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Questions
Q:
Using the above table, the AFC, the AVC, and the ATC when output is 1 unit areA) $10, $10, and $20, respectively. B) $5, $10, and $15, respectively.C) $0, $10, and $10, respectively. D) $5, $10, and $5, respectively.
Q:
Which of the following is not a characteristic of a money market instrument?
A. liquidity
B. marketability
C. low risk
D. maturity greater than 1 year
Q:
Q:
If the random walk theory is correct, then is there any way to ʺbeat the marketʺ?
Q:
Which of the following is not a true statement regarding municipal bonds?
A. A municipal bond is a debt obligation issued by state or local governments.
B. A municipal bond is a debt obligation issued by the federal government.
C. The interest income from a municipal bond is exempt from federal income taxation.
D. The interest income from a municipal bond is exempt from state and local taxation in the issuing state.
Q:
Q:
Which of the following is not an advantage of a partnership?
A) The taxation of profits
B) The issue of liability
C) The legal paperwork needed to form a partnership
D) Separation of partnerʹs duties
Q:
Deposits of commercial banks at the Federal Reserve are called _____.
A. bankers' acceptances
B. federal funds
C. repurchase agreements
D. time deposits
Q:
Refer to the above figure. Which point represents the highest level of utility?A) Point A B) Point B C) Point C D) Point D
Q:
Q:
The German stock market is measured by which market index?
A. FTSE
B. Dow Jones 30
C. DAX
D. Nikkei
Q:
QuantityPer WeekTotal UtilityAmyRobertDavidMichelle0000015.01006006029.91901200130314.72701800220419.43402400310524.04003000425628.54503600575732.94904200900837.252048001275941.451054001770Refer to the above table. Amyʹs utility schedule showsA) diminishing marginal utility throughout the entire schedule.B) initially increasing marginal utility and then decreasing marginal utility.C) initially decreasing marginal utility and then increasing marginal utility. D) increasing marginal utility throughout the entire schedule.
Q:
Q:
The bid price of a Treasury bill is _________.
A. the price at which the dealer in Treasury bills is willing to sell the bill
B. the price at which the dealer in Treasury bills is willing to buy the bill
C. greater than the ask price of the Treasury bill expressed in dollar terms
D. the price at which the investor can buy the Treasury bill
Q:
When the price of a video rental was $2.00, ticket sales at the local movie theatre averaged 180 admissions per night. Then the video store reduced the price of a video rental to $1, and the theatre manager reported that ticket sales had fallen to 126 per night. What is the approximate value of the cross price elasticity of demand between video rentals and theatre tickets?A) -0.53 B) +0.30 C) +0.53 D) +1.67
Q:
Q:
Which one of the following is a true statement?
A. Dividends on preferred stocks are tax-deductible to individual investors but not to corporate investors.
B. Common dividends cannot be paid if preferred dividends are in arrears on cumulative preferred stock.
C. Preferred stockholders have voting power.
D. Investors can sue managers for nonpayment of preferred dividends.
Q:
A 2 percent increase in the price of neckties leads to a 5 percent decrease in the quantity demanded of neckties. The absolute price elasticity of demand isA) 2.5. B) 1. C) 0.4. D) 0.2.
Q:
Q:
_____ is considered to be an emerging market country.
A. France
B. Norway
C. Brazil
D. Canada
Q:
Q:
Generally, as levels of pollution are reduced,
A) marginal benefits from the reduction increase.
B) marginal costs from the reduction increase.
C) marginal costs from the reduction stay the same.
D) marginal costs from the reduction decrease.
Q:
______ would not be included in the EAFE index.
A. Australia
B. Canada
C. France
D. Japan
Q:
The poverty income threshold in the United States was originally calculated byA) multiplying a nutritionally adequate food plan for emergency use by 4. B) multiplying a nutritionally adequate food plan for emergency use by 2. C) multiplying a nutritionally adequate food plan for emergency use by 3. D) multiplying a nutritionally adequate food plan for emergency use by 5.
Q:
An investor in a T-bill earns interest by _________.
A. receiving interest payments every 90 days
B. receiving dividend payments every 30 days
C. converting the T-bill at maturity into a higher-valued T-note
D. buying the bill at a discount from the face value to be received at maturity
Q:
Quantity of LaborHourly Wage RateTotal Marginal Wage Bill Factor Cost0-- -1$10 212 314 416 518 620 In the above table, if the marginal revenue product is $14, how many workers will the profit maximizing monopsonist hire?A) 2 B) 3 C) 4 D) 5
Q:
Q:
The minimum tick size, or spread between prices in the Treasury bond market, is
A. 1/8 of a point.
B. 1/16 of a point.
C. 1/32 of a point.
D. 1/128 of a point.
Q:
There are several theories for allocating constructive gains or losses between purchasing and issuing affiliates. The Agency TheoryA) does so based on the par value of the bonds purchased.B) assigns the entire constructive gain or loss to the parent based on their control of the decision to purchase the bonds.C) assigns the entire constructive gain or loss to the subsidiary based on the need to have the noncontrolling interest share in the retirement of the debt.D) assigns the entire constructive gain or loss to whichever company issued the bonds.
Q:
A primary objective of labor unions is toA) secure equal pay for its members.B) have equal power with their employer.C) seek better pay and improved work conditions.D) all of the aboveE) none of the above
Q:
The most marketable money market security is _____.
A. Treasury bills
B. bankers' acceptances
C. certificates of deposit
D. common stock
Q:
Which of the following is FALSE regarding the general rule for hiring?A) Virtually every optimizing rule in economics involves comparing marginal benefits with marginal cost.B) The benefit from added workers is extra output and consequently more revenues.C) The firm hires workers up to the point at which the additional cost associated with hiring the last worker is equal to the additional revenue generated by that worker.D) If any firm hired fewer workers over time, profits would definitely increase at that firm.
Q:
Q:
Money market securities are sometimes referred to as cash equivalents because _____.
A. they are safe and marketable
B. they are not liquid
C. they are high-risk
D. they are low-denomination
Q:
Q:
Government policy that attempts to prevent collusion among the sellers of a product and attempts to prevent restraint of trade is known asA) social policy. B) antitrust policy. C) inherent policy. D) goodwill policy.
Q:
A dollar-denominated deposit at a London bank is called _____.
A. eurodollars
B. LIBOR
C. fed funds
D. bankers' acceptance
Q:
ʺA firm should always make complementary products incompatible with those of other firms.ʺ
Do you agree or disagree? Why?
Q:
When computing the bank discount yield, you would use ____ days in the year.
A. 260
B. 360
C. 365
D. 366
Q:
Use the following information to answer the question(s) below.Plenty Corporation issued six thousand, $1,000 par, 6% bonds on January 1, 2010, at par. Interest is paid on January 1 and July 1 of each year; the bonds mature on January 1, 2015. On January 2, 2012, Scrawn Corporation, a 75%-owned subsidiary of Plenty, purchased 3,000 of the bonds on the open market at 102.50. Plenty's separate net income for 2012 included the annual interest expense for all 3,000 bonds. Scrawn's separate net income for 2012 was $400,000, which included the bond interest received on July 1 as well as the accrual of bond interest revenue earned on December 31. Both companies use straight-line amortization of bond discounts/premiums.Using the original information, the amount of consolidated Interest Expense for 2012 wasA) $ 135,000.B) $ 180,000.C) $ 270,000.D) $ 360,000.
Q:
If Ford Motor Company and General Motors Corporation were to merge, this would representA) a vertical merger. B) a horizontal merger.C) a cartel. D) an up-and-down merger.
Q:
T-bills are issued with initial maturities of:
I. 4 weeks
II. 16 weeks
III. 26 weeks
IV. 32 weeks
A. I and II only
B. I and III only
C. I, II, and III only
D. I, II, III, and IV
Q:
Which of the following is not a money market instrument?
A. Treasury bill
B. commercial paper
C. preferred stock
D. bankers' acceptance
Q:
What are the implications of there being a large number of firms in a monopolistically competitive market?
Q:
If a monopolist is producing the quantity at which marginal revenue exceeds marginal cost, it shouldA) continue to produce this amount if it wants to maximize profits.B) reduce output if it wants to maximize profits.C) reduce price and keep output unchanged if it wants to maximize profits.D) increase output if it wants to maximize profits.
Q:
Which insurance company sold more than $400 billion of CDS contracts on subprime mortgages prior to the 2008 market crash?A. MetlifeB. AIGC. Northwestern MutualD. New York Life
Q:
What are signals? How do profits function as signals?
Q:
The Dodd-Frank Reform Act does all of the following except:
A. reduces capital requirements for banks.
B. increases transparency in the derivatives market
C. limits the risk-taking in which banks can engage
D. requires public companies to set "claw-back" provisions
E. creates an office within the SEC to oversee credit rating agencies.
Q:
The difference between LIBOR and the Treasury-bill rate
A. is called the TED spread.
B. measures credit risk in the banking sector.
C. was very low just before the 2008 financial crisis.
D. All of the options.
Q:
Use the following information to answer the question(s) below.Pfadt Inc. had $600,000 par of 8% bonds payable outstanding on January 1, 2011 due January 1, 2015 with an unamortized discount of $12,000. Senat is a 90%-owned subsidiary of Pfadt. On January 2, 2011, Senat Corporation purchased $150,000 par value of Pfadt's outstanding bonds for $152,000. The bonds have interest payment dates of January 1 and July 1. Straight-line amortization is used.Bonds Payable appeared in the December 31, 2011 consolidated balance sheet of Pfadt Corporation and Subsidiary in the amount ofA) $398,925.B) $441,000.C) $443,250.D) $450,000.
Q:
When price and marginal cost are equal for a perfectly competitive firm, the firm isA) minimizing average total cost. B) maximizing total revenue.C) maximizing economic profit. D) earning negative economic profit.
Q:
The average fixed cost curveA) is parallel to the x-axis.B) is the distance between the TC and TVC curves.C) slopes downward as output increases. D) increases as the cost of inputs rise.
Q:
Until 1999, the __________ Act separated commercial banking and investment banking activities.
A. Dodd-Frank Wall Street Reform and Consumer Protection
B. Sarbanes-Oxley
C. Glass-Steagall
D. Volker Rule
Q:
What is the random walk theory?
Q:
The Volker Rule
A. prohibits banks from proprietary trading.
B. restricts banks' investments in hedge funds.
C. restricts banks' investments in private equity funds.
D. All of the options.
Q:
An investment adviser has decided to purchase gold, real estate, stocks, and bonds in equal amounts. This decision reflects which part of the investment process?
A. asset allocation
B. investment analysis
C. portfolio analysis
D. security selection
Q:
Compared to a proprietorship, a disadvantage of a partnership isA) that profits are taxed twice.B) that it is harder to keep the firm going after the death of an owner. C) unlimited liability.D) that potential liability to each partner is greater.
Q:
Prussia Corporation owns 80% the voting stock of Stad Corporation. On January 1, 2010, Prussia paid $391,000 cash for $400,000 par of Stad's 10% $1,000,000 par value outstanding bonds, due on April 1, 2015. Stad's bonds had a book value of $1,045,000 on January 1, 2010. Straight-line amortization is used. The gain or loss on the constructive retirement of $400,000 of Stad bonds on January 1, 2010 was reported in the 2010 consolidated income statement in the amount ofA) $14,000.B) $21,600.C) $23,000.D) $27,000.
Q:
The systemic risk that led to the financial crisis of 2008 was increased by _____ .
A. collateralized debt obligations
B. subprime mortgages
C. credit default swaps
D. all of the options
Q:
Use the following information to answer the question(s) below.Pascalian Company owns a 90% interest in Sapp Company. On January 1, 2010, Pascalian had $300,000, 6% bonds outstanding with an unamortized premium of $9,000. The bonds mature on December 31, 2014. Sapp acquired one-third of Pascalian's bonds in the open market for $97,000 on January 1, 2010. Both companies use straight-line amortization of bond discounts/premiums. Interest is paid on December 31. On December 31, 2010, the books of the two affiliates held the following balances:Pascalian's books6% bonds payable $300,000Premium on bonds 7,200Interest expense 16,200Sapp's booksInvestment in Pascalian bonds $ 97,600Interest income 6,600Consolidated Interest Expense and consolidated Interest Income, respectively, that appeared on the consolidated income statement for the year ended December 31, 2010 wasA) $10,800 and $0.B) $10,800 and $6,600.C) $0 and $0.D) $16,200 and $6,600.
Q:
Basket of goods A is on an indifference curve that lies closer to the origin than basket B. From this we know thatA) the prices of the goods in A are less than the prices of the goods in B.B) the satisfaction from consuming A is more than the satisfaction from consuming B. C) the marginal utility from consuming A is less than the marginal utility from consuming B.D) the satisfaction from consuming A is less than the satisfaction from consuming B.
Q:
Which of the following is (are) true about nonconforming mortgage loans?
A. They are also known as subprime loans.
B. They have higher default risk than conforming loans.
C. They were able to be offered without due diligence.
D. All of the options are true.
Q:
QuantityPer WeekTotal UtilityAmyRobertDavidMichelle0000015.01006006029.91901200130314.72701800220419.43402400310524.04003000425628.54503600575732.94904200900837.252048001275941.451054001770Refer to the above table. Which of the four people have utility schedules characterized by the law of diminishing marginal utility?A) Amy, Robert, and David only B) Michelle onlyC) Michelle and David only D) Amy and Robert only
Q:
In recent years the greatest dollar amount of securitization occurred for which type of loan?
A. home mortgages
B. credit card debt
C. automobile loans
D. equipment leasing
Q:
Bonds issued by a company remain on their books as a liability, but are considered constructively retired whenA) the company borrows money from unaffiliated entities to re-purchase its own bonds at a gain.B) The company borrows money from an affiliate to re-purchase its own bonds at a gain.C) The company's parent or subsidiary purchases the bonds from outside entities.D) The company borrows money from an affiliate to repurchase its own bonds at a gain or at a loss.
Q:
MonthPXQXPYQYPZQZJan$10100$2050$25200Feb1090186025225Mar1070159025275Apr12501510025290May15251512025320In the above table, the cross price elasticity of demand (using averages) for Z with good X, when PX increases from $12 to $15, is approximately equal toA) +1.03 B) +2.26. C) +0.44. D) -0.44.
Q:
A major cause of the mortgage market meltdown in 2007 and 2008 was linked to ________.
A. private equity investments
B. securitization
C. negative analyst recommendations
D. online trading
Q:
If an affiliate purchases bonds in the open market, the book value of the intercompany bond liability at the time of purchase isA) always assigned to the parent company because it has control.B) the par value of the bonds less the unamortized discount or plus the unamortized premium.C) par value.D) the par value of the bonds plus the unamortized discount or less the unamortized premium.
Q:
A 3 percent increase in the price of neckties leads to a 6 percent decrease in the quantity demanded of neckties. The absolute price elasticity of demand isA) 3. B) 2. C) 0.5. D) 0.33.
Q:
Real assets are ______.
A. assets used to produce goods and services
B. always the same as financial assets
C. always equal to liabilities
D. claims on a company's income
Q:
If the price paid by a parent company to acquire the debt of a subsidiary is greater than the book value of the liability, a ________ occurs.A) realized loss on the retirement of debt from the viewpoint of the subsidiaryB) realized gain on the retirement of debt from the viewpoint of the subsidiaryC) constructive loss on the retirement of debt from the viewpoint of the consolidated entityD) constructive gain on the retirement of debt from the viewpoint of the consolidated entity
Q:
Generally, as levels of pollution are reduced,A) marginal benefits from the reduction decrease.B) marginal benefits from the reduction increase. C) marginal costs from the reduction decrease.D) marginal cost from the reduction are constant.
Q:
The inability of shareholders to influence the decisions of managers, despite overwhelming shareholder support, is a breakdown in what process or mechanism?
A. auditing
B. public finance
C. corporate governance
D. public reporting
Q:
On January 1, 2011, Bigg Corporation sold equipment with a book value of $20,000 and a 10-year remaining useful life to its wholly-owned subsidiary, Little Corporation, for $30,000. Both Bigg and Little use the straight-line depreciation method, assuming no salvage value. On December 31, 2011, the separate company financial statements held the following balances associated with the equipment:Bigg LittleGain on sale of equipment $10,000Depreciation expense $3,000Equipment 30,000Accumulated depreciation 3,000A working paper entry to consolidate the financial statements of Bigg and Little on December 31, 2011 included aA) debit to equipment for $10,000.B) credit to gain on sale of equipment for $10,000.C) debit to accumulated depreciation for $1,000.D) credit to depreciation expense for $3,000.
Q:
The official poverty rate in the United States includesA) less than 5 percent of the population.B) between 10 and 15 percent of the population.C) between 20 to 25 percent of the population. D) over 35 percent of the population.
Q:
In 2008 the largest corporate bankruptcy in U.S. history involved the investment banking firm of ______.
A. Goldman Sachs
B. Lehman Brothers
C. Morgan Stanley
D. Merrill Lynch
Q:
Quantity of LaborHourly Wage RateTotal Marginal Wage Bill Factor Cost0-- -1$10 212 314 416 518 620 In the above table, if the marginal revenue product is $18, how many workers will the profit maximizing monopsonist hire?A) 2 B) 3 C) 4 D) 5
Q:
Use the following information to answer the question(s) below.In 2011, Parla Corporation sold land to its subsidiary, Sidd Corporation, for $38,000. It had a book value of $24,000. In the next year, Sidd sold the land for $41,000 to an unaffiliated firm.The 2011 unrealized gain from the intercompany saleA) should be recognized in consolidation in 2011 by a working paper entry.B) should be eliminated from consolidated net income by a working paper entry that credits land for $14,000.C) should be eliminated from consolidated net income by a working paper entry that debits land for $14,000.D) should be eliminated from consolidated net income by a working paper entry that credits gain on sale of land for $14,000.
Q:
When a pass-through mortgage security is issued, what does the issuing agency expect to receive?
A. the amount of the original loan plus a servicing fee
B. the principal and interest that are paid by the homeowner
C. the principal and interest that are paid by the homeowner, minus a servicing fee
D. the interest paid by the homeowner, plus a servicing fee
Q:
Labor unions are organizations thatA) try to secure more opportunities for more workers in the economy. B) try to secure economic improvements for all workers.C) try to secure economic improvements for their members. D) try to make labor markets more competitive.