MULTIPLE CHOICE (18%) Circle correct answer: The net profit margin 1. is usually less than the operating profit margin 2. exceeds the operating profit margin 3. is not affected by taxes paid by the firm 4. is reduced by interest earned 1. 2. Which of the following is not part of the underwn process? 1. the syndicate 2. the originating house 3. the prospectus 4. the secondary market If a bank is fully "loaned" up, 1. it has excess reserves 3. 2. it has the maximum allowed number of deposits 3. it has no excess reserves 4. it has no required reserves 4. Which of the following is a cash inflow? 1. an increase in accounts receivable 2. a decrease in inventory 3. distributing cash dividends 4. a decrease in long-term debt Buying stock on margin 1. is an example of financial leverage 2. is buying stock with borrowed funds 3. requires leaving the stock with the broker 5. a. 1 and 2 b. 1 and 3 c. 2 and 3 d. all three 6. The primary purpose of the Federal Reserve is to 1. finance government operations 2. protect investors from bank failures 3. protect depositors from bank failures 4. control the supply of money and credit