Question 1

Dividends are

Accepted Answer

A)  the interest payments on bonds. 
B)  the principal payments on bonds. 
C)  fixed payments to bondholders. 
D)  payments by a corporation to its shareholders. 
A)  the interest payments on bonds. 
B)  the principal payments on bonds. 
C)  fixed payments to bondholders. 
D)  payments by a corporation to its shareholders.

Question 2

Which of the following is an advantage of starting a new business as a partnership?

Accepted Answer

A)  The owners have limited personal liability. 
B)  Compared to a corporation, a partnership has fewer government rules and regulations to comply with. 
C)  Business profits are not taxed. 
D)  A partnership can easily attain additional funding. 
A)  The owners have limited personal liability. 
B)  Compared to a corporation, a partnership has fewer government rules and regulations to comply with. 
C)  Business profits are not taxed. 
D)  A partnership can easily attain additional funding.

Question 3

In the United States,partnership profits are taxed at the business level and then are taxed again as personal income in the form of dividend payments.

Accepted Answer

A) True 
 B)False

Question 4

Anything of value owned by a person or a firm is

Accepted Answer

A)  an asset. 
B)  a liability. 
C)  an entitlement. 
D)  a durable good. 
A)  an asset. 
B)  a liability. 
C)  an entitlement. 
D)  a durable good.

Question 5

How can a partnership raise funds needed for firm expansion?

Accepted Answer

By retaining earning

Question 6

In a typical year,________ new firms open in the United States.

Accepted Answer

A)  more than 400,000 
B)  more than 1 million 
C)  less than 200,000 
D)  approximately 125,000 
A)  more than 400,000 
B)  more than 1 million 
C)  less than 200,000 
D)  approximately 125,000

Question 7

Sylvia wants to expand her taxidermy business and is going to use profits from the business to do so.This is an example of using ________ for her expansion.

Accepted Answer

A)  direct finance 
B)  indirect finance 
C)  retained earnings 
D)  dividends 
A)  direct finance 
B)  indirect finance 
C)  retained earnings 
D)  dividends

Question 8

Two of the firms involved in the accounting scandals of the early 2000s were

Accepted Answer

A)  Arthur Anderson and NBC. 
B)  Western Digital and General Motors. 
C)  WorldCom and Enron. 
D)  DuPont and Lehman Brothers. 
A)  Arthur Anderson and NBC. 
B)  Western Digital and General Motors. 
C)  WorldCom and Enron. 
D)  DuPont and Lehman Brothers.

Question 9

Of the types of business organizations in the United States,sole proprietorships account for the ________ percentage of firms and the ________ percentage of profits.

Accepted Answer

A)  smallest; smallest 
B)  smallest; largest 
C)  largest; smallest 
D)  largest; largest 
A)  smallest; smallest 
B)  smallest; largest 
C)  largest; smallest 
D)  largest; largest

Question 10

When the coupon rate on newly issued bonds decreases relative to older,outstanding bonds,what happens?

Accepted Answer

A)  The market price of the older bond falls in the secondary market. 
B)  The market price of the older bond rises in the secondary market. 
C)  Older bonds can still be sold at their face value. 
D)  Older bonds will sell for more than their face value. 
A)  The market price of the older bond falls in the secondary market. 
B)  The market price of the older bond rises in the secondary market. 
C)  Older bonds can still be sold at their face value. 
D)  Older bonds will sell for more than their face value.

Question 11

How does the owner of a corporation relate to the business?

Accepted Answer

A)  The owners of the business have a separate legal distinction from the business. 
B)  The owners of the business have no separate legal distinction from the business. 
C)  The personal assets are part of the corporation's assets. 
D)  None of these describe the legal relationship of corporate owners to the business. 
A)  The owners of the business have a separate legal distinction from the business. 
B)  The owners of the business have no separate legal distinction from the business. 
C)  The personal assets are part of the corporation's assets. 
D)  None of these describe the legal relationship of corporate owners to the business.

Question 12

The ________ a corporation keeps to finance future expansion are known as retained earnings.

Accepted Answer

A)  profits 
B)  stock 
C)  dividends 
D)  bonds 
A)  profits 
B)  stock 
C)  dividends 
D)  bonds

Question 13

A bond's coupon payment divided by the bond's ________ is equal to the bond's current yield.

Accepted Answer

A)  face value 
B)  current price 
C)  principal 
D)  interest rate 
A)  face value 
B)  current price 
C)  principal 
D)  interest rate

Question 14

Juliana,Gabrielle,and Marcela want to start a business they are the only owners and the company does not issue stock.The type of business they want to start is a

Accepted Answer

A)  sole proprietorship. 
B)  partnership. 
C)  corporation. 
D)  Any of the above could be correct. 
A)  sole proprietorship. 
B)  partnership. 
C)  corporation. 
D)  Any of the above could be correct.

Question 15

The ability to share work and share risk is an advantage for

Accepted Answer

A)  sole proprietorships and partnerships. 
B)  sole proprietorships. 
C)  sole proprietorships and corporations 
D)  partnerships. 
A)  sole proprietorships and partnerships. 
B)  sole proprietorships. 
C)  sole proprietorships and corporations 
D)  partnerships.

Question 16

Julie is the chief executive officer (CEO)of the Black Gold Corporation and is also on the company's board of directors.Julie is considered ________ of the corporation.

Accepted Answer

A)  a stockholder 
B)  an inside director 
C)  an owner 
D)  an outside director 
A)  a stockholder 
B)  an inside director 
C)  an owner 
D)  an outside director

Question 17

A member of a corporate board of directors that does not have a direct management role in the firm is known as

Accepted Answer

A)  a shareholder. 
B)  an inside director. 
C)  an outside director. 
D)  a corporate governor. 
A)  a shareholder. 
B)  an inside director. 
C)  an outside director. 
D)  a corporate governor.

Question 18

Generally with bond ratings,the lower the rating,the ________ the interest rate an investor will receive and the ________ the the risk that the issuer of the bond will default.

Accepted Answer

A)  higher; higher 
B)  higher; lower 
C)  lower; higher 
D)  lower; lower 
A)  higher; higher 
B)  higher; lower 
C)  lower; higher 
D)  lower; lower

Question 19

If a firm fails to provide investors with at least a normal rate of return

Accepted Answer

A)  it will not be able to remain in business in the long run. 
B)  it will not be able to remain in business in the short run. 
C)  it will shut down in the short run but will be able to remain in business in the long run. 
D)  it will have a positive economic profit but a negative accounting profit. 
A)  it will not be able to remain in business in the long run. 
B)  it will not be able to remain in business in the short run. 
C)  it will shut down in the short run but will be able to remain in business in the long run. 
D)  it will have a positive economic profit but a negative accounting profit.

Question 20

A partnership can raise funds for expansion in which of the following ways?

Accepted Answer

A)  issuing stock through financial markets 
B)  issuing stock through secondary markets 
C)  taking on more partners 
D)  all of the above 
A)  issuing stock through financial markets 
B)  issuing stock through secondary markets 
C)  taking on more partners 
D)  all of the above

Dividends are

Which of the following is an advantage of starting a new business as a partnership?

In the United States,partnership profits are taxed at the business level and then are taxed again as personal income in the form of dividend payments.

Anything of value owned by a person or a firm is

How can a partnership raise funds needed for firm expansion?

In a typical year,________ new firms open in the United States.

Sylvia wants to expand her taxidermy business and is going to use profits from the business to do so.This is an example of using ________ for her expansion.

Two of the firms involved in the accounting scandals of the early 2000s were

Of the types of business organizations in the United States,sole proprietorships account for the percentage of firms and the percentage of profits.

When the coupon rate on newly issued bonds decreases relative to older,outstanding bonds,what happens?

How does the owner of a corporation relate to the business?

The ________ a corporation keeps to finance future expansion are known as retained earnings.

A bond's coupon payment divided by the bond's ________ is equal to the bond's current yield.

Juliana,Gabrielle,and Marcela want to start a business they are the only owners and the company does not issue stock.The type of business they want to start is a

The ability to share work and share risk is an advantage for

Julie is the chief executive officer (CEO)of the Black Gold Corporation and is also on the company's board of directors.Julie is considered ________ of the corporation.

A member of a corporate board of directors that does not have a direct management role in the firm is known as

Generally with bond ratings,the lower the rating,the the interest rate an investor will receive and the the the risk that the issuer of the bond will default.

If a firm fails to provide investors with at least a normal rate of return

A partnership can raise funds for expansion in which of the following ways?

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

Dividends are

Which of the following is an advantage of starting a new business as a partnership?

In the United States,partnership profits are taxed at the business level and then are taxed again as personal income in the form of dividend payments.

Anything of value owned by a person or a firm is

How can a partnership raise funds needed for firm expansion?

In a typical year,________ new firms open in the United States.

Sylvia wants to expand her taxidermy business and is going to use profits from the business to do so.This is an example of using ________ for her expansion.

Two of the firms involved in the accounting scandals of the early 2000s were

Of the types of business organizations in the United States,sole proprietorships account for the ________ percentage of firms and the ________ percentage of profits.

When the coupon rate on newly issued bonds decreases relative to older,outstanding bonds,what happens?

How does the owner of a corporation relate to the business?

The ________ a corporation keeps to finance future expansion are known as retained earnings.

A bond's coupon payment divided by the bond's ________ is equal to the bond's current yield.

Juliana,Gabrielle,and Marcela want to start a business they are the only owners and the company does not issue stock.The type of business they want to start is a

The ability to share work and share risk is an advantage for

Julie is the chief executive officer (CEO)of the Black Gold Corporation and is also on the company's board of directors.Julie is considered ________ of the corporation.

A member of a corporate board of directors that does not have a direct management role in the firm is known as

Generally with bond ratings,the lower the rating,the ________ the interest rate an investor will receive and the ________ the the risk that the issuer of the bond will default.

If a firm fails to provide investors with at least a normal rate of return

A partnership can raise funds for expansion in which of the following ways?

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

Of the types of business organizations in the United States,sole proprietorships account for the percentage of firms and the percentage of profits.

Generally with bond ratings,the lower the rating,the the interest rate an investor will receive and the the the risk that the issuer of the bond will default.