Multiple Choice 1. Which of the following is true about stocks? A.) Stocks are a promissory note issued by a company B.) Stocks have limited liability and a residual claim on company assets and income C.) Stocks have a maturity date for full payment D.) Stocks are less risky than bonds E.) None of the above 2. Which of the following is(are) true when you short a stock? A.) You eventually have to cover your position by buying the stock back B.) You are not responsible for any dividends paid by the stock during the time you are short C.) The amount of money you borrowed to short stays constant during your holding period D.) A and B E.) A and C F) A, B, and C G.) None of the above 3. Which of the following would typically result in an update to a market-cap weighted index divisor? A.) A company listed in the index offers a dividend of 5% per share B.) A company listed in the index falls below $5 per share in price C.) A company listed in the index splits its stock 4-1 D.) All of the above E.) None of the above