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FIN 534 Quiz 1 Week 1

Question 1

You recently sold 100 shares of your new company, XYZ Corporation, to your brother at a family reunion. At the reunion your brother gave you a check for the stock and you gave your brother the stock certificates. Which of the following statements best describes this transaction?

Question 2

Which of the following statements is CORRECT?

1) While the distinctions are blurring, investment banks generally specialize in lending money, whereas commercial banks generally help companies raise capital from other parties

Question 3

Which of the following statements is CORRECT?

1) The NYSE does not exist as a physical location; rather it represents a loose collection of

Question 4

Which of the following statements is CORRECT?

1) It is usually easier to transfer ownership in a corporation than it is to transfer ownership in a sole proprietorship

Question 5

Which of the following statements is CORRECT?

1) One disadvantage of operating as a corporation rather than as a partnership is that corporate shareholders are exposed to more personal liability than partners

Question 6

Suppose the U.S. Treasury announces plans to issue $50 billion of new bonds. Assuming the announcement was not expected, what effect, other things held constant, would that have on bond prices and interest rates?

Question 7

Which of the following statements is CORRECT?

) Corporations are at a disadvantage relative to partnerships because they have to file more

Question 8

Which of the following statements is CORRECT?

1) In a regular partnership, liability for other partners' misdeeds is limited to the amount of a particular partner's investment in the business

Question 9

Which of the following statements is CORRECT?

1) If you purchase 100 shares of Disney stock from your brother-in-law, this is an example of a primary market transaction.

Question 10

Which of the following factors would be most likely to lead to an increase in interest rates in the economy?

1) Households reduce their consumption and increase their savings

Question 11

Which of the following statements is CORRECT?

1) Hedge funds are legal in Europe and Asia, but they are not permitted to operate in the United States

Question 12

Which of the following statements is CORRECT?

1) The New York Stock Exchange is an auction market with a physical location

Question 13

Which of the following statements is CORRECT?

1) The corporate bylaws are a standard set of rules established by the state of incorporation. These rules are identical for all corporations in the state, and their purpose is to ensure that the firm's managers run the firm in accordance with state laws

Question 14

Which of the following statements is CORRECT?

1) If expected inflation increases, interest rates are likely to increase

Question 15

The primary operating goal of a publicly-owned firm interested in serving its stockholders should be to _________

1) maximize its expected total corporate income