Question

30. The Dow Jones Industrial Average is: A. the most representative of the stock market indexes B. an index of 500 largest corporate stocks in America. C. an index of 30 major industrial stocks. D. an equally weighted index of al stocks traded on the New York Stock Exchange. III. Applications (50 points, 10 points each) 1. Fritz and Frieda went to business school together 10 years ago. They have just been hired by a midsized corporation that wants to bring in new financial managers. Fritz studied finance, with an emphasis on financial markets and institutions. Frieda majored in accounting and became a CPA 5 years ago. Who is more suited to be treasurer and who controller? Briefly explain. 2. Discuss the statement, "Money has a time value."

Answer 1

30.Answer is C.an index of 30 major industrial stocks

Because, Dow jones industrial average is included in the list of best known indexes in the united states.it is also known as PRICE WEIGHTED AVERAGE index.It is following the stock movements of 30 of high influencial companies in america.

III.Applications

1.Answer

Fritz is more suitable to the TREASURER and Frieda be the CONTROLLER.

Treasurer raises money from financial markets and he requires a background in financial institutions.

while Controller requires a background in Accounting

2.Answer

MONEY HAS A TIME VALUE

Lets start a discussion on time value of money by taking a very simple example,You keep the money in bank and inturn earns some interest.Therefore time gap allowed helps us to make some money.THAT INCREMENTAL GAIN IS TIME VALUE OF MONEY.

now letme ask a question,if the bank interest was zero (which is generally not the case),what would be the time value of money?As you correctly guessed it would be zero.

As we understand above,the interest plays an important role in determining the Time value of money.So,MONEY HAS TIME VALUE.