Homework 1.docx - Question 1 0.02 out of 0.02 points The...

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Question 1 0.02 out of 0.02 points The periodic payments on equity securities are called Selected Answer: dividends. Answers: interest payments. dividends. equity shares. stock repurchases. Question 2 0.02 out of 0.02 points Which of the following is NOT a benefit of financial intermediaries? Selected Answer: Their ability to take in large deposits and make small loans. Answers: Their ability to centralize information. Their ability to take in large deposits and make small loans. Their ability to take in short-term deposits and make long-term loans. Their ability to reduce the transactions costs associated with borrowing. Question 3 0.02 out of 0.02 points In the United States, the biggest issuers of equity securities are Selected Answer: business firms. Answers: households. business firms. governments. financial intermediaries. Question 4 0.02 out of 0.02 points Maturity is Selected
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Answer: the length of time until borrowed funds are repaid. Answers: the length of time until borrowed funds are repaid. what happens to a bond as time passes. a situation in which equity becomes worthless. infinite for debt securities. Question 5 0.02 out of 0.02 points In the event that a firm goes bankrupt and is liquidated, who is paid off first, second, and third between workers, debt holders, and stockholders? Selected Answer: (1) workers; (2) debt holders; (3) stockholders Answers: (1) debt holders; (2) workers; (3) stockholders (1) stockholders; (2) workers; (3) debt holders (1) workers; (2) debt holders; (3) stockholders (1) workers; (2) stockholders; (3) debt holders Question 6 0.02 out of 0.02 points Joe E. Conomist purchased 100 shares of stock in the IBM corporation in 2008 for $10,000. In 2011 Joe sells his IBM stock to Sally Forth for $15,000. How does this sale of stock in 2011 affect the IBM corporation? Selected Answer: IBM is unaffected. Answers: IBM makes $5000 in profit. IBM invests $5000 in capital equipment.
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IBM suffers a loss of $5000. IBM is unaffected. Question 7 0.02 out of 0.02 points Suppose the quantity demanded for a security is B D = 150 0.1 b , and the quantity supplied of the security is B S = 50 + 0.1 b , where b is the price of the security in dollars. The equilibrium price of the security is Selected Answer: $50 0.
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