The financial pages of the local newspaper helped Mary in identifying that she can buy a bond ($1,000 par) for $800. If the coupon rate is 10 percent, the annual interest payments equal $80

a true

b false

Assuming everything else equal, one of the concepts to consider to make sound financial decisions is that _____.

a the riskier assets always have lower market value

b the riskier assets are more valuable than (preferred to) less risky assets

c the sooner cash is received, the more valuable it is

d investors always achieve higher returns from less risky assets

Dwayne invests $4,700 in a savings account at the beginning of each of the next twelve years. If his opportunity cost rate is 7 percent compounded annually, how much will his investment be worth after the last annuity payment is made?

a $89,817.00

b $95,157.85

c $91,250.52

d $87,542.29

When the payment for an annuity is made at the end of each period, such an annuity is referred to as a(n) _____.

a ordinary annuity

b deferred annuity

c discounted annuity

d annuity due

The balance sheet is a financial statement measuring the flow of funds into and out of various accounts over time while the income statement measures the progress of the firm at a point in time.

true

false

Which of the following mathematical expressions computes earnings per share?

a Earnings per share = Net Income Number of outstanding shares of common stock

b Earnings per share = (Net Income + Dividend Paid) Number of outstanding shares of common stock

c Earnings per share = Net Income Number of outstanding shares of common stock

Primary markets are markets _____.

a where loans are traded

b where financial assets that have previously been issued by various organizations are traded among investors

c in which various organizations raise funds by issuing new securities

d where the instruments traded have original maturities equal to one year or less