PracticeQ - 2039SASDE_2007 Student 1 The primary market refers to A the original sale of securities by the issuer B transactions between two

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2039SASDE_2007 Student: ___________________________________________________________________________ 1. The primary market refers to: A. the original sale of securities by the issuer. B. transactions between two institutional shareholders. C. the sale of securities by an individual shareholder. D. the first trade of a firm's securities when the financial markets open in the morning. E. all transactions on the NYSE. 2. A securities market with a physical location that is designed to match buyers with sellers is called a(n) __________ market. A. dealer B. private C. auction D. franchise E. block sale 3. When a company qualifies to have its securities traded on a particular exchange the stock of that company is said to be __________ with the exchange. A. held B. listed C. scheduled D. organized E. programmed 4. Which one of the following situations is most apt to create an agency problem? A. an employee receives a pay raise based on his or her extraordinary contributions to the firm B. an employee is paid twice the normal wage for working overtime to complete a special project on time for a customer C. a manager is rewarded because the employees in his or her department had no accidents for a year D. a manager receives a bonus because he or she has hired the most new employees in the past year E. the company president receives a bonus based on the profits of the firm
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A. total tax paid divided by the total taxable income. B. tax rate applied to the first dollar of taxable income. C. highest tax rate listed on the latest tax table. D. mean of all tax rates applicable to an individual. E. amount of tax payable on the next taxable dollar earned. 6. Free cash flow is another term for the: A. operating cash flow. B. net decrease in working capital. C. cash flow to stockholders. D. cash flow to creditors. E. cash flow from assets. 7. Financial leverage: A. refers to the issuance of company stock to finance a new business venture. B. when used in moderation tends to lower the potential rewards to stockholders. C. reduces the odds that a firm will encounter financial distress. D. when overextended greatly magnifies the possibility that a firm will become bankrupt. E. allows a firm to greatly increase its assets without increasing its debt. 8. Which one of the following is the correct formula for the future value of a lump sum invested today? A. FV = PV / (1 + r) t B. FV = PV / (1 + rt) C. FV = PV x rt D. FV = PV x (1 + t) r E. FV = PV x (1 + r) t 9. Given a rate of return of zero, the future value of a lump sum invested today will always: A. remain constant, regardless of the period of time. B. decrease as the period of time decreases. C. decrease as the period of time increases.
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This note was uploaded on 09/09/2011 for the course BUSINESS 300 taught by Professor N/a during the Spring '09 term at DeVry Chicago.

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PracticeQ - 2039SASDE_2007 Student 1 The primary market refers to A the original sale of securities by the issuer B transactions between two

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