1. Whi ch of the following is the function of a financial market A) provide liquidity B) risk management C) efficient allocation of money D) all of the above E) None of the above 2. Which of the following is the meaning of the function of efficient allocation of capital in the financial market? A) every company in the market can always get a lot of capital. B) investors always like to invest their money in the best company in the market C) investors tend to invest in the least risky firm in the financial market D) investors like to put their money in the highest return investment opportunity E) none of the above 3. One common reason for partnerships to convert to a corporate form of organization is that the partnership: A) faces rapidly growing capital requirements B) wishes to avoid taxation of profits. C) has issued all of its allotted shares. agreement expires after ten years of use. none of the above D) E) Which of the following is the advantage of a corporation A) double taxation B) unlimited liability C) profit is taxed twice D) Owners are the managers E) None of the above 4. Which of the following statements best distinguishes the difference between real and financial assets? A) Real assets have more value than financial assets. B) Real assets are tangible; financial assets are not. 5. C) Financial assets represent the voting power on real assets. D) Financial assets claim to cash flows that are generated by real assets. E) None of the above Please use the following information for questions 6 to 8 You have borrowed a loan of $20,000 from a bank to buy a car from Chase at the interest rate of 7.5% each year. You have promised the Chase to make mortgage style payments 6. If you want to borrow this loan for three years, what is the principal payment in year one? A) $6,191