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It is common when a firm has temporary excess cash that the financial manager most likely will ________. a. invest in the stock market b.

  1. It is common when a firm has temporary excess cash that the financial manager most likely will ________.

a.

invest in the stock market

b.

invest in marketable securities

c.

pay a large dividend to shareholders

d.

make an additional loan payment

  1. Which of the following investments would be considered closest to cash?

a.

Treasury bill

b.

Shares of common stock

c.

Bond issued by a small city

d.

Farmland

  1. Certificates of deposit are issued by ________.

a.

commercial banks, savings banks, and credit unions

b.

the U.S. government

c.

major corporations

d.

insurance companies

  1. Leverage ________ the return to shareholders and ________ the risk of their investment.

a.

lowers; lowers

b.

lowers; increases

c.

increases; lowers

d.

increases; increases

  1. In the U.S. financial system, which of the following is a net saver?

a.

The government

b.

Business

c.

Households

d.

Financial institutions

  1. The process used by an insurance company to determine whom to insure and how much to charge is called ________.

a.

a premium

b.

a insuring agreement

c.

underwriting

d.

indemnity

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