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tb07 - Chapter 7 The Stock Market the Theory of Rational...

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Chapter 7 The Stock Market, the Theory of Rational Expectations, and the Efficient Markets Hypothesis T Multiple Choice 1) Stockholders’ rights include (a) the right to vote. (b) the right to manage. (c) primary claims on all cash flows. (d) ownership of bonds. (e) all of the above. Answer: A Question Status: New 2) Stockholders’ rights include (a) the right to manage. (b) the right to change personnel policy. (c) the right to veto management’s decisions. (d) primary claim on all of a company’s assets. (e) residual claim on all cash flows. Answer: D Question Status: New 3) Stockholders are residual claimants, meaning that they
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238 Frederic S. Mishkin • Economics of Money, Banking, and Financial Markets, Seventh Edition 4) A stockholder’s ownership of a company’s stock gives her the right to 5) Dividends are paid from 6) Payments of net earnings to shareholders are called (a) dividends. (b) capital gains. (c) profits. (d) loans. (e) interest. Answer: A Question Status: New 7) Periodic payments of net earnings to shareholders are known as 8) Dividends are periodic payments of net earnings to
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Chapter 7 The Stock Market, the Theory of Rational Expectations, and the Efficient Markets Hypothesis 239 9) The value of an investment can be found by computing the present value of all future 10) The value of any investment is found by (a) computing the present value of all future sales. (b) computing the present value of all future liabilities. (c) computing the future value of all sales. (d) computing the present value of all future cash flows. (e) computing the future value of all future expenses. Answer: D Question Status: New
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