1. 1. INTEREST IS THE COST OF BORROWING MONEY.

True

False

2. 2. COMPANIES WHICH ARE UNABLE TO PAY THEIR DEBTS CAN BE FORCED INTO BANKRUPTCY BY THEIR CREDITORS.

True

False

3. 3. ALL BANKRUPTCIES END IN THE LIQUIDATION OF THE BANKRUPT COMPANY.

True

False

4. 4. INTEREST IS A TAX-DEDUCTIBLE EXPENSE.

True

False

5. 5. FINANCIAL LEVERAGE REFERS TO A COMPANYS ABILITY TO PAY OFF ITS DEBTS AS THEY COME DUE.

True

False

6. 6. A COMPANY IS SAID TO BE EMPLOYING FINANCIAL LEVERAGE IF THE EXTRA INCOME GENERATED FROM BORROWED MONEY IS MORE THAN THE COST OF THE RELATED INTEREST.

True

False

7. 7. A NOTE IS A WRITTEN CONTRACT THAT SPECIFIES THE PAYMENT OF DESIGNATED AMOUNTS OF CASH BY THE DEBTOR ON STATED DATE.

True

False

8. 8. BONDS ARE TYPICALLY SOLD TO A GROUP OF PEOPLE, OFTEN THE GENERAL PUBLIC.

True

False

9. 9. DEBT INSTRUMENTS ISSUED TO THE PUBLIC ARE SUBJECT TO THE REGULATION OF THE SEC.

True

False

10. 10.MORTGAGE AGREEMENTS PROVIDE A LENDER WITH INTEREST IN IDENTIFIED PROPERTY ALLOWING THE LENDER TO REPOSSESS THE PROPERTY SHOULD THE BORROWER FAIL TO REPAY A LOAN.

True

False