Which of the following demonstrates that the managers of a firm are working towards achieving the goal of financial management?

Multiple Choice

• increase in the net working capital

• increase in the number of shares outstanding

• none of the options does

• increase in fixed assets

• increase in long-term debt

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As Rudy is holding a _________________ issued by Johnson Shipping, Inc., he will not receive any coupon payment on the bond over its life.

Multiple Choice

• floating-rate bond

• callable bond

• debenture

• zero coupon bond

• junk bond

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Which of the following statements related to interest rates is/are correct?

I. When comparing loans, you should compare effective annual rate.

II. Annual and effective interest rates are equal when interest is compounded annually.

III. Annual percentage rates consider the effect of interest earned on reinvested interest payments.

IV. Lenders are not required by law to disclose the effective annual rate of a loan to prospective borrowers.

Multiple Choice

• I, II, and IV only

• II, III, and IV only

• I only

• III only

• I and II only