Q11. An example of a secondary market transaction involving a capital market security is
a. a new issue of a security with a very short maturity.
b. a new issue of a security with a very long maturity.
c. the transfer of a previously-issued security with
Q31. Denver Systems has total assets of $1,000,000; common equity of $400,000; a gross profit of $800,000; total
operating expenses of $620,000; interest expense of $20,000; income taxes of $74,000; and preferred dividends of
$30,000. What is Denver Syste
Q41. Assume that an investor is offered a choice of a risk-free government bond that is expected to return 3.5% or
a high-risk corporate stock. According to one of the principles of finance, what would induce the investor to
purchase the corporate stock?
Q21. Which of the following accounts belongs in the equity section of a balance sheet?
a. retained earnings
c. long-term debt
Q22. Two companies have identical assets and operating activities. Which of the follow statements is true?