Question 1

A proprietorship or partnership can raise funds for expansion in all of the following ways except

Accepted Answer

A)  borrowing from someone or an institution willing to lend the funds. 
B)  reinvesting profit back into the business. 
C)  taking on a partner or more partners. 
D)  issuing stock through financial markets. 
A)  borrowing from someone or an institution willing to lend the funds. 
B)  reinvesting profit back into the business. 
C)  taking on a partner or more partners. 
D)  issuing stock through financial markets.

Question 2

A firm's accounting profit is also its

Accepted Answer

A)  economic profit. 
B)  income statement. 
C)  net income. 
D)  statement of liabilities. 
A)  economic profit. 
B)  income statement. 
C)  net income. 
D)  statement of liabilities.

Question 3

Mortgages issued to borrowers whose credit histories include failures to make payments on bills are known as ________ mortgages.

Accepted Answer

A)  catastrophic 
B)  variable rate 
C)  subprime 
D)  Alt-A 
A)  catastrophic 
B)  variable rate 
C)  subprime 
D)  Alt-A

Question 4

How does the principal-agent problem extend to managers and employees?

Accepted Answer

Just as corporate shareholders (owners)c

Question 5

If you own a $1,000 face value bond with one year remaining to maturity and a five percent coupon rate and new bonds are paying 12 percent,what is the most you can get for your old bond?

Accepted Answer

A)  $1,120 
B)  $1,000 
C)  $937.50 
D)  impossible to determine without additional information 
A)  $1,120 
B)  $1,000 
C)  $937.50 
D)  impossible to determine without additional information

Question 6

Eighty-five percent of all firms employ ________ workers.

Accepted Answer

A)  only one or two 
B)  fewer than 20 
C)  50 or more 
D)  over 100 
A)  only one or two 
B)  fewer than 20 
C)  50 or more 
D)  over 100

Question 7

If a dollar a year from now will likely have less purchasing power because of inflation,then a dollar today ________ a dollar a year from now.

Accepted Answer

A)  is more valuable than 
B)  is less valuable than 
C)  has the same value as 
D)  may be more valuable or less valuable than 
A)  is more valuable than 
B)  is less valuable than 
C)  has the same value as 
D)  may be more valuable or less valuable than

Question 8

Define a corporation.

Accepted Answer

A corporation is a legal form

Question 9

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 10

Members of management serving on the board of directors of a corporation are referred to as outside directors.

Accepted Answer

A) True 
 B)False

Question 11

Mortgages issued to borrowers who fail to document that their incomes are high enough to afford their mortgage payments are known as ________ mortgages.

Accepted Answer

A)  subprime 
B)  Alt-A 
C)  gray market 
D)  reciprocal 
A)  subprime 
B)  Alt-A 
C)  gray market 
D)  reciprocal

Question 12

If you own a $1,000 face value bond with one year remaining to maturity and a 3 percent coupon rate and new bonds are paying 14 percent,what is the most you can get for your old bond?

Accepted Answer

A)  $903.51 
B)  $997.19 
C)  $1,000 
D)  $1,140 
A)  $903.51 
B)  $997.19 
C)  $1,000 
D)  $1,140

Question 13

What is the Congressional act,enacted in 1933 and repealed in 1999,which prevented financial firms from being both commercial banks and investment banks?

Accepted Answer

A)  the Sarbanes-Oxley Act 
B)  the Glass-Steagall Act 
C)  the Taft-Hartley Act 
D)  the Cellar-Kefauver Act 
A)  the Sarbanes-Oxley Act 
B)  the Glass-Steagall Act 
C)  the Taft-Hartley Act 
D)  the Cellar-Kefauver Act

Question 14

When the coupon rate on newly issued bonds increases 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 less 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 less than their face value.

Question 15

On average,jobs at small firms pay ________ wages than jobs at large firms and are ________ likely to offer fringe benefits such as health insurance and retirement accounts.

Accepted Answer

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

Question 16

Sole proprietorships are ________ type of business.

Accepted Answer

A)  the most profitable 
B)  the least common 
C)  the most common 
D)  the least risky 
A)  the most profitable 
B)  the least common 
C)  the most common 
D)  the least risky

Question 17

The value you give today to money you will receive in the future is called the future payment's

Accepted Answer

A)  time-sensitive value. 
B)  future value. 
C)  present value. 
D)  historical value. 
A)  time-sensitive value. 
B)  future value. 
C)  present value. 
D)  historical value.

Question 18

In August 2011,Standard & Poor's (S&P)changed its rating on U.S.Treasury bonds from ________ based on the state of the federal government's budget deficit.

Accepted Answer

A)  "A" to "D" 
B)  "A" to "AAA" 
C)  "A+" to "B+" 
D)  "AAA" to "AA+" 
A)  "A" to "D" 
B)  "A" to "AAA" 
C)  "A+" to "B+" 
D)  "AAA" to "AA+"

Question 19

Which of the following is not an advantage of starting a new business as a corporation?

Accepted Answer

A)  separation of ownership and business liability 
B)  enhanced ability to raise funds 
C)  ability to share risks 
D)  possibility of double taxation 
A)  separation of ownership and business liability 
B)  enhanced ability to raise funds 
C)  ability to share risks 
D)  possibility of double taxation

Question 20

Abercrombie & Fitch wants to raise $8 million to finance the construction of a new store,and the company wishes to raise the funds through direct finance.Which of the following methods could it use?

Accepted Answer

A)  It could sell $8 million in bonds. 
B)  It could borrow $8 million from a bank. 
C)  It could issue $8 million in stocks. 
D)  It could choose either A or C. 
A)  It could sell $8 million in bonds. 
B)  It could borrow $8 million from a bank. 
C)  It could issue $8 million in stocks. 
D)  It could choose either A or C.

A proprietorship or partnership can raise funds for expansion in all of the following ways except

A firm's accounting profit is also its

Mortgages issued to borrowers whose credit histories include failures to make payments on bills are known as ________ mortgages.

How does the principal-agent problem extend to managers and employees?

If you own a $1,000 face value bond with one year remaining to maturity and a five percent coupon rate and new bonds are paying 12 percent,what is the most you can get for your old bond?

Eighty-five percent of all firms employ ________ workers.

If a dollar a year from now will likely have less purchasing power because of inflation,then a dollar today ________ a dollar a year from now.

Define a corporation.

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

Members of management serving on the board of directors of a corporation are referred to as outside directors.

Mortgages issued to borrowers who fail to document that their incomes are high enough to afford their mortgage payments are known as ________ mortgages.

If you own a $1,000 face value bond with one year remaining to maturity and a 3 percent coupon rate and new bonds are paying 14 percent,what is the most you can get for your old bond?

What is the Congressional act,enacted in 1933 and repealed in 1999,which prevented financial firms from being both commercial banks and investment banks?

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

On average,jobs at small firms pay wages than jobs at large firms and are likely to offer fringe benefits such as health insurance and retirement accounts.

Sole proprietorships are ________ type of business.

The value you give today to money you will receive in the future is called the future payment's

In August 2011,Standard & Poor's (S&P)changed its rating on U.S.Treasury bonds from ________ based on the state of the federal government's budget deficit.

Which of the following is not an advantage of starting a new business as a corporation?

Abercrombie & Fitch wants to raise $8 million to finance the construction of a new store,and the company wishes to raise the funds through direct finance.Which of the following methods could it use?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

Externalities, environmental Policy, and Public Goods

Elasticity: The Responsiveness of Demand and Supply

The Economics of Health Care

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice,taxes,and the Distribution of Income

Filters

Exam 8: Firms, the Stock Market, and Corporate Governance

A proprietorship or partnership can raise funds for expansion in all of the following ways except

A firm's accounting profit is also its

Mortgages issued to borrowers whose credit histories include failures to make payments on bills are known as ________ mortgages.

How does the principal-agent problem extend to managers and employees?

If you own a $1,000 face value bond with one year remaining to maturity and a five percent coupon rate and new bonds are paying 12 percent,what is the most you can get for your old bond?

Eighty-five percent of all firms employ ________ workers.

If a dollar a year from now will likely have less purchasing power because of inflation,then a dollar today ________ a dollar a year from now.

Define a corporation.

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

Members of management serving on the board of directors of a corporation are referred to as outside directors.

Mortgages issued to borrowers who fail to document that their incomes are high enough to afford their mortgage payments are known as ________ mortgages.

If you own a $1,000 face value bond with one year remaining to maturity and a 3 percent coupon rate and new bonds are paying 14 percent,what is the most you can get for your old bond?

What is the Congressional act,enacted in 1933 and repealed in 1999,which prevented financial firms from being both commercial banks and investment banks?

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

On average,jobs at small firms pay ________ wages than jobs at large firms and are ________ likely to offer fringe benefits such as health insurance and retirement accounts.

Sole proprietorships are ________ type of business.

The value you give today to money you will receive in the future is called the future payment's

In August 2011,Standard & Poor's (S&P)changed its rating on U.S.Treasury bonds from ________ based on the state of the federal government's budget deficit.

Which of the following is not an advantage of starting a new business as a corporation?

Abercrombie & Fitch wants to raise $8 million to finance the construction of a new store,and the company wishes to raise the funds through direct finance.Which of the following methods could it use?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

Externalities, environmental Policy, and Public Goods

Elasticity: The Responsiveness of Demand and Supply

The Economics of Health Care

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice,taxes,and the Distribution of Income

Filters

On average,jobs at small firms pay wages than jobs at large firms and are likely to offer fringe benefits such as health insurance and retirement accounts.