1. Maximization of shareholders wealth is a concept in which * 2 points A increased earnings is of primary importance B profits are maximized on a quarterly basis C virtually all earnings are paid as dividends to common stockholders D optimally increasing the long-term value of the firm is emphasized

2. Which of the following is a result of a high inflation? * 2 points A Phantom Profits B Under-valued Assets C Lower Profitability D All of the given choices

3. As opposed to most other debt instruments, mortgage loans tend to * 2 points A charge lower interest rates B be of larger denomination C pay interest less frequently D be repaid over the life of the loan

4. If Firm A's business is to obtain savings from individuals and then invest them in financial assets issued by other firms or individuals, Firm A is a financial intermediary. * 2 points TRUE FALSE

5. This market trades previously issued securities * 2 points A Restructuring B Capital markets C money markets D real capital E Inflation F Primary market G Secondary market H Disinflation I Financial capital