An Introduction to Investments
1. The investor should specify the goals of investing.
2. The term "investment" in economics generally does not
refer to the purchase of securities.
3. Investments are made in anticipation of a ret
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Law, Value Creation, and Risk Management
TRUE FALSE QUESTIONS
Private law provides the legal rules within which firms compete.
SKILL LEVEL: AACSB Analytic
OBJECTIVE: AICPA Legal
1. A major function of organized securities markets is to
facilitate the transfers of securities among investors.
2. A round lot is the general unit for trading in a
3. The purchase of 53 shares of I
Risk and Portfolio Management
1. The tendency of individual stock prices to move
together is one source of systematic risk.
2. Systematic risk is reduced through diversification.
3. A portfolio consisting of securities whose ret
Financial Planning, Taxation, and the Efficiency
of Financial Markets
1. One of the first steps an investor should take is to
establish the goals of the portfolio.
2. An income statement enumerates of an individual's
An Introduction to Options
T 1. The intrinsic value of an option to buy stock (i.e., a
call option) is the difference between the price of the stock
and the per share exercise price of the option.
F 2. The price of an option is gener
The Valuation of Stock
T 1. The expected return depends on future dividends and
future price appreciation.
T 2. The dividend-growth valuation model depends on
dividends and the required rate of return.
F 3. The dividend-growth model i
The Time Value of Money
1. Compounding refers to the earning of interest on
interest earned previously.
2. The larger the rate of interest, the smaller is the
future value of a dollar.
3. If a bank pays 2 percent compounded dail
Investment Companies: Mutual Funds
1. Investment companies pay no taxes on their earnings.
2. The per share net asset value of a mutual fund depends
on the difference between the fund's assets and liabilities
and the number of sha
Option Valuation and Strategies
F 1. According to the Black/Scholes option valuation model,
the value of a call option rises as it approaches expiration.
T 2. According to the Black/Scholes option valuation model,
the value of a call
Commodity and Financial Futures
1. When an investor enters (also referred to as
purchases) commodity contracts, the individual takes
physical delivery of the goods.
2. Investing in futures contracts is considered to be
Chapter 7 Closed-end Investment Companies, Real Estate
Investment Trusts (REITs), and Exchange-Traded Funds (ETFs)
1. A closed-end investment company is not a "mutual fund."
T 2. The per share net asset value of the shares in a
MULTIPLE CHOICE QUESTIONS
Which of the following is not one of the four primary public policy objectives of the laws
and regulations applicable to U.S. business in the early twenty-first century?
A. Promoting economic growth
B. Protecting workers
The Bond Market
1. Bonds pay a flow of income called interest.
2. The current yield and the yield to maturity are equal
if a bond sells for its par value.
3. Since bonds are legal obligations, there is little
risk associated wi
Convertible Bonds and Convertible Preferred Stock
F 1. A convertible bond may be converted at the firm's
option into common stock.
2. Generally, convertible bonds lack a call provision.
T 3. Convertible bonds are often subordinated
Investment Returns and Aggregate Measures of
1. Aggregate securities prices may be measured by using
value-weighted or geometric averages.
2. Aggregate measures of stock prices include dividend
3. The Dow
1. The relationship between a firm and its state of
incorporation is specified in the bylaws.
2. Stockholders in a publicly held corporation have
3. Corporate retained earnings are taxed on the
The Valuation of Fixed Income Securities
1. A few bonds called "perpetuals" never mature.
2. The value of a bond depends on the amount of
principal, when it matures, and the interest it pays.
3. As interest rates increase, the
1. Federal government debt does not have default risk
because the government has the power to tax and to create
2. The federal government only issues marketable
securities such as treasury bills.
Chapter 12 Behavioral Finance and Technical Analysis
F 1. Behavioral finance asserts that emotional investing
produces higher returns.
T 2. According to behavioral finance, investors often select
investment data that confirms a preconceived pos
Chapter 20 Investing and Portfolio Management
in an Efficient Market Context
Even though this chapter serves to tie together the basic
themes of the text, the following question may help serve
that basic objective.
T 1. One of the first steps a
The Macroeconomic Environment for Investment
F 1. Economies go through regular, identifiable cycles that
can be forecasted with accuracy.
T 2. The Federal Reserve is the central bank of the United
3. A recession i
Ch1:Explain the agency problem of MNCs; Benefits and Risks of International
Business;Describe constraints that interfere with an MNC's objective.
Dicussion: Should an MNC Reduce Its Ethical Standards to Compete Internationally?
Ch2: What is the current ac
Chapter 2International Flow of Funds
1. Recently, the U.S. experienced an annual balance of trade representing a _.
a. large surplus (exceeding $100 billion)
b. small surplus
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Chapter 3 - Corporate Governance Summary
To respond to stakeholder pressures to answer for organizational decisions and policies,
organizations must effectively implement policies that provide strategic guidance on
appropriate courses of action. Such poli
Chapter 2 - Strategic Management of Stakeholder Relationships - Summary
Stakeholders refer to those people and groups who have a stake in some aspect of a
companys products, operations, markets, industry, or outcomes. The relationship
Chapter 1 - Social Responsibility Framework - Summary
The term social responsibility came into widespread use during the last several decades,
but there remains some confusion over the terms exact meaning. This text defines social
responsibility as the ad
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Termodinamika je dio fizikalne hemije
Klasina termodinamika poiva na dvjema osnovnim pretpostavkama:
1. U materijalnom svijetu nema praznog prostora, tj. ne postoji
prostor bez materije. Takav prostor se naziva kontinuum.