Question 1

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

Accepted Answer

A) produce new or better goods or services 
B) efficiently organize production 
C) produce existing goods and services at a lower cost 
D) Market firms today must do all of these things. 
A) produce new or better goods or services 
B) efficiently organize production 
C) produce existing goods and services at a lower cost 
D) Market firms today must do all of these things. D

Question 2

If the final expressions in a present value equation used to calculate the price of a bond you are considering buying are "[$75 / (1 + .04)6] + [$2,500 / (1 + .04)6]",which of the following is correct?

Accepted Answer

A) The face value is $2,500,the coupon is $75,and the coupon will mature in 4 years. 
B) The face value is $75,the interest rate you need is 1.04 percent,and the coupon will mature in 6 years. 
C) The face value is $2,500,the interest rate you need is 6 percent,and the coupon will mature in 4 years. 
D) The coupon is $75,the interest rate you need is 4 percent,and the coupon will mature in 6 years. 
A) The face value is $2,500,the coupon is $75,and the coupon will mature in 4 years. 
B) The face value is $75,the interest rate you need is 1.04 percent,and the coupon will mature in 6 years. 
C) The face value is $2,500,the interest rate you need is 6 percent,and the coupon will mature in 4 years. 
D) The coupon is $75,the interest rate you need is 4 percent,and the coupon will mature in 6 years. D

Question 3

When Electronic Arts,the company behind the games Zuma and Plants vs.Zombies,sold stock to the public for the first time in September 1989,funds were being raised in a ________ market,and when those newly issued shares are resold to other buyers,the sales take place in a ________ market.

Accepted Answer

A) primary;primary 
B) primary;secondary 
C) secondary;primary 
D) secondary;secondary 
A) primary;primary 
B) primary;secondary 
C) secondary;primary 
D) secondary;secondary B

Question 4

All of the following would be considered explicit costs of operating a business except

Accepted Answer

A) utility expenses. 
B) the cost of raw materials used in production. 
C) the rental value of equipment the company owns and uses for its own production. 
D) advertising expenses. 
A) utility expenses. 
B) the cost of raw materials used in production. 
C) the rental value of equipment the company owns and uses for its own production. 
D) advertising expenses.

Question 5

If a corporate bond with a face value of $1,000 pays yearly coupon payments of $40,what is the coupon rate?

Accepted Answer

A) 2.5% 
B) 4% 
C) 25% 
D) 40% 
A) 2.5% 
B) 4% 
C) 25% 
D) 40%

Question 6

Mortgage-backed securities are groups of mortgages that are bundled together and sold to investors.

Accepted Answer

A) True 
 B)False

Question 7

Securities dealers that trade stocks and bonds ________ comprise the over-the-counter market.

Accepted Answer

A) directly instead of electronically 
B) outside exchanges 
C) that have previously been sold 
D) valued at less than $1 each 
A) directly instead of electronically 
B) outside exchanges 
C) that have previously been sold 
D) valued at less than $1 each

Question 8

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 9

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

Accepted Answer

A) The owners have complete control over the business. 
B) A partnership has few government rules and regulations to comply with. 
C) Business profits are only taxed once,not twice. 
D) A partnership can easily attain additional funding. 
A) The owners have complete control over the business. 
B) A partnership has few government rules and regulations to comply with. 
C) Business profits are only taxed once,not twice. 
D) A partnership can easily attain additional funding.

Question 10

An asset is anything of value owned by a person or firm.

Accepted Answer

A) True 
 B)False

Question 11

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 12

What does it mean to say there is a separation of ownership from control in large corporations?

Accepted Answer

Shares of stock represent partial owners

Question 13

Why do corporate boards of directors sometimes link top managers' compensation to the corporations' stock prices? How might tying compensation too closely to stock prices create an incentive for corporate fraud.

Accepted Answer

Corporate boards of directors sometimes

Question 14

Tommy's Teddy Bears incurs $300,000 per year in explicit costs and $50,000 in implicit costs.The shop earns $600,000 in revenues and has $1.1 million in net worth.Based on this information,what is economic profit for Tommy's Teddy Bears?

Accepted Answer

A) $250,000 
B) $300,000 
C) $500,000 
D) $1.35 million 
A) $250,000 
B) $300,000 
C) $500,000 
D) $1.35 million

Question 15

A sole proprietorship is the type of business that has ________ government rules and regulations affecting it.

Accepted Answer

A) no 
B) the fewest 
C) the most 
D) only federal 
A) no 
B) the fewest 
C) the most 
D) only federal

Question 16

In a partnership,the owners of the business and the business are ________,and in a sole proprietorship,the owner of the business and the business are ________.

Accepted Answer

A) separate legal entities;also separate legal entities 
B) not separate legal entities;also not separate legal entities 
C) not separate legal entities;separate legal entities 
D) separate legal entities;not separate legal entities 
A) separate legal entities;also separate legal entities 
B) not separate legal entities;also not separate legal entities 
C) not separate legal entities;separate legal entities 
D) separate legal entities;not separate legal entities

Question 17

Why do financial markets depend on accurate accounting and disclosure practices?

Accepted Answer

Investors in primary and secondary marke

Question 18

As a result of the 2007-2009 financial crisis,which two firms became bank holding companies,allowing them to engage in commercial banking activities?

Accepted Answer

A) Enron and WorldCom 
B) Freddie Mac and Fannie Mae 
C) Morgan Stanley and Goldman Sachs 
D) Lehman Brothers and Merrill Lynch 
A) Enron and WorldCom 
B) Freddie Mac and Fannie Mae 
C) Morgan Stanley and Goldman Sachs 
D) Lehman Brothers and Merrill Lynch

Question 19

If you own a $1,000 face value bond with one year remaining to maturity and a 7 percent coupon rate and new bonds are paying 11 percent,what is the most you can get for your old bond?

Accepted Answer

A) $1,028.85 
B) $1,000.00 
C) $963.96 
D) $952.30 
A) $1,028.85 
B) $1,000.00 
C) $963.96 
D) $952.30

Question 20

The typical firm in many industries has become ________ over the past 100 years,and efficiently organizing production has become ________.

Accepted Answer

A) larger;more difficult 
B) smaller;more difficult 
C) larger;easier 
D) smaller;easier 
A) larger;more difficult 
B) smaller;more difficult 
C) larger;easier 
D) smaller;easier

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

If the final expressions in a present value equation used to calculate the price of a bond you are considering buying are "[$75 / (1 + .04)6] + [$2,500 / (1 + .04)6]",which of the following is correct?

When Electronic Arts,the company behind the games Zuma and Plants vs.Zombies,sold stock to the public for the first time in September 1989,funds were being raised in a market,and when those newly issued shares are resold to other buyers,the sales take place in a market.

All of the following would be considered explicit costs of operating a business except

If a corporate bond with a face value of $1,000 pays yearly coupon payments of $40,what is the coupon rate?

Mortgage-backed securities are groups of mortgages that are bundled together and sold to investors.

Securities dealers that trade stocks and bonds ________ comprise the over-the-counter market.

Anything of value owned by a person or a firm is

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

An asset is anything of value owned by a person or firm.

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

What does it mean to say there is a separation of ownership from control in large corporations?

Why do corporate boards of directors sometimes link top managers' compensation to the corporations' stock prices? How might tying compensation too closely to stock prices create an incentive for corporate fraud.

Tommy's Teddy Bears incurs $300,000 per year in explicit costs and $50,000 in implicit costs.The shop earns $600,000 in revenues and has $1.1 million in net worth.Based on this information,what is economic profit for Tommy's Teddy Bears?

A sole proprietorship is the type of business that has ________ government rules and regulations affecting it.

In a partnership,the owners of the business and the business are ,and in a sole proprietorship,the owner of the business and the business are .

Why do financial markets depend on accurate accounting and disclosure practices?

As a result of the 2007-2009 financial crisis,which two firms became bank holding companies,allowing them to engage in commercial banking activities?

If you own a $1,000 face value bond with one year remaining to maturity and a 7 percent coupon rate and new bonds are paying 11 percent,what is the most you can get for your old bond?

The typical firm in many industries has become over the past 100 years,and efficiently organizing production has become .

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

The Economics of Health Care

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation,unemployment,and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

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

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

If the final expressions in a present value equation used to calculate the price of a bond you are considering buying are "[$75 / (1 + .04)6] + [$2,500 / (1 + .04)6]",which of the following is correct?

When Electronic Arts,the company behind the games Zuma and Plants vs.Zombies,sold stock to the public for the first time in September 1989,funds were being raised in a ________ market,and when those newly issued shares are resold to other buyers,the sales take place in a ________ market.

All of the following would be considered explicit costs of operating a business except

If a corporate bond with a face value of $1,000 pays yearly coupon payments of $40,what is the coupon rate?

Mortgage-backed securities are groups of mortgages that are bundled together and sold to investors.

Securities dealers that trade stocks and bonds ________ comprise the over-the-counter market.

Anything of value owned by a person or a firm is

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

An asset is anything of value owned by a person or firm.

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

What does it mean to say there is a separation of ownership from control in large corporations?

Why do corporate boards of directors sometimes link top managers' compensation to the corporations' stock prices? How might tying compensation too closely to stock prices create an incentive for corporate fraud.

Tommy's Teddy Bears incurs $300,000 per year in explicit costs and $50,000 in implicit costs.The shop earns $600,000 in revenues and has $1.1 million in net worth.Based on this information,what is economic profit for Tommy's Teddy Bears?

A sole proprietorship is the type of business that has ________ government rules and regulations affecting it.

In a partnership,the owners of the business and the business are ________,and in a sole proprietorship,the owner of the business and the business are ________.

Why do financial markets depend on accurate accounting and disclosure practices?

As a result of the 2007-2009 financial crisis,which two firms became bank holding companies,allowing them to engage in commercial banking activities?

If you own a $1,000 face value bond with one year remaining to maturity and a 7 percent coupon rate and new bonds are paying 11 percent,what is the most you can get for your old bond?

The typical firm in many industries has become ________ over the past 100 years,and efficiently organizing production has become ________.

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

The Economics of Health Care

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation,unemployment,and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

When Electronic Arts,the company behind the games Zuma and Plants vs.Zombies,sold stock to the public for the first time in September 1989,funds were being raised in a market,and when those newly issued shares are resold to other buyers,the sales take place in a market.

In a partnership,the owners of the business and the business are ,and in a sole proprietorship,the owner of the business and the business are .

The typical firm in many industries has become over the past 100 years,and efficiently organizing production has become .