D775 Study Set NEW UPDATED ACTUAL Questions and
CORRECT Answers
What does a share of common stock represent? Ownership in a company
Which stock type usually includes voting rights? Common
Preferred stock is often referred to as: Hybrid security
Which statement is true about preferred stockholders? They receive fixed dividends
What is market capitalization? Price per share × number of shares
Bonds are best described as: IOUs or loans
What is the coupon rate in a bond? Interest payment percentage
What happens when a bond reaches maturity? Debt is paid in full
Municipal bonds are typically: Issued by local governments
Treasury bonds are favored by firms because: They are low-risk
Derivatives get their value from: Other underlying assets
What does an option contract provide? Right to buy or sell
Futures contracts: Obligate purchase/sale at a future date
Investment funds pool money to: Invest in diversified portfolios
Mutual funds are priced based on: Net Asset Value (NAV)
ETFs are traded: Like individual stocks
Hedge funds are: For accredited investors
Pension funds are primarily used for: Retirement savings
One benefit of investment funds is: Diversification
A key feature of hedge funds is: High-risk strategies
Public markets involve: Securities sold on public exchanges
, Companies in public markets must comply with: SEC regulations
Which of the following is a benefit of public markets? Liquidity
Private markets typically offer: Greater flexibility
A primary market is where: Companies issue securities for the first time
What is a secondary market? Where existing securities are traded
NASDAQ is an example of a: Dealer market
NYSE is an example of an: Auction market
In a dealer market, the dealer: Holds inventory and earns spread
In an auction market, price is set by: Supply and demand
What is the first role of business finance? Using financial ratios
Time value of money helps businesses: Choose projects
The cost of capital helps: Fund chosen projects
Business finance is also known as: Corporate finance
A financial manager's job includes: Measuring project success
Which is a key tool for financial managers? NPV
Which function is part of capital budgeting? Evaluating investment projects
What role does TVM play in finance? Values future cash flows
Financial analysts use models to: Choose projects
Ratio analysis helps in: Managing business health
GDP measures: Total value of goods/services
Rising GDP generally indicates: Expanding economy
CPI tracks: Consumer-level prices
PPI tracks: Wholesale-level prices
Cost-push inflation Caused by: Production cost increases
CORRECT Answers
What does a share of common stock represent? Ownership in a company
Which stock type usually includes voting rights? Common
Preferred stock is often referred to as: Hybrid security
Which statement is true about preferred stockholders? They receive fixed dividends
What is market capitalization? Price per share × number of shares
Bonds are best described as: IOUs or loans
What is the coupon rate in a bond? Interest payment percentage
What happens when a bond reaches maturity? Debt is paid in full
Municipal bonds are typically: Issued by local governments
Treasury bonds are favored by firms because: They are low-risk
Derivatives get their value from: Other underlying assets
What does an option contract provide? Right to buy or sell
Futures contracts: Obligate purchase/sale at a future date
Investment funds pool money to: Invest in diversified portfolios
Mutual funds are priced based on: Net Asset Value (NAV)
ETFs are traded: Like individual stocks
Hedge funds are: For accredited investors
Pension funds are primarily used for: Retirement savings
One benefit of investment funds is: Diversification
A key feature of hedge funds is: High-risk strategies
Public markets involve: Securities sold on public exchanges
, Companies in public markets must comply with: SEC regulations
Which of the following is a benefit of public markets? Liquidity
Private markets typically offer: Greater flexibility
A primary market is where: Companies issue securities for the first time
What is a secondary market? Where existing securities are traded
NASDAQ is an example of a: Dealer market
NYSE is an example of an: Auction market
In a dealer market, the dealer: Holds inventory and earns spread
In an auction market, price is set by: Supply and demand
What is the first role of business finance? Using financial ratios
Time value of money helps businesses: Choose projects
The cost of capital helps: Fund chosen projects
Business finance is also known as: Corporate finance
A financial manager's job includes: Measuring project success
Which is a key tool for financial managers? NPV
Which function is part of capital budgeting? Evaluating investment projects
What role does TVM play in finance? Values future cash flows
Financial analysts use models to: Choose projects
Ratio analysis helps in: Managing business health
GDP measures: Total value of goods/services
Rising GDP generally indicates: Expanding economy
CPI tracks: Consumer-level prices
PPI tracks: Wholesale-level prices
Cost-push inflation Caused by: Production cost increases
