Download Wall Street Exam | 100% Correct Answers | Verified | Latest 2024 Version and more Exams Health sciences in PDF only on Docsity!
Wall Street Exam | 100% Correct Answers |
Verified | Latest 2024 Version
Insider trading occurs when - ✔✔someone has information not available to the public which they use to profit from trading in stocks Mortimer and Randolph Duke, the two corrupt, septuagenarian brothers who run a - ✔✔commodities brokerage house Which of the following a major factor influencing the growth and change of employee benefits? - ✔✔the government Which of the following groups does not bear a disproportionate burden of poverty? - ✔✔the elderly An investor who accepts the risk of a loss in exchange for the chance to earn a profit is referred to as which of the following? - ✔✔speculator A company's ____ are potentially the most effective instrument of good corporate governance. - ✔✔board of directors The value of cost of a good or service that is given up by choosing one alternative over another is called - ✔✔an opportunity cost If you open a margin account with your broker, you can buy twice as much stock as you actually have the cash to purchase. - ✔✔Fact Standard Census data on the distribution of income: - ✔✔are before taxes in that they do not account for personal income and payroll taxes Diversification is investing in a variety of assets with which one of the following as the primary goal? - ✔✔reducing some risks
Which one of the following is an underlying assumption of the dividend growth model? - ✔✔a stock's value is equal to the discount present value of the future cash flows which it generates Some economists have criticized government figures on income inequality, arguing that these data - ✔✔overestimate the degree of income inequality by failing to include non cash transfers as income Which of the following groups has the highest poverty rate? - ✔✔female-headed families Agent costs are incurred by a corporation because - ✔✔all of the above The following are examples of financial assets except - ✔✔patents Scarcity arises because of - ✔✔a finite amount of resources A financial instrument on which a futures contract is based is called which one of the following? - ✔✔underlying assets The long-run objective of financial management is to - ✔✔maximize the value of the firm's common stock Income - ✔✔is a flow concept What are the earnings per share or a company that earned $100,000 last year in after-ta profits, has 200,000 common shares outstanding and $1.2 million in retained earnings at the year end? - ✔✔$0. In economics, efficiency refers to the property of society getting the most it can from its scarce resources
National Trucking has paid an annual dividend of $1.00 per share on its common stock for the past fifteen years and is expected to continue paying a dollar a share long into the future. Given this, one share of the firms stock is - ✔✔priced the same as a $1 perpetuity Which of the following would likely reduce income inequality - ✔✔a reduction in the number of high school dropouts The decision functions of financial management can be broken down into the decisions - ✔✔financing and investment What are the securities which are created by splitting the cash flows from mortgage pools according to specific allocation rules called? - ✔✔collateralized mortgage obligations Which of the following groups has the lowest poverty rate? - ✔✔married-couple families Limited liability is an important feature of - ✔✔corporation The dividend growth model i: assumes that dividends increase at a constant rate forever. ii: can be used to compute a stock price at any given point in time iii: can be use to value zero-growth stocks. iv: requires the growth rate to be less than the required return - ✔✔i, ii, iii, and iv The following are examples of foreign-based corporations except - ✔✔General Electric Trade between two countries - ✔✔can make both countries better off A 30-year bond issued by Gary's Plaid Pants Warehouse, Inc., in 1997 would now trade in the - ✔✔secondary capital market The focal point of financial management in a firm is - ✔✔the creation of value for shareholders
Mortgage back securities are defined as securities whose investment returns are based on which of the following? - ✔✔pool of mortgages An agent who maintains an inventory from which he or she buys and sells securities is called a - ✔✔dealer How are financial markets designed to discourage arbitrage? - ✔✔securities are priced evenly in all trading arenas In a market economy, economic activity is guided by - ✔✔prices are incentives to both buyers and sellers Differences in the amounts and quality of education and training - ✔✔combine with difference in mental, physical, and aesthetic talents to produce income inequality An investor who shifts risk is referred to as which of the following? - ✔✔hedger The following cities are also important financial center of the world - ✔✔all of the above The market price of a share of common stock is determined by - ✔✔individuals buying and selling the stock "Shareholder wealth" in a firm is represented by - ✔✔the market price per share of the firm's common stock Individuals who continually monitor the financial markets seeking misplaced securities - ✔✔make the markets increasingly more efficient The Dukes intend to "corner the markets" - ✔✔true Corporations, potentially, have infinite life because - ✔✔it is a legal entity
Benefits from trade would NOT include - ✔✔reduced competition Which of the following best describes the two primary elements of benefits programs? - ✔✔income protection and pay for time not worked Which of the following best describes the business strategy? - ✔✔a broad plan for competitively positioning products supporting the mission The following are advantages of separating or ownership and management of corporation except - ✔✔insure agency costs The report the Dukes receive indicates - ✔✔extensive damage to the Florida orange crop, due to a hard freeze Sarbanes-Oxley Act of 2002 (SOX) was largely a response to - ✔✔a series of corporate scandals involving Enron, WorldCom, Global Crossing, Tyco and numerous others Inflation is an increase in the overall level of prices in the economy and is usually caused by growth in the quantity of money - ✔✔True All kinds of speculative arbitrage rely in techniques that magnify risk and reward for the investor. This is known as: - ✔✔leveraging The following are examples of the US based corporations expect - ✔✔Unilever Hedging involves - ✔✔taking a futures position opposite to one's cash market position You are a baker and need to purchase a substantial amount of wheat flour three months from now in preparation for your busy season. Your concern is that the price of wheat will increase substantially before you make your purchase. Which of the following positions in wheat would be an effective hedge for you? - ✔✔long position in futures market
Adam Smith argues that when the government prevents prices from adjusting naturally to supply and demand, it aids the invisible hand's ability to coordinate the millions of households and firms that make up the economy - ✔✔False When referring to stocks, what does the term market capitalization mean? - ✔✔total dollar value of a company's outstanding stock If you opt to purchase shares of stock on margin rather than with cash, you will - ✔✔increase your maximum potential rate of return The following are examples of real assets except - ✔✔common stock How are funds allocated efficiently in a market economy - ✔✔the economic unit is willing to pay the highest expected return receives the fund So they order their agent to - ✔✔buy a ton of orange juice futures right before the data is officially announced, on the premise that the freeze will cause a shortage of oranges and the value of the contracts to surge Which of the following is NOT an example of a financial intermediary? - ✔✔International Business Machines, Inc. (IBM) Which of the following does not help explain growing income inequality since 1969? - ✔✔declining returns to education as college graduates have trouble finding jobs increased immigration If you have along cash position and do not hedge it, you are - ✔✔all of the above Stacy purchased a stock last year and sold it today for $3 a share more than her purchase price. She received a total of $0.75 in dividends. Which one of the following statements is correct in relation to this investment? - ✔✔the capital gains yield is positive
Last year, T-bills returned 2 percent while your investment enlarge-company stocks earned an average of 5 percent. Which one of the following terms refers to the difference between these two rates of return?
