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This activity contains 18 questions. Which of the following statements is false? Bonds carry no corporate ownership privileges. A bond issuer must pay periodic interest. A bond is a financial contract. Bond prices remain fixed over time. Which of the following statements is true? Generally speaking, bonds are riskier than common stocks. Bonds are usually less liquid than stocks. A bondholder repays principal when the bond matures. Low inflation is expected to have a negative effect on bond prices. Most bonds: are interest-bearing obligations of governments or corporations. give bondholders a voice in the affairs of the corporation. are money market securities. are floating-rate securities. Which of the following is not an advantage of investing in bonds? Bonds are good sources of current income. Bond investments are relatively safe from large losses. Bondholders receive their payments before shareholders can be compensated. Bonds have unlimited profit potential.
Which of the following is a capital market security? Federal agency bonds. Federal funds. Eurodollars. Treasury bills. Which of the following is a money market security? Mortgages. U.S. Treasury notes. Municipal bonds. Repurchase agreements. Corporations borrow for the short term by issuing: corporate bonds. commercial paper. corporate bills. bankers’ acceptances. What is used to quote the rates on Eurodollar deposits? Federal funds rate. Discount rate. LIBOR. Repo rate. Which of the following provides income that is fully exempt from
taxation for the individual investor? Treasury notes. Treasury bills. Preferred stocks. Municipal bonds. Which of the following is a residual claim on a firm’s assets? Common stock. Preferred stock. Participating preferred stock. Preference shares. Which of the following occurs four trading days before the date of record? Payment date. Declaration date. Distribution date. Ex-dividend date. Which of the following types of assets is least risky? Short-term corporate bonds. Long-term corporate bonds. Options and futures. Stocks. Which of the following types of assets offers the highest expected return? Long-term government bonds.
Long-term corporate bonds. Options and futures. Stocks. Which of the following types of financial assets represents a creditor relationship with an entity? Bonds. Stocks. Futures. Options. Which of the following sequences lists financial assets from least risky to most risky? Stocks, bonds, derivatives. Derivatives, bonds, stocks. Bonds, stocks, derivatives. Derivatives, stocks, bonds. Bonds, derivatives, stocks. Which of the following sequences lists financial assets from lowest expected return to highest expected return? Derivatives, bonds, stocks. Bonds, stocks, derivatives. Stocks, bonds, derivatives. Derivatives, stocks, bonds. Bonds, derivatives, stocks.

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