1. Securities with maturities of one year or less are classified as
A) capital market instruments.
B) money market instruments.
C) preferred stock.
D) none of the above
2. Jarrod King, a private investor, purchases a Tr
1. Financial market participants who provide funds are called
A) deficit units.
B) surplus units.
C) primary units.
D) secondary units.
2. The main provider(s) of funds to the U.S. T
1. The Phillips Curve suggests
A) a positive relationship between unemployment and inflation.
B) an inverse relationship between unemployment and inflation.
C) an inverse relationship between GNP and inflation.
1. The appropriate discount rate for valuing any bond is the
A) bonds coupon rate.
B) bonds coupon rate adjusted for the expected inflation rate over the life of the bond.
C) Treasury bill rate with an adjustment to inc
1. The required return to implement a given business project will be _ if interest rates are
lower. This implies that businesses will demand a _ quantity of loanable funds when interest
rates are lower.
1. Which of the following is not a major component of the Federal Reserve System?
A) member banks
B) Federal Open Market Committee
C) Securities and Exchange Commission
D) Board of Governors
2. Of the nine director
1. The common price-earnings valuation method applied the _ price-earnings ratio to _
earnings per share in order to value the firms stock.
A) firms; industry
B) firms; firms
C) average industry; industry
D) average i
1. Default risk is likely to be highest for
A) short-term Treasury securities.
B) AAA corporate securities.
C) long-term Treasury securities.
D) BBB corporate securities.
2. If a security can easily be conv
1. A _ requires that dividends cannot be paid on common stock until all current and previously
omitted dividends are paid on preferred stock.
A) residual claim
B) preferred margin
C) cumulative provisio
1. Federally insured mortgages guarantee
A) loan repayment to the lending financial institution.
B) that the interest rate will not increase during the life of the mortgage.
C) the lending financial institution a selling price
1. Note maturities are usually _, while bond maturities are _.
A) less than 10 years; 10 years or more
B) 10 years or more; less than 10 years
C) less than 5 years; 5 years or more
D) 5 years or more; less than 5 years
? Fundamental of
Financial Management? (? ?
? ? ? ? ? ? ? ? ?
1. Explain(12%,each 3 marks)
1. 1. financial management
Financial management is concerned with the acquisition, financing,and management of assets with
some overall goal in mind.
1. 2. lim