1. Assume there are 5 seats to vote in the board of directors. There are only three shareholders: Arnold (100 shares), Beth (40 shares), and Charles (60 shares). With cumulative voting Charles can elect at least _________.

Select one:

a. zero directors

b. one director

c. two directors

d. three directors

2If a savings account pays an annual interest of 2% compounded quarterly, then the quarterly interest rate should be less than 0.5%.

Select one:

True

False

3.If a company is liquidated, preferred shareholders have a first claim on the company assets than subordinate debt holders.

Select one:

True

False

4Assume you invest $20,000 with expected cash flows of $10,500 and $11,025 in periods one and two respectively. If the discount rate is 5% then the net present value of your investment is $1,525.

Select one:

True

False

5.An example of indirect finance is when companies issue bonds instead of getting loans from commercial banks.

Select one:

True

False