today must do all of these things. 
A) Produce the goods and services that consumers want at a lower cost than consumers themselves can produce. 
B) Organize the factors of production into a functioning, efficient unit. 
C) Have access to sufficient funds. 
D) Market firms today must do all of these things.

Question 15

How can a sole proprietorship raise funds needed for firm expansion?

Accepted Answer

By retaining earning

Question 16

What is the most common type of business?

Accepted Answer

A) corporation 
B) partnership 
C) sole proprietorship 
D) They are equally represented because of Federal laws. 
A) corporation 
B) partnership 
C) sole proprietorship 
D) They are equally represented because of Federal laws.

Question 17

As a business type,corporations ________ in the United States.

Accepted Answer

A) earn the majority of profits 
B) are the most common 
C) are the least common 
D) are subject to the least amount of taxes 
A) earn the majority of profits 
B) are the most common 
C) are the least common 
D) are subject to the least amount of taxes

Question 18

If a corporation goes bankrupt,bondholders have ________ on the firm's assets.

Accepted Answer

A) no claim 
B) third claim, after the IRS and stockholders 
C) second claim, after stockholders 
D) first claim 
A) no claim 
B) third claim, after the IRS and stockholders 
C) second claim, after stockholders 
D) first claim

Question 19

The coupon rate of a bond is equal to

Accepted Answer

A) the coupon payment. 
B) the interest payment. 
C) the interest rate. 
D) the face value. 
A) the coupon payment. 
B) the interest payment. 
C) the interest rate. 
D) the face value.

Question 20

How can a proprietorship or partnership raise funds for expansion?

Accepted Answer

A) borrow from someone or an institution willing to lend the funds 
B) reinvest profit back into the business 
C) take on a partner or more partners 
D) Any of these would generate funds for expansion. 
A) borrow from someone or an institution willing to lend the funds 
B) reinvest profit back into the business 
C) take on a partner or more partners 
D) Any of these would generate funds for expansion.

The interest payment on a bond is called

The financial statement that sums up a firm's revenues,costs,and profit over a period of time is its

What is a primary market?

How do unlimited and limited liability differ?

The way in which a corporation is structured and the impact a corporation's structure has on the firm's behavior is referred to as

Stockholders

In October 2013,Abercrombie & Fitch (ANF)posted a price-earnings ratio of 13.If the price of the stock at that time was $36 per share,which of the following must have been true?

How is accounting profit found?

Define a partnership.

Explain what potential conflict exists between shareholders in a corporation and the corporation's managers.

You have a bond that pays $60 per year in coupon payments.Which of the following would result in an increase in the price of your bond?

How do a sole proprietorship and a corporation differ?

Organizing a successful firm in a market economy has become ________ over the last century.

Which of the following must a firm in a market economy do today to succeed?

How can a sole proprietorship raise funds needed for firm expansion?

What is the most common type of business?

As a business type,corporations ________ in the United States.

If a corporation goes bankrupt,bondholders have ________ on the firm's assets.

The coupon rate of a bond is equal to

How can a proprietorship or partnership raise funds for expansion?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

Exam 6: Firms, the Stock Market, and Corporate Governance

The interest payment on a bond is called

The financial statement that sums up a firm's revenues,costs,and profit over a period of time is its

What is a primary market?

How do unlimited and limited liability differ?

The way in which a corporation is structured and the impact a corporation's structure has on the firm's behavior is referred to as

Stockholders

In October 2013,Abercrombie & Fitch (ANF)posted a price-earnings ratio of 13.If the price of the stock at that time was $36 per share,which of the following must have been true?

How is accounting profit found?

Define a partnership.

Explain what potential conflict exists between shareholders in a corporation and the corporation's managers.

You have a bond that pays $60 per year in coupon payments.Which of the following would result in an increase in the price of your bond?

How do a sole proprietorship and a corporation differ?

Organizing a successful firm in a market economy has become ________ over the last century.

Which of the following must a firm in a market economy do today to succeed?

How can a sole proprietorship raise funds needed for firm expansion?

What is the most common type of business?

As a business type,corporations ________ in the United States.

If a corporation goes bankrupt,bondholders have ________ on the firm's assets.

The coupon rate of a bond is equal to

How can a proprietorship or partnership raise funds for expansion?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters