FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 19: Using Securities Markets for Financing and Investing Opportunities

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 31

Multiple Choice

Review LaterAdd Note

Review Later

represents the most basic form of company ownership and includes voting rights and dividends, if and when the firm elects to pay dividends.

A) Capital stock
B) Common stock
C) Preferred stock
D) Carrier stock

E) A) and C)
F) All of the above

Correct Answer

verified

Show Answer

Question 32

Multiple Choice

Review LaterAdd Note

Review Later

Maureen owns 20% of the common stock of the Queen Bean Corporation. The company announced plans to offer an additional 10,000 shares of common stock for sale. If Maureen exercises her preemptive rights, Queen Bean must offer her the opportunity to purchase:

A) 8,000 shares.
B) 2,000 shares.
C) as many of the new shares as the investor is willing and able to buy.
D) 20% of the outstanding preferred stock.

E) A) and B)
F) A) and C)

Correct Answer

verified

Show Answer

Question 33

True/False

Review LaterAdd Note

Ricardo owns 100 shares of stock in the ABC Corporation that currently sell for $100 per share. ABC just announced a two-for- one stock split for all current stockholders. Ricardo now owns $20,000 worth of stock in the ABC Corporation.

Common stock and corporate bonds represent the two types of equity financing available to a firm.

Realizing that Mississippi Industries stock currently sells for $35 a share, Juanita directed her broker to buy 100 shares if and when the price dropped to $33. Juanita placed a order with her broker.

A stock split immediately increases the value of an investor's holdings.

Individual investors must determine for themselves the risk level of corporate bonds.

The secondary market is where investors (both individuals and companies) go to find someone who is interested in selling their investments to them.

Shareholder Jones sells 100 shares of Very Vegetarian Corporation stock to Investor Smith. This transaction takes place in the:

Lupe's stockbroker called to inform Lupe of a margin call that requires that she pay $1,000. This indicates that the value of Lupe's stock has:

Elaine plans to purchase 100 shares of Michigan International stock at $44 per share. The current margin rate is 40%. The maximum amount that Elaine could borrow from her broker is:

Diversification means buying several different types of investments with the funds you have available for investment.

Securities and Exchange Commission (SEC) rules prohibit the listing of the stock of foreign firms on U.S. stock exchanges.

The advantage of using an online broker is that these services usually provide you with a wealth of information and help you allocate your assets. Sometimes they even help you create an investment plan for life!

As a registered representative of a stock brokerage firm, a stockbroker works as an intermediary to buy and sell securities for clients.

Investing on-line is usually than trading through a traditional stock brokerage firm.

The Securities and Exchange Commission requires that all prospective investors receive a copy of a firm's prospectus prior to investing.

Another name for the fixed rate of interest attached to a bond is the:

Corporate bonds provide investors the option of reselling the bond back to the issuing corporation at any time during the life of the bond.

A mutual fund company buys securities from corporations and governments, and packages them together into a "mutual fund". It then .