16. . If you buy 100 shares of Intel stock when it goes from $85 to $110, how much did you

make or lose?

A. +$250 B -$3,000 C +$2,500 D -$2500

17. In the event of the firm's bankruptcy

A. the most shareholders can lose is their original investment in the firm's stock.

B. common shareholders are the first in line to receive their claims on the firm's assets.

C. bondholders have claim to what is left from the liquidation of the firm's assets after paying the

shareholders.

D. the claims of preferred shareholders are honored before those of the common shareholders.

E. the most shareholders can lose is their original investment in the firm's stock and the claims of

preferred shareholders are honored before those of the common shareholders.

18. Which of the following terms mean the same thing

a. APR, EAR, nominal rate

b. APR, annual rate, nominal rate

c. EAR, annual rate, nominal rate

d. APR, EAR, annual rate

19 A perpetuity:

a. has infinite value because the payments continue forever

b. can be valued (PV) if the payment amount and interest rate are known

c. don't exist in the financial world

d. none of the above are true

20. The basic rule of the time value of money is:

a. investments will always be worth more tomorrow than they are today

b. it's always wiser to save a dollar for tomorrow than to spend it today

c. a dollar in hand today is worth more than a dollar promised at some time in the future

d. all of the above express an aspect of the basic rule of time value of money