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Exam 19: Using Securities Markets for Financing and Investing Opportunities

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Question 41

True/False

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While common stockholders of corporations have voting rights, preferred stockholders generally do not.

A) True
B) False

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Question 42

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Mutual fund investors will note that:

A) Fund managers have not yet added foreign securities into their funds.
B) Mutual funds cannot be purchased through a traditional brokerage house.
C) Loads can vary from one mutual fund to another. The fund manager dictates the commissions and fees.
D) By law, mutual funds can no longer charge loads.

E) A) and B)
F) A) and C)

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Question 43

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Before issuing stock or bonds, corporations must meet the disclosure requirements of the Federal Trade Commission (FTC).

According to the Spotlight on Small Business box, which of the following is NOT a way the SEC changes altered securities laws following the JOBS Act?

If a publicly traded corporation fails to maintain specific minimum requirements, the exchange can ________ the firm's securities.

The term ________ refers to investors who anticipate increases in stock prices.

Growth stocks are the stocks of corporations whose earnings are expected to grow faster than the overall economy.

The U.S. government just announced an increase in the interest rate paid on U.S. government bonds. This will likely cause a decrease in the interest rates paid on corporate bonds.

The ________ is a large national electronic stock trading market.

Zach purchased 200 shares of Fast Track Corporation last year. This year, he plans to hire an attorney to go after the company for failure to pay dividends. If Zach follows through with his plan, he will probably win the lawsuit because companies are obligated to pay their stockholders dividends for owning and holding the firm's stock.

An unsecured bond, backed only by the well-respected name of the organization, is called a________ bond.

Stock market "circuit breakers" stop stock trading for a short time when the stock market experiences a significant drop in stock values.

Brokers prefer trading shares of a firm's stock in multiples of 100, known as:

Idle Time Gaming announced a 2-for-1 common stock split for investors on record. Which of the following will occur?

__________ are collections of stocks that are traded on exchanges but are traded more like individual stocks than like mutual funds.

Which of the following measures how quickly an investor has access to his/her invested funds, if they are needed?

Maureen owns 20% of the common stock of the Queen Bean Corporation. The company announced plans to offer an additional 10,000 shares of common stock for sale. If Maureen exercises her preemptive rights, Queen Bean must offer her the opportunity to purchase:

Most businesses prefer to meet their long-term financial needs through:

The maturity date of a bond refers to the date on which the interest payment is due to be paid.

Although companies that issue bonds are required to pay interest, companies issuing stock are not required to pay dividends.