FNCE 301-Exam 1 - 2010 Fall

FNCE 301-Exam 1- - FNCE 301 Fall 2010 Version 2 Sep-27-2010 ROGER WILLIAM UNIVERSITY GABELLI SCHOOL OF BUSINESS Name Student ID(Please show your

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FNCE 301 – Fall 2010 Version 2 Sep-27-2010 First Exam Page 1 ROGER WILLIAM UNIVERSITY GABELLI SCHOOL OF BUSINESS Name:___________________________ Student ID: ____________________ (Please show your work) 1) Which of the following statements is CORRECT? A. One advantage of forming a corporation is that equity investors are usually exposed to less liability than they would be in a partnership. B. Corporations face fewer regulations than sole proprietorships. C. One disadvantage of operating a business as a sole proprietor is that the firm is subject to double taxation, because taxes are levied at both the firm level and the owner level. D. It is generally less expensive to form a corporation than a proprietorship because, with a proprietorship, extensive legal documents are required. E. If a partnership goes bankrupt, each partner is exposed to liabilities only up to the amount of his or her investment in the business. 2) Which of the following is a primary market transaction? A. You sell 200 shares of IBM stock on the NYSE through your broker. B. You buy 200 shares of IBM stock from your brother. The trade is not made through a broker – you just give him cash and he gives you the stock. C. IBM issues 2,000,000 shares of new stock and sells them to the public through an investment banker. D. One financial institution buys 200,000 shares of IBM stock from another institution. An investment banker arranges the transaction. E. IBM sells 2,000,000 shares of treasury stock to its employees when they exercise options that were granted in prior years. 3)
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This note was uploaded on 09/15/2011 for the course FIN 301 taught by Professor Hoyt during the Spring '08 term at University of Nevada, Las Vegas.

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FNCE 301-Exam 1- - FNCE 301 Fall 2010 Version 2 Sep-27-2010 ROGER WILLIAM UNIVERSITY GABELLI SCHOOL OF BUSINESS Name Student ID(Please show your

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