1)There are a number of different stock market indexes that differ primarily because they include different combinations of stocks; but, the computation for each index is essentially the same.

True

False

The risk of default on pledged accounts receivable is borne by the lender to whom the receivables are pledged.

True

False

2)The holding period return associated with an interest-paying bond is computed by determining the change in the market value of the bond over a particular time period.

True

False

3)Generally speaking, the P/E multiples are higher for firms with ____ expected growth rates and ____ expected required rates of return.

	a.	lower; higher
	b.	higher; higher
	c.	higher; lower
	d.	lower; lower

When the Federal Reserve wants to slow down the economy that is growing at an unsustainable rate, the Federal reserve can

	a.	increase interest rates by decreasing the money supply.
	b.	decrease interest rates by decreasing the money supply.
	c.	increase interest rates by increasing the money supply.
	d.	decrease interest rates by increasing the money supply.