One of the basic rights of common stockholders is the right to control. This means that stockholders must be consulted on all decisions that the firm makes before the board of directors or management can make a decision.

True

False

Question 52

Choose the correct statement regarding ETFs. (This is a multiple answer format question which means you should check all that apply...there may be more than one correct response).

The maximum contribution to an ETF is $5000 per person per year

ETFs refer to a tax-sheltered retirement plan

An ETF is a security that is structured like a mutual fund (each share represents a portfolio of securities), but trades like a stock (bought sold through a brokerage account on stock exchanges)

Question 53

You want to accumulate $195153. You currently have $12470 saved. How much must you add at the end of each week for the next 11 years in order to reach your goal if you earn 8.56%?

Question 54

All else equal, we would expect the stock price to increase when ___. (This is a multiple answer format question which means you should check all that apply...there may be more than one correct response).

The required return decreases

The riskiness of the stock decreases

The expected growth rate increases

Question 55

All else equal, an increase in the riskiness of a firm will cause the cost of capital to rise.

True

False

Question 56

You plan to retire in 5 years. At the point of retirement, you want to be able to withdraw $100,000 and then withdraw $80,000 at the end of each year forever. Assume that you earn a 7% rate of return and do not want to make any further contributions to your retirement fund, how much do you need today?

There is not enough information to answer this question

$886,139.96

$1,142,857.14

None of these answers are correct

$871,880.24

Question 57

A bond indenture refers to a bond with a AA bond rating are higher.

True

False

Question 58

Which of the following is likely to lead to a weaker US dollar (all else equal)? (This is a multiple answer format question which means you should check all that apply...there may be more than one correct response).

Interest rates in the US go up relative to global interest rates

Interest rates in the US go down relative to global interest rates

US imports increase relative to US exports

Question 59

You are offered the opportunity to purchase a 7% coupon bond with 12 years remaining until maturity for $1105.26. Based on this, the Yield-to-Maturity for this bond is

7.52%

4.95%

5.77%

There is no solution

14.31%

Question 60

Stock A has an expected return of 8.4% and a standard deviation of 51.33%. Stock B has an expected return of 10.1% and a standard deviation of 40.11%. Assuming all investors must choose between these two stocks, we would expect Stock A to decrease in value and Stock B to increase in value until the expected return for Stock A rises above the expected return of Stock B.

True

False

Question 61

When comparing two individual investments to be held as stand-alone investments (not as part of a well diversified portfolio), standard deviation is a better risk measurement than beta.

True

False