2) The yield curve in 2009 was very low, with short-term rates close to zero and long-term rates below 5 percent. What factors contributed to such low interest rates?

Please refer to table below for the following question.

Jones Company

Financial Information

	December 2009	December 2010
Net Income	$2,000	$4,000
Accounts receivable	750	950
Accumulated depreciation	1,000	1,500
Common stock	4,500	5000
Paid-in capital	7,500	8500
Retained earnings	1,500	3,500
Accounts payable	750	750

3) Based on the information in Table 3-1, calculate the amount of dividends paid by Jones Company in 2010 (no assets were disposed of during the year, and there was no change in interest payable or taxes payable).

A) $2,000

B) $2,500

C) $3,500

D) $4,000

Please refer to table below for the following question.

Stewart Company

Balance Sheet

Assets:
Cash and marketable securities		$600,000
Accounts receivable		900,000
Inventories		1,500,000
Prepaid expenses		75,000
Total current assets		$3,075,000
Fixed assets	8,000,000
Less: accum. depr.	(2,075,000)
Net fixed assets		$5,925,000
Total assets		$9,000,000
Liabilities:
Accounts payable		$800,000
Notes payable		700,000
Accrued taxes		50,000
Total current liabilities		$1,550,000
Long-term debt		2,500,000
Owner's equity (1 million shares of common stock outstanding)		4,950,000
Total liabilities and owner's equity		$9,000,000
Net sales (all credit)		$10,000,000
Less: Cost of goods sold		(3,000,000)
Selling and administrative expense		(2,000,000)
Depreciation expense		(250,000)
Interest expense		(200,000)
Earnings before taxes		4,550,000
Income taxes		(1,820,000)
Net income		$2,730,000

4) Based on the information in the table, the current ratio is

A) 1.92.

B) 1.98.

C) 2.86.

D) 2.88.