1) When a corporation wants to raise funds by issuing new stocks or bonds, it generally uses the services of _____.

a.an investment banker

b.a commercial lender

c.the Securities and Exchange Commission (SEC)

d.the New York Stock Exchange (NYSE)

e.an over the counter derivatives market

2) Which of the following is true of a general partner of a limited liability partnership (LLP)?

a.A general partner of a limited liability partnership (LLP) is fully personally liable for all business debts.

b.A general partner of a limited liability partnership (LLP)cannot participate in the management of the business.

c.A general partner of a limited liability partnership (LLP) is considered as an investor only.

d.A general partner of a limited liability partnership (LLP) is liable only to the extent of his/her investment in the partnership.

e.A general partner of a limited liability partnership (LLP) is taxed for the limited partners' share of the partnership's income.

3) The 11 sections (titles) in the Sarbanes-Oxley Act of 2002 _____.

a.require corporations to payout all the earnings as dividend

b.establish standards for accountability and responsibility in reporting financial information

c.allow management to take actions resulting in large gains to them and losses to stockholders

d.allow management to use confidential information for personal gains

e.require stockholders to make capital structure decisions

4) Which of the following is true of financial services provided by persons working in banks, insurance companies, and brokerage firms?

a.Persons working in banks, insurance companies, and brokerage firms help investors achieve the highest earnings per share.

b.Persons working in banks, insurance companies, and brokerage firms help individuals and companies determine how to invest money to achieve their financial goals.

c.Persons working in banks, insurance companies, and brokerage firms help corporations fulfill the regulations required by the Sarbanes-Oxley Act.

d.Persons working in banks, insurance companies, and brokerage firms help public corporations follow environment-friendly practices.

e.Persons working in banks, insurance companies, and brokerage firms help corporations in framing their bylaws.

5)William and Kate invest in two different securities carrying the same amount of risk. However, William earned a 10 percent return and Kate earned a 7 percent return on their investments. The additional return on William's investment is considered a(n) _____.

a.risk adjusted return

b.justified return

c.abnormal return

d.efficient return

e.premium return