Question 1

Corporations usually employ _____ to help sell their securities in the primary market.

Accepted Answer

A)  investment banking firms
B)  capital budgeters
C)  commercial banks
D)  over-the-counter agencies
E)  stock brokersF) A) and C)
G) None of the above

Question 2

Historically,_____ have been associated with companies in poor financial health and/or startup firms with limited track records.

Accepted Answer

A)  secured bonds
B)  serial bonds
C)  unsecured bonds
D)  junk bonds
E)  floating-rate bondsF) C) and D)
G) D) and E)

Question 3

Which of the following statements is true of the eurodollar market?

Accepted Answer

A)  It refers to any dollar-denominated deposit in a U.S.bank.
B)  It offers risk-free investments as they are backed by the U.S.government.
C)  It is used by companies to invest idle cash in international markets.
D)  It was originally developed by American banks.
E)  It is used to trade the euro in the U.S.markets.F) D) and E)
G) None of the above

Question 4

_____ is the single most important source of capital for most new companies.

Accepted Answer

A)  Commercial paper
B)  Common stock
C)  A floating-rate bond
D)  A Treasury bill
E)  Trade creditF) B) and D)
G) B) and C)

Question 5

Which of the following is called capital in excess of par?

Accepted Answer

A)  The dollar amount printed on the stock certificate
B)  The difference between a stock's par value and its offering price
C)  The price at which the common stock is currently trading
D)  The difference between a stock's par value and its estimated price
E)  The potential price of the common stockF) B) and E)
G) A) and B)

Question 6

If the dividend of a stock is $20 and its price is $4,then its dividend yield is:

Accepted Answer

A)  $2
B)  $8
C)  $5
D)  $1
E)  $3F) A) and B)
G) A) and C)

Question 7

The most widely used source of short-term financing is:

Accepted Answer

A)  an unsecured loan.
B)  a certificate of deposit.
C)  commercial paper.
D)  a Treasury bill.
E)  trade credit.F) B) and C)
G) A) and B)

Question 8

_____ were responsible for the huge increase in stock prices in the period between 1982 and 2000.

Accepted Answer

A)  Manufacturing stocks
B)  Automobile stocks
C)  Banking stocks
D)  Clothing stocks
E)  Technology stocksF) B) and D)
G) B) and E)

Question 9

Which of the following is the most important account payable?

Accepted Answer

A)  Commercial paper
B)  Trade credit
C)  Treasury bills
D)  Commercial certificates of deposit
E)  Marketable securitiesF) A) and D)
G) C) and D)

Question 10

Why do companies use a lockbox?

Accepted Answer

A)  To effectively manage inventory balances
B)  To pay off long-term loans
C)  To manage long-term assets such as plants,building,and equipment
D)  To speed up cash collection from customers
E)  To maintain transaction balancesF) C) and D)
G) A) and B)

Question 11

The board of directors of a leading automobile company wants to opt for an investment project that has the least risk.Which of the following projects is the board most likely to undertake?

Accepted Answer

A)  Introducing a new car in a new market
B)  Expanding their automobile business into a new market
C)  Repairing the old manufacturing equipment
D)  Buying new manufacturing equipment
E)  Adding a new car to their existing line of automobilesF) A) and E)
G) C) and D)

Question 12

The _____ is an analysts' consensus of the potential stock price of a company.

Accepted Answer

A)  market value
B)  par value
C)  target price
D)  beta score
E)  market capF) A) and E)
G) All of the above

Question 13

Astute money managers try to keep just enough cash on hand to pay employee wages and utility bills.This cash is referred to as:

Accepted Answer

A)  long-term assets.
B)  marketable securities.
C)  transaction balances.
D)  retained earnings.
E)  secured bonds.F) B) and C)
G) B) and E)

Question 14

Which of the following is true of a lockbox?

Accepted Answer

A)  It is simply a box allocated to employees for keeping their valuables.
B)  It is simply an address for receiving payments.
C)  It is a box used to maintain transaction balances.
D)  It is a financial instrument used to pay off loans.
E)  It is a financial instrument used to manage long-term assets.F) A) and B)
G) A) and C)

Question 15

_____ is the credit extended by suppliers for the purchase of their goods and services.

Accepted Answer

A)  Commercial paper
B)  Trade credit
C)  Line of credit
D)  Commercial certificate of deposit
E)  Marketable securityF) A) and C)
G) B) and D)

Exam 16: Financial Management and Securities Markets

Which of the following is called capital in excess of par?

Correct Answer
verified

_____ is the credit extended by suppliers for the purchase of their goods and services.

Correct Answer
verified

The board of directors of a leading automobile company wants to opt for an investment project that has the least risk.Which of the following projects is the board most likely to undertake?

Correct Answer
verified

Which of the following is true of a lockbox?

Correct Answer
verified

_____ were responsible for the huge increase in stock prices in the period between 1982 and 2000.

Correct Answer
verified

If the dividend of a stock is $20 and its price is $4,then its dividend yield is:

Correct Answer
verified

Which of the following is the most important account payable?

Correct Answer
verified

_____ is the single most important source of capital for most new companies.

Correct Answer
verified

Historically,_____ have been associated with companies in poor financial health and/or startup firms with limited track records.

Correct Answer
verified

The most widely used source of short-term financing is:

Correct Answer
verified

Corporations usually employ _____ to help sell their securities in the primary market.

Correct Answer
verified

The _____ is an analysts' consensus of the potential stock price of a company.

Correct Answer
verified

Which of the following statements is true of the eurodollar market?

Correct Answer
verified

Astute money managers try to keep just enough cash on hand to pay employee wages and utility bills.This cash is referred to as:

Correct Answer
verified

Why do companies use a lockbox?

Correct Answer
verified

Exam 16: Financial Management and Securities Markets

Which of the following is called capital in excess of par?

Correct AnswerverifiedShow Answer

_____ is the credit extended by suppliers for the purchase of their goods and services.

Correct AnswerverifiedShow Answer

The board of directors of a leading automobile company wants to opt for an investment project that has the least risk.Which of the following projects is the board most likely to undertake?

Correct AnswerverifiedShow Answer

Which of the following is true of a lockbox?

Correct AnswerverifiedShow Answer

_____ were responsible for the huge increase in stock prices in the period between 1982 and 2000.

Correct AnswerverifiedShow Answer

If the dividend of a stock is $20 and its price is $4,then its dividend yield is:

Correct AnswerverifiedShow Answer

Which of the following is the most important account payable?

Correct AnswerverifiedShow Answer

_____ is the single most important source of capital for most new companies.

Correct AnswerverifiedShow Answer

Historically,_____ have been associated with companies in poor financial health and/or startup firms with limited track records.

Correct AnswerverifiedShow Answer

The most widely used source of short-term financing is:

Correct AnswerverifiedShow Answer

Corporations usually employ _____ to help sell their securities in the primary market.

Correct AnswerverifiedShow Answer

The _____ is an analysts' consensus of the potential stock price of a company.

Correct AnswerverifiedShow Answer

Which of the following statements is true of the eurodollar market?

Correct AnswerverifiedShow Answer

Astute money managers try to keep just enough cash on hand to pay employee wages and utility bills.This cash is referred to as:

Correct AnswerverifiedShow Answer

Why do companies use a lockbox?

Correct AnswerverifiedShow Answer

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