Q1. Say whether the following statements are True (T) or False (F) (10 marks)

( ) 1. In competitive bid distribution method several investment bankers involved

( ) 2. A corporate treasurer is typically responsible for data processing

( ) 3.Shareholder wealth minimization would imply minimizing the price of common stock.

( ) 4. Systematic risk cant be reduced.

( ) 5. Bonds are Long-term liabilities on the issuer

( ) 6. Improper diversification allows corporation to reduce risk

( ) 7. The sole proprietorship and the limited partnership both feature unlimited liability

( ) 8. Managers always won't work for the owners unless it's in their best interest.

( ) 9. Profit maximization is not a main goal of the firm, shareholders' wealth minimization is.

( ) 10. External funding will decrease during a recession

( ) 11. Financial markets exist in order to mobilize funds from savers to users of those funds.

( ) 12. OTC is Over-the-Counter virtual electronic exchange.

( ) 13. The true owners of the corporation are the preferred stock holders

( ) 14. Well-developed financial markets contribute to the overall growth of the economy

( ) 15. Treasury stocks are stocks that once outstanding and have been re-purchased by the company

( ) 16. Financial ratios analysis can be comparable, absolute figures cant.

( ) 17. Borrowing more money increases a company's return on equity in booming economies

( ) 18. Rational investor may prefer an investment with higher standard deviation of returns

( ) 19. An investor with a required return of 80% for stock X will purchase stock X if the expected return for stock X is more than or equal to 8%.

( ) 20. Historically, investments with the highest returns have the lowest standard deviations