1) The Dow Jones industrial Average is

: a) an index of 500 largest corporate stocks in America

b) the most representative of the stock market indexes

c) an equally weighted index of all stocks traded on the New York Stock Exchange

d) an index of 30 major industrial stocks

2) The company cost of capital is the return that is expected on a portfolio of the company's:

a) existing securities

b) debt securities

c) proposed securities

d) equity securities

3) The purpose of a sinking fund is to:

a) reduce the par value of stock over time

b) allow risky corporations to avoid bankruptcy

c) periodically retire debt prior to final maturity

d) take advantage of the tax break on preferred stock