Diversification Liquidity Income Question 6. Question : (TCO 5) A $1,000 corporate bond pays 7.5% a year. What is the annual interest you will receive? $1,075 $7.50 $0.75 $75.00 $0 Question 7. Question : (TCO 5) _____ risk occurs when an investment does not keep up with increasing price levels in our economy. Market Interest Inflation Business failure Current Question 8. Question : (TCO 5) John Farmer recently received a legal form from the company where he owns stocks that list the issues to be decided at the annual stockholders’ meeting. The item asks that he signs something that allows someone else to vote for him. What has he received? Equity Proxy Voting rights Dividends None of the above Question 9. Question : (TCO 5) Matt Dannon just bought the stock of a company that provides him with the responsibility to approve major company actions. Which one of the following best characterizes this responsibility? Voting rights Proxy Equity Dividends None of the above
Question 10. Question : (TCO 5) If Orlando Blodgett is buying the stock of the Getaway Caribbean Cruise Company. If he buys the stock today, knowing it is the first day it is selling without the dividend for this quarter, on what date is Orlando buying the stock? Record date Sale date Payment date Ex dividend date None of the above Question 11. Question : (TCO 5) Lindsey Holt owns stock in the Galloway Gems Company. She knows she will receive a $1.50 dividend each quarter. Given this, you know for sure that she purchased which type of stock? Preferred Common Blue chip Growth Penny Question 12. Question : (TCO 5) Dividends must be approved by a firm’s board of directors, and dividend payments are paid out of profits. dividends are guaranteed. dividends are paid before a firm’s taxes are paid. dividends are usually paid twice a year. dividends can be paid forever. Question 13. Question : (TCO 5) One option for long-term corporate financing is equity financing, and this is a popular choice because a lender is always available to provide this type of financing. it does not cost anything to sell in the primary market. repayment doesn’t have to be made for 10 years or more. only interest must be paid for the first 5 years. it does not have to be repaid. Question 14. Question : (TCO 5) Dividends will remain with the stock until 5 days after the date of record. two business days after the date of record. 5 days before the date of record. two business days before the date of record. 5 days before the actual payment date.