CORRECT VERIFIED ANSWERS/AGRADED/BEST FOR
PRACTICE
• The stock price of a company increases and the market is deemed efficient. What
assumption can be made?
A. Anew, patented, product was introduced to the market.
B. New machinery was purchased with a useful life of 20years.
C. Management is optimizing its resources and operating efficiently.
D. Management hired new employees and invest Edina training program.
• Which statement is true about how the global market affects the U.S.
A. A bad options trade executed by a foreign subsidiary of a Wall Street bank will affect lay
offs overseas.
B. A Bad derivatives trade executed by a foreign subsidiary of a Wall Street bank will affect
lay offs overseas.
C. American investors and fund-managers make decisions based on financial reporting
standards developed and financial statements audited overseas.
D. Foreign investors and fund managers make decisions based on financial reporting
standards developed and financial statements audited overseas.
• What are secondary markets?
A. Markets where securities are traded subsequent to the initial offering.
B. Markets were securities are issued for the first time.
C. Markets were securities are issued through a competitive sale.
D. Markets where securities are issued through a negotiated sale.
• A special interest group in the U.S. has been lobbying intensely for protection is through
increased tariffs and trade restrictions, with the argument that it will save jobs in the
industry they represent. What is the most likely result if they are successful?
A. Employees and shareholders of the domestic industry that produce the protective goods will
, be hurt and the nation will benefit.
B. Theoverall economywill benefit fromtraderestrictionsandtariffs.
C. Removingthetraderestrictionsandtariffswill resultinanet economiclosstotheoverall U.S.
economy.
D. Employeesandshareholdersof thedomesticindustrythat producetheprotectedgoodswill
benefit andthenationwill behurt.
• What dothecontent andstructureofabalancesheetreport?
Theassets, liabilities, andequityatapoint intime
• What isthebasisusedtocomputeacompany'sincometaxexpense?
A. Pretaxaccountingincome.
B. Taxableincome.
C. Netoperatinginc
ome.D.
Taxespayable.
• What isthefirm’scashflowfromfinancing, usingthedataabove?
, Net Income $10
00
DepreciationExpense $30
0
Changeinoperatingas $60
sets 0
Changeinnet PP&E $50
00
Changeinlong-termLiabilities $1000