Question 1 (1 point)

Which of the following is an internal source of funds?

Question 1 options:

	Cash flow from depreciation (tax shield)
	Net loss
	Repurchase of debt securities
	Bank loan

Question 2 (1 point)

The Securities Act of 1933 is primarily concerned with

Question 2 options:

	original issues of securities.
	secondary trading of securities.
	the national securities markets.
	protecting customers of bankrupt securities firms.

Question 3 (1 point)

The Sarbanes-Oxley Act of 2002 holds the CEO and CFO legally accountable for the accuracy of their firm's financial statements.

Question 3 options:

	True
	False

Question 4 (1 point)

The Securities Exchange Act of 1934 is primarily concerned with

Question 4 options:

	a central market system.
	regulation of organized exchanges.
	protecting customers of bankrupt securities firms.
	original issues of securities.

Question 5 (1 point)

Which of the following is not a money market instrument?

Question 5 options:

	Treasury bills
	Commercial paper
	Negotiable certificates of deposit
	Treasury bonds

Question 6 (1 point)

The purpose of secondary trading is to

Question 6 options:

	provide liquidity and competition between investments.
	provide a market to issue securities not handled in primary trading.
	provide jobs for brokers and dealers.
	provide lower commissions than on the organized exchanges.

Question 7 (1 point)

A conversion feature allows

Question 7 options:

	the bondholder to redeem the bond before the maturity date.
	the corporation to redeem the bond before the maturity date.
	the bondholder to convert the bond to common stock.
	the bondholder to demand increased collateral.

Question 8 (1 point)

Which of the following is not a financial advantage to companies using debt?

Question 8 options:

	Debt is paid back in "cheaper" dollars during inflationary periods.
	Bond holders have no control over the actions of management.
	The cost of debt can lower the weighted overall cost of capital.
	Interest payments are tax deductible.

Question 9 (1 point)

The higher the bond rating,

Question 9 options:

	the higher the interest rate on a bond.
	the lower the interest rate on a bond.
	the higher the call premium.
	the lower the call premium.

Question 10 (1 point)

The underwriting cost on a new bond issue

Question 10 options:

	is an immediate outflow and immediate tax write-off.
	is an immediate tax write-off with a deferred outflow.
	is a deferred outflow and deferred tax write-off.
	is an immediate outflow and deferred tax write-off.