MBA 612 Week 5 Quiz With Complete Solutions
Which of the following statements are true? - ANSWER The value of any investment is
based on the cash flows it is expected to generate in the future.
An American Depository Receipt (ADR) represents - ANSWER Choose from 1 of the
following.
Debt sold by a foreign borrower that is denominated in the currency of the country
where it is sold.
Stock of foreign companies that is sold directly to investors in the United States.
Equity instruments of one country that are sold in another country.
Certificates representing ownership in stocks of foreign companies that are held in trust
by a bank located in the country the stock is traded.
20. Assume the securities are all issued by the same firm. From the investor's
standpoint, rank the following securities in order of increasing risk (the number of the
least risky security is placed first, or to the left, in the answer set).
(1)
Preferred stock.
(2)
Income bonds.
(3)
Convertible preferred stock.
(4)
Mortgage bonds.
A. 1, 2, 3, 4B. 4, 1, 2, 3C. 4, 1, 3, 2*D. 4, 2, 1, 3E. 4, 2, 3, 1
Corporations issue and purchase a variety of financial securities for all of the following
reasons EXCEPT - ANSWER all of the above are reasons to issue or purchase financial
securities
Which of the following statements are true? - ANSWER The value of any investment is
based on the cash flows it is expected to generate in the future.
An American Depository Receipt (ADR) represents - ANSWER Choose from 1 of the
following.
Debt sold by a foreign borrower that is denominated in the currency of the country
where it is sold.
Stock of foreign companies that is sold directly to investors in the United States.
Equity instruments of one country that are sold in another country.
Certificates representing ownership in stocks of foreign companies that are held in trust
by a bank located in the country the stock is traded.
20. Assume the securities are all issued by the same firm. From the investor's
standpoint, rank the following securities in order of increasing risk (the number of the
least risky security is placed first, or to the left, in the answer set).
(1)
Preferred stock.
(2)
Income bonds.
(3)
Convertible preferred stock.
(4)
Mortgage bonds.
A. 1, 2, 3, 4B. 4, 1, 2, 3C. 4, 1, 3, 2*D. 4, 2, 1, 3E. 4, 2, 3, 1
Corporations issue and purchase a variety of financial securities for all of the following
reasons EXCEPT - ANSWER all of the above are reasons to issue or purchase financial
securities
