Solved by verified expert :43. A(n) ____ is a bond that pays no annual interest but is
sold at a discount below par, thus providing compensation to investors in the
form of capital appreciation.
a.
coupon bond
b.
income bond
c.
convertible bond
d.
zero coupon bond
e.
callable bond
44. A protective feature on preferred stock that requires
preferred dividends previously not paid to be disbursed before any common
stock dividends can be paid is called what?
a.
cumulative dividends
b.
callable dividends
c.
putable dividends
d.
historical dividends
e.
paid dividends
45. Preferred stockholders generally are given the right to
vote for directors if
a.
the preferred stock
is participating preferred stock.
b.
the directors are
elected under the cumulative method.
c.
the common
stockholders do not vote in new directors with a clear majority.
d.
the company cannot
pay its interest payments.
e.
the company has not
paid the preferred dividend for a specified period.
46. A ____ is a financial instrument which gives the owner
the right but not the obligation to sell shares of stock at a specified price
during a particular time period.
a.
convertible security
b.
call option
c.
warrant
d.
put option
e.
callable security
47. A French firm is buying $1,000,000 of optical cable
from a firm in the United States. The French firm will pay for the cable in
thirty days. To protect itself from changes in the exchange rate between the
Euro and dollar, the French firm enters into a futures contract to purchase
$1,000,000 at a price of $1.25/€. How many Euros will it cost the French firm
to purchase $1,000,000 using the futures contract?
a.
€125,000,000
b.
€2,500,000
c.
€1,250,000
d.
€1,000,000
e.
€800,000
48. Which of the following is NOT an example of a
financial asset?
a.
convertible bond
b.
certificate of
deposit
c.
preferred stock
d.
inventory
e.
mutual fund
49. Corporations issue and purchase a variety of financial
securities for all of the following reasons EXCEPT
a.
raise capital
b.
hedge against risk
c.
alter the capital
structure of the firm
d.
all of the above are
reasons to issue or purchase financial securities
