What is the pecking order of payments (from first to last) for a firm’s creditors and owners? A) bondholders, then preferred stockholders, then common stockholders B) preferred stockholders, then common stockholders, then bondholders C) common stockholders, then bondholders, then preferred stockholders D) bondholders, then common stockholders, then preferred stockholders ANSWER A
Money market mutual funds have the protection of FDIC insurance. Indicate whether the statement is true or false ANSWER FALSE
Charges on a debit card are immediately deducted from bank account. Indicate whether the statement is true or false ANSWER TRUE
The price-earnings multiple reflects the growth prospects and riskiness of a firm. Indicate whether the statement is true or false ANSWER TRUE
A debit card is simply a credit card with a larger credit limit and extended payment terms. Indicate whether the statement is true or false ANSWER FALSE
Preferred stock is often referred to as a hybrid security for which of the following reasons? A) Preferred stock dividends are fixed like bond payments but the maturity is indefinite like common stock. B) Preferred stockholders have preference over common stock holders in bankruptcy, but are subordinate to bondholders. C) Both A and B are […]
An uncanny truth in the U.S. equity market is that over time the price-earnings multiple has been almost constant, ranging fewer than two points up or down from the average over the past 130 years. Indicate whether the statement is true or false ANSWER FALSE
Wildings, Inc. common stock has a beta of 1.2. If the expected risk free return is 4% and the expected market risk premium is 9%, what is the expected return on Wildings’ stock? A) 12.0% B) 14.8% C) 10.0% D) 13.8% ANSWER B
An investment will pay $500 in three years, $700 in five years and $1000 in nine years. If your opportunity rate is 6%, what is the present value of this investment? What will be an ideal response? ANSWER $1,534.79
You have been depositing money at the end of each year into an account drawing 8% interest. What is the balance in the account at the end of year four if you deposited the following amounts? Year End of Year Deposit 1 $350 2 $500 3 $725 4 $400 A) $2,207 B) $2,384 C) $2,687 […]
