1.Currently in the US capital market, as we have discussed in class, a stock is said to trade on spot markets because the agreement on the terms and the exchange take place immediately with a settlement set at T+3.

True

False

Which of the following includes other sources of income or expenses that arise from activities that are not a central part of a company's business?

	a.	Earnings Before Interest and Taxes (EBIT)
	b.	Gross Profit
	c.	Operating Income
	d.	Operating Expenses

RCS, Inc.

Gross fixed assets 284,950

Inventory 136,500

Accrued expenses 11,850

Accumulated depreciation 82,310

Notes payable 32,570

Preferred stock 8,000

Retained earnings 89,280

Current portion of L-T debt 4,080

Long-term debt 134,300

Accounts receivable 105,770

Additional paid-in capital 71,600

Accounts payable 50830

Common stock ($0.20 par) 60,000

Cash 17,600

3.Referring to the above balance sheet accounts for RCS, Inc. for the year ending Dec 31, 2016, the number of common shares issued by the company is closest to

	a.	658,000
	b.	12,000
	c.	300,000
	d.	26,320

4.At the close of a certain trading day, your friend notices that the volume of the stock shares of a corporation was significantly higher than the average. Your friend then concludes that the companys stock price must be higher than the previous close price. Your friends inference is correct.

True

False