Question : 21) Treasury bonds ________ issued by the federal government when : 1381361

 

21) Treasury bonds are ________ issued by the federal government when it borrows money.

A) promissory notes

B) certificates of deposit

C) private stocks

D) derivative securities

22) A corporate bond is a ________ issued by a corporation when it borrows money.

A) promissory note

B) certificate of deposit

C) private stock

D) derivative security

 

23) Corporate profits distributed among shareholders are called

A) retained earnings.

B) private bonds.

C) dividends.

D) Treasury bills.

 

24) Which of the following is NOT a correct statement?

A) Companies can issue shares and issue bonds.

B) The government issues bonds but does not issue shares.

C) Bondholders earn dividends but shareholders don’t.

D) Shareholders earn dividends but bondholders don’t.

 

25) An increase in the value of an asset over the price initially paid for it is a

A) price floor.

B) budget surplus.

C) capital gain.

D) neutral profit.

26) ________ in the value of an asset over the price initially paid for it is a capital gain.

A) An increase

B) A decrease

C) No change

D) The depreciation

 

27) If Teresa purchases a share of stock for $15 and three years later sells it for $60, she will realize a

A) dividend of $45.

B) dividend of $60.

C) capital gain of $45.

D) capital gain of $60.

 

28) If Raoul purchases a share of stock for $40 and four years later sells it for $160, he will realize a

A) dividend of $120.

B) dividend of $200.

C) capital gain of $120.

D) capital gain of $160.

 

29) Eddie purchased an autographed Kobe Bryant basketball when he was 17 years old for a total cost of $200 and then sold the basketball 4 years later for $700. Due to these transactions

A) Eddie earned a capital gain of $500.

B) Eddie earned a capital gain of $700.

C) Eddie earned a dividend of $500.

D) Eddie earned a dividend of $900.

30) Javier purchased a 1972 Dodge Charger in 2011 for $17,000 and a year later he sold it for $21,000. Due to these transactions

A) Javier earned a capital gain of $4,000.

B) Javier earned a capital gain of $21,000.

C) Javier earned a dividend of $17,000.

D) Javier earned a dividend of $21,000.

 

31) Celine purchased 5000 shares of stock for $500,000. A year later the stock is valued at $650,000. Instead of selling the stock, Celine held onto it for another year. Which of the following is true?

A) The $150,000 increase in the value of the stock represents a dividend.

B) The $150,000 increase in the value of the stock represents an unrealized capital gain.

C) To determine the capital gain, it is first necessary to know the normal rate of return on capital.

D) The total capital gain will be at least $150,000.

 

32) The portion of a corporation’s profits that the firm pays out each period to its shareholders is a

A) retained earning.

B) stock option.

C) capital gain.

D) dividend.

 

33) The portion of a corporation’s ________ that a firm pays out each period to ________ is a capital gain.

A) revenues; the government

B) profits; its board of directors

C) profits; its shareholders

D) taxes; the government

 

 

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