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2.On January 1, The Long Island Crystal Company (LICC) issues 500,000 shares at $27.15 per share. (Issued means they are actually purchased, not simply offered

2.On January 1, The Long Island Crystal Company (LICC) issues 500,000 shares at $27.15 per share. (Issued means they are actually purchased, not simply offered for purchase.) Within the same tax year ABLE, an officer of the company who received 10,000 shares in compensation for past services at the initial public offering, sells 5000 shares to BAKER at $30.50. If LICC, as a corporation, is in the 35 percent tax bracket, what is the cumulative increase in the LICC company tax due as a result of the ABLE-BAKER transactions?

$16750.00

$2512.50

$22,875.00 $0.00

Not enough information to tell.

3. The Bank of Canada has determined that the economy has a higher velocity than is desirable. What facts might have led the central bankers to that conclusion? (May select more than one.)

A. Declining prices

B. Rising prices

C. High unemployment

D. Low unemployment

4. How does the Bank of Canada increase the money supply?

Repurchase Agreements (Repos)

Reserve Ratio

Discount Window Rate

Interest on Reserves Deposited

Purchases and Sales of Securities

5. All participants in the financial markets must register with the Securities and Exchange Commission (US) or Canadian Securities Administrators (Canada) and renew that registration annually.

True

False

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