The chart used to show the value of a $1 through various investments and timeframes is called:
Skittles Chart
Venn Diagram
Investment/Inflation Chart
The Ibbotson Chart
Q.2.
If a company files for bankruptcy, which of the following securities is most at risk of becoming virtually worthless
preferred stock
common stock
bond
Q.3.
Buying and Selling StocksRandy just boughtshares of stock in Facebook at $19.per share. A stock company that you have been working with charges $per transaction and you want to sell because the current rate for your shares skyrocketed and is at $34.per share. How much did Randy buy from Facebook?
800∗$34.50=$27,600.00
800∗$19.50=$15,600.00
$27,600−$15,600=$12,000.00
$12,000.00−$20.00=$11,980.00
Q.4.
An investment program funded by shareholders that trades in diversified
Mutual Funds
Dividends
Share program
None of the answers
Q.5.
An amount of money paid by a company regularly to it's shareholders
Profit
Bonds
Dividends
Cash back
Q.6.
The owner of a companies shares.
Businessman
Bond master
Broker
Shareholder
Q.7.
A part into which a companies capital is divided, entitling the shareholder to a portion of the profits.
Dividend
Bond
Share
Stock
Q.8.
A type of savings that signifies that you own a part of a corporation and a claim to their assets and earnings.
Stock
Share
Dividend
none is correct
Q.9.
Price paid at the purchase of bonds
Face Value
Selling Price
Cost Price
Bond Price
Q.10.
Money borrowed for a project where their price is a function of the law of supply and demand. People who buy these ______ are lending money for a project.
Share
Mutual funds
Bonds
Capital
Q.11.
High interest rates will
shift the flow supply schedule for new housing to the right
shift the flow supply schedule for new homes to the left.
shift the demand schedule for new housing to the right.
have no effect on the cost of new housing, only on existing homes.
Q.12.
Business fixed investment
is only a minor component of total aggregate demand.
does not play an important role in the process of longer-run economic growth.
averages roughly 11 percent of GDP.
has declined every year since 1993 as a percentage of total output.
Q.13.
Inventory investment includes spending on
a. capital equipment minus depreciation.
b. goods firms sell to other firms.
c. the purchase of materials and supplies used in production.
d. goods in production
e. both c and d.
Q.14.
The flexible accelerator model of investment can be shown as
In, t = λ(αYt – Kt – 1).
In, t = λ(αYt – Kt + 1).
In, t = λ(αYt + Kt– 1).
In, t = λ(αYt + Kt+ 1).
None of above
Q.15.
Which of the following would increase the cost of capital to the firm (holding constant the other elements of the cost of capital)?
A fall in the expected inflation rate
A fall in the depreciation rate
A fall in the nominal interest rate
A rise in the investment tax credit
Q.16.
If the life cycle theory of consumption holds, as the fraction of our population that is retired rises over the nextyears, the national savings rate should
rise and interest rates should rise.
fall and interest rates should fall.
fall and interest rates should rise.
rise and interest rates should fall.
none of the above
Q.17.
The largest component of investment is
capital investment.
inventory investment.
business fixed investment.
residential construction.
Q.18.
Which of the following statements is (are) correct?
a. The simple accelerator theory combined with the multiplier process provides an explanation of cyclical fluctuations in output
b. Investment is more volatile than the simple accelerator model predicts
c. According to the simple accelerator theory of investment, the level of investment is dependent on the level of existing inventories
Both a and b
All of the above
Q.19.
If the mortgage rate is 4 percent and the expected inflation rate is 6 percent, then the real borrowing cost would be
2 percent
-2 percent
4 percent
10 percent
Q.20.
If a firm faces financing constraints on its investment spending, the most important determinant of how much it invests will be the
firm's current profitability.
the firm's future profitability.
the nominal interest rate.
the real interest rate.
the firms cost of capital.
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