1. Buying a newly issued bond implies:

A. borrowing money from a private bank.

B. taking over the ownership of the issuing firm.

C. lending money to the issuing firm.

D. paying the price for a service rendered by the issuing firm.

E. borrowing funds from international organizations.

2. If the earnings report of a firm indicates higher earnings than was expected by the investors:

A. the stock prices of the firm will decline.

B. the price of the product produced by this firm will decline.

C. the price of the product produced by this firm will rise.

D. the firm will spend more on advertising.

E. the stock prices of this firm will increase.

3. The face value of a bond is:

A. the amount of the coupon that is paid at equal intervals.

B. the amount repaid to the lender on maturity.

C. the percentage of company profits that is paid to the borrower.

D. equivalent to the capital gain.

E. equivalent to economic profit.

4. If people expect the price of a stock to rise in future, the demand curve for the stock:

A. becomes positively sloped.

B. shifts to the right.

C. becomes horizontal.

D. becomes vertical.

E. shifts to the left.

5. When a price rise of an asset can be justified by fundamental concepts and past experiences, then such a price rise does not constitute a classic bubble.

A. True

B. False

6. All of the following will shift the demand curve for capital, except:

A. future expectations about the demand for the good produced by a firm.

B. technological changes.

C. the price of capital.

D. the entry of new firms into the market.

E. the change in the interest rate.

7. If both demand for and supply of capital increase by equal amounts, then the equilibrium price of capital goes up, and the equilibrium quantity of capital increases.

A. True

B. False

8. The fixed amount that the issuer of a bond agrees to pay the bondholder each year until the bond matures is called:

A. rent.

B. coupon.

C. interest.

D. load.

9. A firm decides to hire more equipment if:

A. the average revenue it earns by selling its output is equal to its average cost.

B. its total revenue is greater than the total cost of hiring the equipment.

C. the marginal revenue product of the additional unit of equipment is greater than the marginal factor cost.

D. its average revenue is greater than the average cost of hiring equipment.

E. the price of its product is greater than the average cost of production.

10. A stock index measures the:

A. change in dividend payments of a group of stocks.

B. change in the trading volume in the stock exchange.

C. price movements of a group of stocks.

D. change in the number of enlisted companies.

PLEASE ANSWER ALL 10 QUESTIONS ABOVE CORRECTLY, I WILL GIVE YOU A FEEDBACK! THANK YOU SO MUCH.