28) All of the following can be factors that influence business failure risk excep A) Competition. B) Bad management. C) Unsuccessful products. D) All of the above can affect business failure risk. E) None of these can affect business failure risk. 29) Business failure risk A) Cannot be diversified. B) Is associated with government bonds. C Causes the business to be less profitable than originally anticipated. D) Causes the business to increase its dividends. E) In the worst case, leads to improved earnings. 30) 30) Timothy Calibe purchased common stock in XYZWidgets.com. To be a successful investor, he should A) Buy bonds in XYZWidgets.com. B) Buy preferred stock in XYZWidgets.com. C) Buy more common stock in XYZWidgets.com. D) Continue to evaluate his investment in XYZWidgets.com after the purchase. E) Any of these would reduce his business failure risk. 31) 31) If your primary investment objective is to receive investment income, which of the following would NOT be an appropriate investment for you? A) Preferred stock B) Corporate bond C) Aggressive "Growth" funds D) Municipal bond E) Utility stock 32) 32) Which of the following describes a growth company? A) The company has managers who cannot solve the problems associated with rapid expansion. B) Sales revenues are not increasing. The company pays a large dividend. D) The company is considered a conservative company for investors. E) Profits are reinvested in the company for future growth. 44) Generally, interest on corporate bonds is normally paid every A) Month B) Year. C) Three months. D) Six months. E) Nine months. 45) Interest paid to corporate bond owners is A) Tax-deductible for both the investor and the corporation. B) Tax-deductible for the investor. C) Tax-exempt for the corporation. D) Tax-exempt for the investor. E) Tax-deductible for the corporation. 46) 46) A bond that can be exchanged, at the owner's option for a specified number of shares of the corporation's stock is called a(n) _ _bond. A) convertible B) debenture C) mortgage D) subordinated E) indenture 47) A call feature A) Allows bondholders to convert their bonds to a specified number of shares of common stock. B) Is used in connection with leveraged buyouts. C) Allows the corporation to buy outstanding bonds from current bondholders before the maturity date. D) Is sold by companies with a poor earnings history. E) Is not available for corporate bonds. 48) Which of the following is not a rating agency for bonds? A) Standard & Poor's Corporation B) Mergent C) Bond Rating Corporation D) Fitch Ratings E) Moody's Investors Service 49) Why do investors purchase corporate bonds? A) Interest income B) Possible increase in value C) Repayment at maturity D) All of the above. E) None of the above