Question 1

1pts

A decline in the interest rate will lead to an increase in the price of capital, supply of capital remaining constant.

Group of answer choices

True

False

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Question 2

1pts

The face value of a bond is:

Group of answer choices

the amount of the coupon that is paid at equal intervals.

the amount repaid to the lender on maturity.

the percentage of company profits that is paid to the borrower.

equivalent to the capital gain.

equivalent to economic profit.

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Question 3

1pts

Stocks that offer a guaranteed fixed periodic payment or dividend are known as:

Group of answer choices

common stock.

restricted stock.

close-ended stock.

preferred stock.

open-ended stock.

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Question 4

1pts

The demand curve for capital:

Group of answer choices

shows the positive relation between capital usage and the quantity of capital demanded.

shows the positive relation between aggregate output and the quantity of capital demanded.

shows the negative relation between rate of inflation and the quantity of capital demanded.

shows the positive relation between technological change and the quantity of capital demanded.

shows the negative relation between price of capital and the quantity of capital demanded.

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Question 5

1pts

If bonds and stocks are considered to be substitute goods, and the investors expect stock prices to drop in the near future, _____.

Group of answer choices

the price of bonds will also decline

the supply of bonds will increase

the interest rate on bonds will decline

the demand for stocks will increase

the demand for bonds will decline

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Question 6

1pts

The fixed amount that the issuer of a bond agrees to pay the bondholder each year until the bond matures is called:

Group of answer choices

rent.

coupon.

interest.

load.

dividend.

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Question 7

1pts

A group of stocks of individual firms that are placed into one investment pool by an investment company is commonly known as a:

Group of answer choices

pooled stock venue.

stock clump.

stock agreement.

mutual fund.

maximal diversified investment (MDI).

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Question 8

1pts

The financial capital of a firm includes the:

Group of answer choices

service provided by its accountants.

credit cards provided to its top executives.

equity and bonds issued by it.

loans accepted from banks.

computers purchased for its office staff.

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Question 9

1pts

When a price rise of an asset can be justified by fundamental concepts and past experiences, then such a price rise does not constitute a classic bubble.

Group of answer choices

True

False

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Question 10

1pts

If the earnings report of a firm indicates higher earnings than was expected by the investors:

Group of answer choices

the stock prices of the firm will decline.

the price of the product produced by this firm will decline.

the price of the product produced by this firm will rise.

the firm will spend more on advertising.

the stock prices of this firm will increase.