Question

T or F

17. STOCKS GENERALLY ARE MORE RISKY THAN BONDS. BONDS ARE DEBT INVESTMENTS.

18. REAL INTEREST RATE < NOMINAL INTEREST RATE.

19. ACCOUNTING PROFIT= NET INCOME= REVENUES- EXPENSES – TAXES

20. ECONOMIC PROFIT= NET INCOME= REVENUES – EXPLICIT COSTS – IMPLICIT COSTS.

21. POSITIVE CASH FLOW = INFLOW < OUTFLOW.

22. FIRMS RAISE MONEY BY USE OF STOCKS, BONDS, AND DIVIDENDS.

23. OWNERS EQUITY= REVENUE – DIVIDENDS + EXPENSES – OWNERS PAID IN CAP.

24. RISKS ARE INDIRECTLY RELATED TO REWARDS.

25. MOODY’S, S & P, FITCH, AND SC JOHNSON ARE RATINGS AGENCIES FOR BOND

INVESTMENTS.

Answer 1

QUESTION:17.

STOCKS GENERALLY ARE MORE RISKY THAN BONDS. BONDS ARE DEBT INVESTMENTS.

SOLUTION:

the given statement TRUE i.e.,

Stocks are not always riskier than bonds but generally it happens. Also some bonds have default risks and Bonds are debt investments.

18.  REAL INTEREST RATE < NOMINAL INTEREST RATE.

solution: true

19 .  ACCOUNTING PROFIT= NET INCOME= REVENUES- EXPENSES – TAXES

Solution: True

20 . ECONOMIC PROFIT= NET INCOME= REVENUES – EXPLICIT COSTS – IMPLICIT COSTS.

Solution: True

21. POSITIVE CASH FLOW = INFLOW < OUTFLOW.

Solution: False

22. FIRMS RAISE MONEY BY USE OF STOCKS, BONDS, AND DIVIDENDS.

Solution: True

23. OWNERS EQUITY= REVENUE – DIVIDENDS + EXPENSES – OWNERS PAID IN CAP.

Solution: True

24. RISKS ARE INDIRECTLY RELATED TO REWARDS.

Solution: False

25. MOODY’S, S & P, FITCH, AND SC JOHNSON ARE RATINGS AGENCIES FOR BOND

INVESTMENTS.

Solution: false