Window Help FN301 Spring 2018 Self Study Questions 1.pdf (page 2 of 5) SECTION A-MULTIPLE CHOICE QUESTIONS 1.Financial assets A B) C) D) E) directly contribute to the country's productive capacity indirectly contribute to the country's productive capacity contribute to the country's productive capacity both directly and indirectly do not contribute to the country's productive capacity either directly or indirectly are of no value to anyone Which of the following are characteristics of preferred stock? I) It pays its holder a fixed amount of income each year, at the discretion of its managers II) It gives its holder voting power in the firm. IlI) Its dividends are usually cumulative. IV) Failure to pay dividends may result in bankruptcy proceedings. 2. A) I, 111, and rv B) I, II, and IlI C) I and II D) I, II, and IV E) I, II, III, and IV Which of the following statements is (are) true? 1) Risk-averse investors reject investments that are fair games. l) Risk-neutral investors judge risky investments only by the expected returns II) Risk-averse investors judge investments only by their riskiness. N) 'Risk-loving investors will not engage in fair games. 3. A) I only B) Il only C) I and Il only D) Il and Ill only E) u, IIl and IV only