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Exam 19: Using Securities Markets for Financing and Investing Opportunities

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Question 201

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Bonds sold at a ________ sell for less than face value.

A) secondary market
B) discount
C) premium
D) date before the maturity date

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Question 202

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Bonds, like stocks, trade daily on major security exchanges.

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Question 203

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After buying 200 shares of common stock in Epic Electronics for $20 per share, Rashad later sold the same shares for $25 per share. Rashad's capital gain on the total transaction is:

Therese prefers corporate bonds as an investment option because investors always receive the face value of the bond whenever it is sold.

Growth stocks offer investors the attractive combination of low risk and high returns.

Most businesses prefer to meet their long-term financial needs through

Many stock market analysts suggest that program trading was a big cause of the stock market crash of 1987.

Securities markets represent the financial marketplaces for stocks and bonds.

For the firm, the cost of paying dividends to common stockholders is higher than the cost of the same amount of interest paid to bondholders.

Young investors place more importance on low-risk investments, while elderly investors prefer significant growth in the value of their investments.

Insider trading involves the sale of stock to employees at discounted prices.

Your Uncle Mike is approaching retirement and he asks for your advice for a safe place to invest several thousand dollars. He wants to receive some kind of payment each year for investing his money without a great deal of risk. You explain

A bull market occurs when overall stock prices increase.

Hallie owns 20% of the common stock of the Bean Brothers Coffee Company. The company announced plans to offer an additional 10,000 shares of common stock for sale. If Hallie exercises her preemptive rights, Bean Brothers must offer her the opportunity to purchase

Bonds sold at a discount are sold for more than the bond's face value.

A stock split refers to buying a share of stock at a discounted price if full payment is made at the time of purchase.

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