Question :
21) Promissory notes issued by the federal government when it : 1381070
21) Promissory notes issued by the federal government when it borrows money are known as
A) Treasury shares.
B) Treasury stocks.
C) Treasury bonds.
D) none of the above
22) A promissory note issued by a corporation when it borrows money is a
A) share.
B) corporate bond.
C) corporate dividend.
D) stock.
23) Dividends are
A) government profits distributed among bondholders.
B) corporate profits distributed among shareholders.
C) capital gains realized by stockholders.
D) promissory notes issued by corporations.
24) Which of the following is a CORRECT statement?
A) Companies issue shares but don’t issue bonds.
B) The government issues both bonds and shares.
C) Bondholders earn dividends but shareholders don’t.
D) Shareholders earn dividends but bondholders don’t.
25) A capital gain is
A) a financial instrument that gives the holder a share in the ownership of a firm and therefore the right to share in the profits of the firm.
B) the portion of a corporation’s profits that the firm pays out each period to its shareholders.
C) an increase in the value of an asset over the price initially paid for it.
D) the difference between an individual’s economic income and money income.
26) An increase in the value of an asset over the price initially paid for it is a
A) dividend.
B) share of stock.
C) promissory note.
D) capital gain.
27) If Tomas purchases a share of stock for $150 and one year later sells it for $225, he will realize a
A) dividend of $75.
B) capital gain of $75.
C) dividend of $225.
D) a capital gain of $225.
28) If Juanita purchases a share of stock for $20 and three years later sells it for $120, she will realize a
A) dividend of $100.
B) capital gain of $100.
C) dividend of $120.
D) capital gain of $140.
29) Wayne purchased 10 autographed Eli Manning football cards when he was 15 years old for a total cost of $50 and then sold those football cards 4 years later for $800. Due to these transactions
A) Wayne earned a capital gain of $800.
B) Wayne earned a capital gain of $750.
C) Wayne earned a dividend of $800.
D) Wayne earned a dividend of $750.
30) Mike purchased a 1968 Chevy Corvette in 2009 for $30,000 and a year later he sold it for $36,000. Due to these transactions
A) Mike earned a capital loss of $6,000.
B) Mike earned a dividend of $36,000.
C) Mike earned a dividend of $600.
D) Mike earned a capital gain of $6,000.
31) Ami purchased 100 shares of stock for $10,000. A year later the stock is valued at $18,000. Instead of selling the stock, Ami held onto it for another year. Which of the following is TRUE?
A) The $8,000 increase in the value of the stock represents an unrealized capital gain.
B) The $8,000 increase in the value of the stock represents a dividend.
C) To determine the capital gain, it is first necessary to know the normal rate of return on capital.
D) none of the above
32) A dividend is
A) a promissory note issued by corporations when they borrow money.
B) an increase in the value of an asset over the purchase price initially paid for it.
C) the difference between the interest rate a bank pays on deposits and the interest rate it charges for loans.
D) the portion of a corporation’s profits that the firm pays out each period to its shareholders.
33) The portion of a corporation’s profits that a firm pays out each period to its shareholders is a
A) dividend.
B) promissory note.
C) capital gain.
D) corporate bond.
