1、1-1 Copyright 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Chapter 01 The Investment Environment Multiple Choice Questions 1. The material wealth of a society is a function of A. all financial assets. B.
2、all real assets. C. all financial and real assets. D. all physical assets. 2. _ are real assets. A. Land B. Machines C. Stocks and bonds D. Knowledge E. Land, machines, and knowledge 1-2 Copyright 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior writ
3、ten consent of McGraw-Hill Education. 3. The means by which individuals hold their claims on real assets in a well-developed economy are A. investment assets. B. depository assets. C. derivative assets. D. financial assets. E. exchange-driven assets. 4. _ are financial assets. A. Bonds B. Machines C
4、. Stocks D. Bonds and stocks E. Bonds, machines, and stocks 5. _ financial asset(s). A. Buildings are B. Land is a C. Derivatives are D. U.S. agency bonds are E. Derivatives and U.S. agency bonds are 1-3 Copyright 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution witho
5、ut the prior written consent of McGraw-Hill Education. 6. Financial assets A. directly contribute to the countrys productive capacity. B. indirectly contribute to the countrys productive capacity. C. contribute to the countrys productive capacity both directly and indirectly. D. do not contribute to
6、 the countrys productive capacity either directly or indirectly. E. are of no value to anyone. 7. In 2012, _ was the most significant real asset of U.S. households in terms of total value. A. consumer durables B. automobiles C. real estate D. mutual fund shares E. bank loans 8. In 2012, _ was the le
7、ast significant financial asset of U.S. households in terms of total value. A. real estate B. mutual fund shares C. debt securities D. life insurance reserves E. pension reserves 1-4 Copyright 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written
8、consent of McGraw-Hill Education. 9. In 2012, _ was the most significant financial asset of U.S. households in terms of total value. A. real estate B. mutual fund shares C. debt securities D. life insurance reserves E. pension reserves 10. In 2012, _ was the most significant asset of U.S. households
9、 in terms of total value. A. real estate B. mutual fund shares C. debt securities D. life insurance reserves E. pension reserves 11. In 2012, _ was the most significant liability of U.S. households in terms of total value. A. credit cards B. mortgages C. bank loans D. student loans E. other debt 1-5
10、 Copyright 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 12. Which of the following financial assets made up the greatest proportion of the financial assets held by U.S. households? A. Pension reserves B.
11、Life insurance reserves C. Mutual fund shares D. Debt securities E. Personal trusts 13. In 2012 _ of the assets of U.S. households were financial assets as opposed to tangible assets. A. 20.4% B. 34.2% C. 68.8% D. 71.7% E. 82.5% 14. The largest component of domestic net worth in 2012 was A. nonresid
12、ential real estate. B. residential real estate. C. inventories. D. consumer durables. E. equipment and software. 1-6 Copyright 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 15. The smallest component of do
13、mestic net worth in 2012 was A. nonresidential real estate. B. residential real estate. C. inventories. D. consumer durables. E. equipment and software. 16. The national net worth of the U.S. in 2012 was A. $15.411 trillion. B. $26.431 trillion. C. $42.669 trillion. D. $48.616 trillion. E. $70.983 t
14、rillion. 17. A fixed-income security pays A. a fixed level of income for the life of the owner. B. a fixed stream of income or a stream of income that is determined according to a specified formula for the life of the security. C. a variable level of income for owners on a fixed income. D. a fixed o
15、r variable income stream at the option of the owner. 1-7 Copyright 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 18. A debt security pays A. a fixed level of income for the life of the owner. B. a variable
16、 level of income for owners on a fixed income. C. a fixed or variable income stream at the option of the owner. D. a fixed stream of income or a stream of income that is determined according to a specified formula for the life of the security. 19. Money market securities A. are short term. B. are hi
17、ghly marketable. C. are generally very low risk. D. are highly marketable and are generally very low risk. E. All of the options 20. An example of a derivative security is A. a common share of Microsoft. B. a call option on Intel stock. C. a commodity futures contract. D. a call option on Intel stoc
18、k and a commodity futures contract. E. a common share of Microsoft and a call option on Intel stock. 1-8 Copyright 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 21. The value of a derivative security A. de
19、pends on the value of the related security. B. is unable to be calculated. C. is unrelated to the value of the related security. D. has been enhanced due to the recent misuse and negative publicity regarding these instruments. E. is worthless today. 22. Although derivatives can be used as speculativ
20、e instruments, businesses most often use them to A. attract customers. B. appease stockholders. C. offset debt. D. hedge risks. E. enhance their balance sheets. 23. Financial assets permit all of the following except A. consumption timing. B. allocation of risk. C. separation of ownership and contro
21、l. D. elimination of risk. 1-9 Copyright 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 24. The _ refers to the potential conflict between management and shareholders. A. agency problem B. diversification p
22、roblem C. liquidity problem D. solvency problem E. regulatory problem 25. A disadvantage of using stock options to compensate managers is that A. it encourages managers to undertake projects that will increase stock price. B. it encourages managers to engage in empire building. C. it can create an i
23、ncentive for managers to manipulate information to prop up a stock price temporarily, giving them a chance to cash out before the price returns to a level reflective of the firms true prospects. D. All of the options 1-10 Copyright 2014 McGraw-Hill Education. All rights reserved. No reproduction or
24、distribution without the prior written consent of McGraw-Hill Education. 26. Which of the following are mechanisms that have evolved to mitigate potential agency problems? I) Using the firms stock options for compensation II) Hiring bickering family members as corporate spies III) Boards of director
25、s forcing out underperforming management IV) Security analysts monitoring the firm closely V) Takeover threats A. II and V B. I, III, and IV C. I, III, IV, and V D. III, IV, and V E. I, III, and V 27. Corporate shareholders are best protected from incompetent management decisions by A. the ability to engage in proxy fights. B. managements control of pecuniary rewards. C. the ability to call shareholder meetings. D. the threat of takeover by other firms. E. one-share/one-vote election rules.
