FIN 341 FINAL UPDATED ACTUAL HIGH-YIELD
TOPICS SUMMARY 2026
◉ In a dutch auction, stocks are sold at the highest bid price that
would sell all of the shares in the offering.
Answer: True
◉ When a company puts out a bond issue and then two years later
puts out another bind issue, the second bond is being sold on the
secondary market.
Answer: False, the first bond is being sold on the secondary market.
◉ A dealer's profit is the bid-ask spread, and this spread generally
becomes larger when the stock is traded more often.
Answer: False, ?
◉ When interest rates are low, an investor should consider buying
bonds and then selling them once interest rates go back up nil they
want to make capital gains on bonds.
Answer: False, buy when high, sell when low.
◉ As U.S. rates go up, the dollar should strengthen and help U.S.
companies that import goods
,Answer: True
◉ The repeal of the Glass Steagall Act of 1933 under President
Clinton's administration has been partially blamed for the 2008-09
crisis.
Answer: True
◉ Upper corporate managers are highly motivated to give their
stockholders an appropriate return on the stock because if the
stockholders start selling the stock, the company's stock price will
decrease and the company can become a takeover target.
Answer: True
◉ Stock prices have increased significantly since President Trump
was elected due to expectations that the US economy will gain
strength in the future from lower corporate tax rates, repatriation of
corporate cash from abroad, and some deregulation of business.
Answer: True
◉ The spread between yield curves of corporate bonds and Treasury
bonds is larger the longer the maturity because the corporate bonds
are considered riskier if they have a long time to maturity, and
because of this extra risk, they are less liquid.
Answer: True
, ◉ If the Fed lowers rates, it could cause foreigners to sell their US
bonds. They would be paid in dollars, which they would then sell,
raising the value of the dollar and helping US manufacturers export
goods.
Answer: False, selling dollars makes more of a supply, lower the
price of the dollar
◉ The US had large trade surpluses for about 25 years following
World War II, but has had trade deficits since the mid-1970s.
Answer: True
◉ When the Fed fights a recession by reducing the interest rate, that
is known as "firing the gun," to protect the economy.
Answer: True
◉ If a corporations owns real estate for 10 years or more and then
sells it, the tax on the profit would be capped at 20%.
Answer: False, corporations don't get a tax cap
◉ If an individual has $12,000 of capital gains and $19,000 of capital
losses this year, that person will pay no tax on the capital gains, and
will be able to keep $3,000 of his salary from being taxed this year
and then carry the other $7,000 of capital loss forward for up to 15
years.
Answer: False, $4,000 is the amount that will be rolled forward.
TOPICS SUMMARY 2026
◉ In a dutch auction, stocks are sold at the highest bid price that
would sell all of the shares in the offering.
Answer: True
◉ When a company puts out a bond issue and then two years later
puts out another bind issue, the second bond is being sold on the
secondary market.
Answer: False, the first bond is being sold on the secondary market.
◉ A dealer's profit is the bid-ask spread, and this spread generally
becomes larger when the stock is traded more often.
Answer: False, ?
◉ When interest rates are low, an investor should consider buying
bonds and then selling them once interest rates go back up nil they
want to make capital gains on bonds.
Answer: False, buy when high, sell when low.
◉ As U.S. rates go up, the dollar should strengthen and help U.S.
companies that import goods
,Answer: True
◉ The repeal of the Glass Steagall Act of 1933 under President
Clinton's administration has been partially blamed for the 2008-09
crisis.
Answer: True
◉ Upper corporate managers are highly motivated to give their
stockholders an appropriate return on the stock because if the
stockholders start selling the stock, the company's stock price will
decrease and the company can become a takeover target.
Answer: True
◉ Stock prices have increased significantly since President Trump
was elected due to expectations that the US economy will gain
strength in the future from lower corporate tax rates, repatriation of
corporate cash from abroad, and some deregulation of business.
Answer: True
◉ The spread between yield curves of corporate bonds and Treasury
bonds is larger the longer the maturity because the corporate bonds
are considered riskier if they have a long time to maturity, and
because of this extra risk, they are less liquid.
Answer: True
, ◉ If the Fed lowers rates, it could cause foreigners to sell their US
bonds. They would be paid in dollars, which they would then sell,
raising the value of the dollar and helping US manufacturers export
goods.
Answer: False, selling dollars makes more of a supply, lower the
price of the dollar
◉ The US had large trade surpluses for about 25 years following
World War II, but has had trade deficits since the mid-1970s.
Answer: True
◉ When the Fed fights a recession by reducing the interest rate, that
is known as "firing the gun," to protect the economy.
Answer: True
◉ If a corporations owns real estate for 10 years or more and then
sells it, the tax on the profit would be capped at 20%.
Answer: False, corporations don't get a tax cap
◉ If an individual has $12,000 of capital gains and $19,000 of capital
losses this year, that person will pay no tax on the capital gains, and
will be able to keep $3,000 of his salary from being taxed this year
and then carry the other $7,000 of capital loss forward for up to 15
years.
Answer: False, $4,000 is the amount that will be rolled forward.
