1. Which of the following best describes the characteristics of common stock?

		Shareholders have a residual claim
		Liability or maximum loss limited by the purchasing investment value.
		Each common shareholder does not vote; only preferred shareholders do.
		Only 1 and 2

2. Which of the following markets is the least organized?

		Auction markets
		Brokered markets
		Direct markets
		Dealer markets

3. Industries with above-average sensitivity to the state of the economy are known as defensive industries.

True

False

4. The main goal of a financial manager is to ......

		create financial controls to operate efficiently
		generate profits year to year
		create value for the shareholders
		improve financial ratios to have better year-end company results

5. The lower the Sharpe ratio, the less steeper the CAL line, therefore the better the risk-return tradeoff.

True

False