Question : 41. _____bonds permit the holder to exchange the bonds for shares : 1230316

Accounting

41. _____bonds permit the holder to exchange the bonds for shares of the firm’s common stock under certain conditions.
A. Derivative
B. Convertible
C. zero coupon
D. Serial
E. Debenture

42. The conversion option of convertible bonds has value because the holder can benefit from some of the later increases in the market value of the firm’s _____ after issuance of the bonds.
A. preferred stock
B. paid-in-capital
C. treasury stock
D. common stock
E. debentures

43. What determines the risk of investing in a bond issue, which in turn affects the interest rate investors demand and therefore the bond’s price.
A. industry economic characteristics
B. the financial health of a firm
C. particular provisions of a bond issue
D. all of the above
E. none of the above

44. Notes, bonds, leases and derivatives are _____.
A. present values of future cash flows
B. financial instruments
C. collateralized debt obligations
D. unsecured debt obligations
E. investment trusts

45. _____ of a note or bond at any date subsequent to the initial borrowing equals the present value of the future, or remaining, cash flows discounted at an appropriate interest rate.
A. The amount borrowed initially
B. The market value
C. The liquidation value
D. The net realizable value less selling costs
E. choices a and b

46. The amount borrowed initially and the market value of a note or bond at any date subsequent to the initial borrowing equals
A. the sum of the future cash flows.
B. the present value of the future, or remaining, cash flows discounted at an appropriate interest rate.
C. the future cash flows discounted at the initial market interest rate.
D. the future cash flows discounted at the subsequent market interest rate.
E. the future value of present cash flows discounted at an appropriate interest rate.

47. On the date of initial issuance of a financial instrument , the market value will equal
A. the initial issue proceeds [the amount borrowed].
B. the sum of the future cash flows.
C. the maturity value of the instrument.
D. the par value of the instrument.
E. the par value of the instrument minus the premium or plus a discount.

48. U.S. GAAP and IFRS permit firms to account for notes and bonds under which of the following approach(es):
A. Amortized Cost.
B. Fair Value.
C. Amortized Cost and Future Value.
D. Non-amortized cost and Fair Value.
E. Amortized Cost and Fair Value.

49. The approach which dominates current financial reporting of financial instruments [uses the historical market interest rate to compute the carrying value of notes and bonds while these obligations are outstanding] is the _____ approach.
A. amortized cost
B. un-amortized cost
C. imputed cost
D. future value
E. liquidation value

50. The FASB and the IASB refer to the approach that uses the current market interest rate instead of the historical market interest rate to discount the remaining cash flows from financial instruments as the
A. future value option.
B. current value option.
C. liquidation value option.
D. fair value option.
E. accurate value option.

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July 1, 2023

9.1 The United States in the International Economy

1) Following the tariff imposed on Chinese tires, some businesspeople correctly argued that the U.S. tariff would result in

A) China retaliating by raising tariffs on some U.S. exports.

B) China halting the sale of all products in the United States.

C) U.S. firms never being able to meet the demand for U.S.-produced tires.

D) the government demanding price cuts from U.S. tire manufacturers.

2) Workers in industries protected by tariffs and quotas are likely to support these trade restrictions because

A) they do not want to offend their employers who want them.

B) politicians lobby to convince workers the restrictions will make them better off.

C) they believe the restrictions will protect their jobs.

D) they don't understand that the restrictions will threaten their jobs.

3) The intention of the U.S. tariff on Chinese tires was to

A) protect jobs in the U. S. tire industry.

B) protect infant industries in tire U.S. tire market.

C) insure that Chinese tires meet U.S. quality and safety standards.

D) save the government money by restricting the sale of more expensive Chinese-made tires.

4) In the 1930s, the United States charged an average tariff rate ________. Today, the rate is ________.

A) of 100 percent; 20 percent

B) above 50 percent; less than 1.5 percent

C) of less than 10 percent; over 40 percent

D) of 17 percent; 33 percent

5) A tariff is a tax imposed by a government on

A) exports.

B) services.

C) imports.

D) luxury items.

6) Goods and services bought domestically but produced in other countries are referred to as

A) exports.

B) imports.

C) transfer payments.

D) foreign consumption.

7) Exports are domestically produced goods and services

A) sold to other countries.

B) sold to the government.

C) sold at home.

D) which are used to produce other goods and services.

8) When Roxanne, a U.S. citizen, purchases a designer dress from Barneys of New York that was made in Milan, the purchase is

A) both a U.S. and an Italian import.

B) a U.S. import and an Italian export.

C) a U.S. export and an Italian import.

D) neither an export nor an import for either country.

9) When BMW, a German company, purchases a welding machine that was made in Toronto, the purchase is

A) both a German and a Canadian import.

B) a German import and a Canadian export.

C) a German export and a Canadian import.

D) neither an export nor an import for either country.

10) Which of the following statements about the importance of trade to the U.S. economy is true?

A) Since 1950, both exports and imports have steadily decreased as a fraction of U.S. gross domestic product.

B) Overall, about 80 percent of U.S. manufacturing jobs depend directly or indirectly on exports.

C) The United States is the second largest exporter in the world.

D) The U.S. economy is highly dependent on international trade for growth in its gross domestic product.