ch11 - Financial Markets and Institutions, 6e...

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Unformatted text preview: Financial Markets and Institutions, 6e (Mishkin/Eakins) Chapter 11 1 The Stock Market 11.1 Multi ple Choi ce 1) (I) A share of common stock in a firm represents an ownership interest in that firm. (II) A share of preferred stock is as much like a bond as it is like common stock. A) (I) is true, (II) false. B) (I) is false, (II) true. C) Both are true. D) Both are false. Answer: C Question Status: Previous Edition 2) Preferred stockholders hold a claim on assets that has priority over the claims of A) both common stockholders and bondholders. B) neither common stockholders nor bondholders. C) common stockholders, but after that of bondholders. D) bondholders, but after that of common stockholders. Answer: C Question Status: Previous Edition 3) (I) Preferred stockholders hold a claim on assets that has priority over the claims of common stockholders, but after that of bondholders. (II) Firms issue preferred stock in far greater amounts than common stock. A) (I) is true, (II) false. B) (I) is false, (II) true. C) Both are true. D) Both are false. Answer: A Question Status: Previous Edition 4) (I) Preferred stockholders hold a claim on assets that has priority over the claims of common stockholders. (II) Bondholders hold a claim on assets that has priority over the claims of preferred stockholders. A) (I) is true, (II) false. B) (I) is false, (II) true. C) Both are true. D) Both are false. Answer: C Question Status: Previous Edition 5) (I) Firms issue common stock in far greater amounts than preferred stock. (II) The total volume of stock issued is much less than the volume of bonds issued. A) (I) is true, (II) false. B) (I) is false, (II) true. C) Both are true. D) Both are false. Answer: C Question Status: Previous Edition 6) The riskiest capital market security is A) preferred stock. B) common stock. C) corporate bonds. D) Treasury bonds. Answer: B Question Status: Previous Edition 7) Organized exchanges account for about _________ percent of the total dollar volume of domestic stock shares traded. A) 30 B) 45 C) 60 D) 70 Answer: D Question Status: Previous Edition 8) Organized exchanges account for about _________ percent of the total dollar volume of domestic stocks traded. A) 60 B) 70 C) 80 D) 90 Answer: B Question Status: Previous Edition 9) (I) The largest of the organized stock exchanges in the United States is the New York Stock Exchange. (II) To be listed on the NYSE, a firm must have a minimum of $100 million dollars in market value or $10 million in revenues. A) (I) is true, (II) false. B) (I) is false, (II) true. C) Both are true. D) Both are false. Answer: A Question Status: Previous Edition 10) To list on the NYSE, a firm must A) have earnings of at least $100 million for each of the last three years. B) have at least $500 million of market value and $100 million of revenue. C) have a total of $100 million in market value of publicly traded shares. D) meet all of the above requirements. E) meet A and B of the above requirements. Answer: E Question Status: Previous Edition 11)...
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This note was uploaded on 10/17/2011 for the course ECON 317 taught by Professor Guidry during the Spring '11 term at Nicholls State.

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ch11 - Financial Markets and Institutions, 6e...

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