1. A bear market refers to a market that

a) is trading a very low volumes

b) has been trending down for an extended period

c) has been trending up for an extended period

d) has increased at least 10% from its most recent low point

2. An IPO refers to what?

a) the first time a company offers shares of stock for sale to the public

b) the first time a company offers bonds for sale to the public

c) the Internet Privacy Officer at the company

d) the first time a company offers their product for sale to the public

3. Preemptive rights give a stock owner the right to

a) purchase shares of subsequent stock offerings such that he/she maintains the same proportional ownership of the company b) buy shares of a company's stock before anyone else

c) vote for company directors before any other shareholders

d) buy and sell the company's stock in pre-market trading

4. Andrew likes the idea of constant cashflow, so he is going to buy a share of preferred stock that is paying a quarterly dividend. The par value is $50 with an annual dividend rate of 9%. If Andrew requires a return of 11%, what is the most he would pay for this stock? a) 40.91

b) 71.59

c) 163.64

d) 10.23

5. Bianca is looking at a stock with dividends that are growing at 5%. She expects to own the stock for 8 year, then sell it for $50. This year's dividend was $1.46. Which approach should Bianca use to value this stock? Choose the best answer.

a) Constant dividend, infinite horizon -> Perpetuity

b) Constant dividend, finite horizon > Bond

c) Growing dividend, infinite horizon Gordon Model

d) Growing dividend, finite horizon Gordon Model with Terminal Value (Big nasty formula )