Finance Question and Answers
Exam
Name___________________________________
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1) Because common shareholders are entitled to the profits that remain after all of a corporation 's
1) _______ other obligations have been met, common shareholders are known as
A) debt owners.
B) temporary owners.
C) owners of last resort.
D) residual owners.
2) An individual who invested $100,000 in average stocks early in the year 2000 would have approximately how much money at the end of 2008?
A) $37,500
B) $96,400
C) $74,000
D) $137,500
2) _______
3) Over the long run, stocks have provided investors with annual returns of around
A) 12% to 14%.
B) 6% to 8%.
C) 10% to 12%.
D) 8% to 10%.
3) _______
4) If stocks earn an average rate of return of 12 %, their value doubles every
A) 8 years.
B) 6 years.
C) 4 years.
4) _______
D) 12 years.
5) Which one of the following statements about common stock is true?
A) Common stocks generally have a negative rate of return over a ten-year period.
B) Dividends generally provide the greatest rate of return on common stocks.
C) The DJIA is the best indicator of the overall performance of common stocks.
D) Common stock can provide attractive capital appreciation opportunities.
5) _______
6) When a company, working with an underwriter, offers the investing public a certain number of shares of its stock at a certain price, the company is making what is known as a
A) stock spin-off.
B) public offering.
C) rights offering.
D) treasury offering.
6) _______
7) In a rights offering, the
A) total equity remains constant while the number of shares of common stock outstanding increases. B) amount of debt in the capital structure increases by the amount of the rights offering.
C) existing stockholders are given the first opportunity to purchase new shares in proportion to their current ownership position.
D) underwriter offers
Name___________________________________
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1) Because common shareholders are entitled to the profits that remain after all of a corporation 's
1) _______ other obligations have been met, common shareholders are known as
A) debt owners.
B) temporary owners.
C) owners of last resort.
D) residual owners.
2) An individual who invested $100,000 in average stocks early in the year 2000 would have approximately how much money at the end of 2008?
A) $37,500
B) $96,400
C) $74,000
D) $137,500
2) _______
3) Over the long run, stocks have provided investors with annual returns of around
A) 12% to 14%.
B) 6% to 8%.
C) 10% to 12%.
D) 8% to 10%.
3) _______
4) If stocks earn an average rate of return of 12 %, their value doubles every
A) 8 years.
B) 6 years.
C) 4 years.
4) _______
D) 12 years.
5) Which one of the following statements about common stock is true?
A) Common stocks generally have a negative rate of return over a ten-year period.
B) Dividends generally provide the greatest rate of return on common stocks.
C) The DJIA is the best indicator of the overall performance of common stocks.
D) Common stock can provide attractive capital appreciation opportunities.
5) _______
6) When a company, working with an underwriter, offers the investing public a certain number of shares of its stock at a certain price, the company is making what is known as a
A) stock spin-off.
B) public offering.
C) rights offering.
D) treasury offering.
6) _______
7) In a rights offering, the
A) total equity remains constant while the number of shares of common stock outstanding increases. B) amount of debt in the capital structure increases by the amount of the rights offering.
C) existing stockholders are given the first opportunity to purchase new shares in proportion to their current ownership position.
D) underwriter offers