Question 1

A bond

Accepted Answer

A)  must be repaid according to the terms set in its indenture.
B)  may be defaulted without penalty.
C)  is the same as a stock.
D)  is a fixed asset.
E)  is a current liability.F) A) and E)
G) All of the above

Question 2

List the important components of a firm's working capital.Include both current assets and current liabilities.

Accepted Answer

The current assets associated with worki...

Question 3

What types of bonds are there? Describe each type briefly.

Accepted Answer

There are a great many different types of bonds.Most are unsecured bonds,meaning that they are not backed by collateral.Secured bonds are backed by specific collateral that must be forfeited in the event that the issuing firm defaults.Serial bonds are different from secured bonds in that they are actually a sequence of small bond issues of progressively longer maturity.The firm pays off each of the serial bonds as they mature.Floating-rate bonds do not have fixed interest payments;instead,the interest rate changes with current interest rates.Junk bonds are a high interest bond that has received a lot of interest in recent decades.They offer relatively high rates of interest because they are inherently riskier investments than other types of bonds.

Question 4

Long-term assets are also called what?

Accepted Answer

A)  Current
B)  Lengthy
C)  Comprehensive
D)  Fixed
E)  RelevantF) A) and B)
G) All of the above

Question 5

Other than bank loans and short-term loans,discuss how firms raise long-term capital using liabilities.

Accepted Answer

Many corporations can raise capital by i...

Question 6

If Linda Wilson borrows $20,000 to buy a car and ends up paying the lender a total of $24,000,the $4,000 difference represents the

Accepted Answer

A)  principal.
B)  collateral.
C)  security.
D)  discount.
E)  interest.F) All of the above
G) A) and E)

Question 7

Secondary markets exist for the trading of previously-issued securities.

Accepted Answer

A) True 
 B)False

Question 8

A marketable security is a temporary investment of cash.

Accepted Answer

A) True 
 B)False  True

Question 9

If the interest rate on a loan changes according to the daily average of the prime rate over the life of the loan,the interest rate is said to be

Accepted Answer

A)  floating.
B)  non-variable.
C)  fixed.
D)  sporadic.
E)  flexible.F) B) and C)
G) A) and E)

Question 10

When a company invests a lot of money in a particular project,it is concerned about the amount of risk involved.In general,the longer the expected life of a project or asset,the potential risk is

Accepted Answer

A)  lesser.
B)  constant.
C)  greater.
D)  unchanged.
E)  nonexistent.F) D) and E)
G) B) and C)

Question 11

Unsecured loans are backed by collateral that the lender can claim if the borrower does not repay the loan.

Accepted Answer

A) True 
 B)False

Question 12

Dan bought three new trucks with a loan obtained from the First National Bank.If he fails to repay the loan,the bank will repossess the trucks.The trucks are

Accepted Answer

A)  bought with an unsecured loan.
B)  bought with a line of credit.
C)  collateral.
D)  interest.
E)  principal.F) B) and D)
G) A) and E) C

Question 13

Transaction balances are cash on hand to pay everyday expenses.

Accepted Answer

A) True 
 B)False

Question 14

Long-term liabilities are

Accepted Answer

A)  debts that are due in less than six months.
B)  debts that will be repaid over a number of years.
C)  assets.
D)  equity.
E)  retained earnings.F) All of the above
G) C) and D)

Question 15

The following are types of bonds except

Accepted Answer

A)  serial.
B)  commercial.
C)  secured.
D)  floating-rate.
E)  unsecured.F) C) and D)
G) A) and B)

Question 16

Cash,investments,accounts receivable,and inventory are also known as

Accepted Answer

A)  current assets.
B)  current liabilities.
C)  long-term assets.
D)  long-term liabilities.
E)  fixed assets.F) A) and E)
G) C) and E)

Question 17

Which of the following is an example of a long-term liability?

Accepted Answer

A)  Stock
B)  Bond
C)  Revenue
D)  Discount
E)  EquityF) C) and E)
G) B) and E)

Question 18

Which market exists so that corporations can sell stocks directly to the public?

Accepted Answer

A)  The singular market
B)  Tertiary markets
C)  Multiple markets
D)  Secondary markets
E)  The primary marketF) C) and D)
G) None of the above

Question 19

What does Glasspray sell?

Accepted Answer

A)  Fiberglass spray equipment
B)  Boats
C)  Fiberglass
D)  Sinks
E)  Glasspray does not make anything-it is a wholesalerF) A) and E)
G) A) and B)

Question 20

Corporations usually employ an investment banking firm to help sell their securities in ______, which is where firms raise their financial capital.

Accepted Answer

A)  the primary market
B)  secondary markets
C)  tertiary markets
D)  singular markets
E)  multiple marketsF) C) and D)
G) C) and E)

Exam 16: Financial Management and Securities Markets

A bond

Correct Answer
verified

List the important components of a firm's working capital.Include both current assets and current liabilities.

Correct Answer
verified
The current assets associated with worki...
View Answer

What types of bonds are there? Describe each type briefly.

Long-term assets are also called what?

Correct Answer
verified

Other than bank loans and short-term loans,discuss how firms raise long-term capital using liabilities.

Correct Answer
verified
Many corporations can raise capital by i...
View Answer

If Linda Wilson borrows $20,000 to buy a car and ends up paying the lender a total of $24,000,the $4,000 difference represents the

Correct Answer
verified

Secondary markets exist for the trading of previously-issued securities.

Correct Answer
verified

A marketable security is a temporary investment of cash.

Correct Answer
verified
True

If the interest rate on a loan changes according to the daily average of the prime rate over the life of the loan,the interest rate is said to be

Correct Answer
verified

When a company invests a lot of money in a particular project,it is concerned about the amount of risk involved.In general,the longer the expected life of a project or asset,the potential risk is

Correct Answer
verified

Unsecured loans are backed by collateral that the lender can claim if the borrower does not repay the loan.

Correct Answer
verified

Dan bought three new trucks with a loan obtained from the First National Bank.If he fails to repay the loan,the bank will repossess the trucks.The trucks are

Correct Answer
verified
C

Transaction balances are cash on hand to pay everyday expenses.

Correct Answer
verified

Long-term liabilities are

Correct Answer
verified

The following are types of bonds except

Correct Answer
verified

Cash,investments,accounts receivable,and inventory are also known as

Correct Answer
verified

Which of the following is an example of a long-term liability?

Correct Answer
verified

Which market exists so that corporations can sell stocks directly to the public?

Correct Answer
verified

What does Glasspray sell?

Correct Answer
verified

Corporations usually employ an investment banking firm to help sell their securities in ______, which is where firms raise their financial capital.

Correct Answer
verified

Exam 16: Financial Management and Securities Markets

A bond

Correct AnswerverifiedShow Answer

List the important components of a firm's working capital.Include both current assets and current liabilities.

Correct AnswerverifiedThe current assets associated with worki...View AnswerShow Answer

What types of bonds are there? Describe each type briefly.

Long-term assets are also called what?

Correct AnswerverifiedShow Answer

Other than bank loans and short-term loans,discuss how firms raise long-term capital using liabilities.

Correct AnswerverifiedMany corporations can raise capital by i...View AnswerShow Answer

If Linda Wilson borrows $20,000 to buy a car and ends up paying the lender a total of $24,000,the $4,000 difference represents the

Correct AnswerverifiedShow Answer

Secondary markets exist for the trading of previously-issued securities.

Correct AnswerverifiedShow Answer

A marketable security is a temporary investment of cash.

Correct AnswerverifiedTrue

If the interest rate on a loan changes according to the daily average of the prime rate over the life of the loan,the interest rate is said to be

Correct AnswerverifiedShow Answer

When a company invests a lot of money in a particular project,it is concerned about the amount of risk involved.In general,the longer the expected life of a project or asset,the potential risk is

Correct AnswerverifiedShow Answer

Unsecured loans are backed by collateral that the lender can claim if the borrower does not repay the loan.

Correct AnswerverifiedShow Answer

Dan bought three new trucks with a loan obtained from the First National Bank.If he fails to repay the loan,the bank will repossess the trucks.The trucks are

Correct AnswerverifiedC

Transaction balances are cash on hand to pay everyday expenses.

Correct AnswerverifiedShow Answer

Long-term liabilities are

Correct AnswerverifiedShow Answer

The following are types of bonds except

Correct AnswerverifiedShow Answer

Cash,investments,accounts receivable,and inventory are also known as

Correct AnswerverifiedShow Answer

Which of the following is an example of a long-term liability?

Correct AnswerverifiedShow Answer

Which market exists so that corporations can sell stocks directly to the public?

Correct AnswerverifiedShow Answer

What does Glasspray sell?

Correct AnswerverifiedShow Answer

Corporations usually employ an investment banking firm to help sell their securities in ______, which is where firms raise their financial capital.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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The current assets associated with worki...
View Answer

Correct Answer
verified

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verified
Many corporations can raise capital by i...
View Answer

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verified

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True

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C

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