PracticeQuiz1 - Practice Quiz 1 1 The means by which...

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Practice Quiz 1 1. The means by which individuals hold their claims on real assets in a well-developed economy are A. Investment assets. B. Depository assets. C. Derivative assets. D. Financial assets. E. Exchange-driven assets. 2. _______ are financial assets. 3. A fixed-income security pays ____________. 4. Money market securities ____________. 5. An example of a derivative security is ______. A. a common share of Microsoft B. a call option on Intel stock C. a commodity futures contract D. B and C E. A and B 6. Although derivatives can be used as speculative instruments, businesses most often use them to 7. Financial assets permit all of the following except ____________.
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8. The ____________ refers to the potential conflict between management and shareholders. 9. Which of the following are mechanisms that have evolved to mitigate potential agency problems? I) Compensation in the form of the firm's stock options II) Hiring bickering family members as corporate spies III) Underperforming management teams being forced out by boards of directors IV) Security analysts monitoring the firm closely V) Takeover threats A. II and V B. I, III, and IV C. I, III, IV, and V D. III, IV, and V E. I, III, and V 10. Theoretically, takeovers should result in ___________. 11. Asset allocation refers to ____________.
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