1. The stock price of a company increases and the market is deemed efficient. What assumption can be made?

A. A new, patented, product was introduced to the market.

B. New machinery was purchased with a useful life of 20 years.

C. Management is optimizing itsresources and operating efficiently.

D. Management hired new employees and invested in a training program.

2. Which statement is true about how the global market affectsthe U.S.

A. A bad options trade executed by a foreign subsidiary of a Wall Street bank will affectlayoffs overseas.

B. A Bad derivativestrade executed by a foreign subsidiary of a Wall Street bank will affectlayoffs overseas.

C. American investors and fund managers make decisions based on financial reporting standards developed and

financial statements audited overseas.

D. Foreign investors and fund managers make decisions based on financial reporting standards developed and

financial statements audited overseas.

3. What are secondary markets?

A. Markets where securities are traded subsequent to the initial offering.

B. Markets were securities are issued for the first time.

C. Markets were securities are issued through a competitive sale.

D. Markets where securities are issued through a negotiated sale.

4. A special interest group in the U.S. has been lobbying intensely for protectionism through increased tariffs and

trade restrictions, with the argument that it will save jobs in the industry they represent. What is the most likely

result if they are successful?

A. Employees and shareholders of the domestic industry that produce the protective goods will be hurt and the

nation will benefit.

B. The overall economy will benefit from trade restrictions and tariffs.

C. Removing the trade restrictions and tariffs will resultin a net economic loss to the overall U.S. economy.

D. Employees and shareholders of the domestic industry that produce the protected goods will benefit and the

nation will be hurt.

5. What do the content and structure of a balance sheet report?

The assets , liabilities , and equity at a point in time

6. What is the basis used to compute a company's income tax expense?

A. Pretax accounting income.

B. Taxable income.

C. Net operating income.

D. Taxes payable.

7. What is the firm’s cash flow from financing, using the data above?

Net Income $1000

Depreciation Expense $300

Change in operating assets $600

Change in net PP&E $5000

Change in long-term Liabilities $1000