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Chapter 8 Financing a Business Flashcards | StudBud

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Financial institutions

The Securities and Exchange Commission is

Chapter 8 Financing a Business

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Questions 12

Answers

1
The Securities and Exchange Commission is
a federal government agency
a federal government program
a stock market
a theme park
2
Financial institutions
accept savings from businesses
pay interest on savings
accept savings from individuals
all of the above
3
Businesses do not allocate their profits to
employees
dividends
retained earnings
4
Assets = liabilities + net worth
True
False
5
A line of credit is
all of the above
an agreement to borrow money
an agreement with a bank
an agreement to borrow up to a certain amount of money
6
Which of the following does not describe market behavior?
Buffalo Market
Bull Market
Bear Market
7
An initial public offering (IPO) is
the sale of bonds to the public
an offer to buy back stock
always a risky deal
the first sale of stock to the public
8
Which of the following is a stock market?
New York Stock Exchange
Junior Achievement
Chicago Board of Trade
The Denver Consumer Barn
9
A business is most likely to use short-term loans to
buy new equipment
build new buildings
meet payroll and other expenses
finance research and development
10
Investing in a market with risk is called
stupidity
bad luck
market risk
good fortune
11
The following are examples of financial institutions
department stores
commercial banks
hamburger franchises
barber shops
12
If you own a corporate bond, you
are an investment banker
are one of the company's many owners
are a creditor of the corporation
benefit only if the company earns a profit