Financial Management - Study Mode
[#716] A price for equity is called
Correct Answer
(B) cost of equity
Explanation
Solution: A price for equity is called cost of equity. The cost of equity is the return a company requires to decide if an investment meets capital return requirements.
[#717] Risk in which value of investment depends on what happens to foreign exchange rates is classified as
Correct Answer
(B) exchange rate risk
Explanation
Solution: Risk in which value of investment depends on what happens to foreign exchange rates is classified as exchange rate risk. Exchange rate risk, also known as currency risk, is the financial risk arising from fluctuations in the value of a base currency against a foreign.
[#718] Members and employees of credit unions are loaned for
Correct Answer
(D) all of above
Explanation
Solution: Members and employees of credit unions are loaned for mortgages, home improvement loans and auto purchases.
[#719] Ability to trade at net price very quickly is classified as
Correct Answer
(B) liquidity
Explanation
Solution: Ability to trade at net price very quickly is classified as liquidity. Liquidity describes the degree to which an asset or security can be quickly bought or sold in the market at a price reflecting its intrinsic value. In other words: the ease of converting it to cash.
[#720] Bonds which are more risky than corporate bonds and are issued by major corporations are classified as
Correct Answer
(D) preferred stocks
Explanation
Solution: Bonds which are more risky than corporate bonds and are issued by major corporations are classified as preferred stocks. Preferred stockholders have a higher claim to dividends or asset distribution than common stockholders.