A (American) call option gives the owner of the option the __________ to ______________ a specified number of shares of stock _____, at a specified price.

a. obligation; sell; for a particular period of time right;

b. sell; on a specified future date obligation; c.

buy; for a particular period of time right;

d.buy; on a specified future date right;

e. buy; for a particular period of time

QUESTION 10

Which of the following is NOT generally considered an advantage of transitioning a firm from a private business to a public corporation, despite the time and expense required to do so?

		a. the original founders of the firm can use some funds raised in the IPO to diversify their own investments
	b.	it establishes a firm market value for the firm, since the going price per share is now public information
	c.	it reduces the firm's cost of raising additional capital in the future, because the the stock will be more liquid
		d. it reduces the firm's cost of raising additional capital in the future because everyone knows how much of their OWN money the founders are investing in the firm (how much "skin in the game" they have)
		e. all of the above are advantages of going public

QUESTION 11

An increase in depreciation expense will ______________ a firm's net income and ___________ the firm's (net) cash flow. Assume that both NI and (net) cash flow both start and finish above $0.00.

		a. decrease, decrease
		b. decrease, increase
	c.	increase, decrease
d.		increase, increase