Question

T/F 1. Stockholders are also known as owners of a corporation.

T/F 2. The USA has a progressive income tax policy.

T/F 3. As demand increase prices will go down.

T/F 4. The books are open in a PUBLICLY traded company

T/F 5 .The Fed will usually raise interest rates to stimulate the economy.

6. Explain why it is so important for a company to have good forecast in the future.

7. Explain the term “ Depreciation is a NON cash expense” and how do company’s use it.

8. List a few advantages and disadvantages for opening up a company as a corporation.

9. Why do companies issue more stock (do equity financing), and tell why they might want to sell bonds (debt financing) instead.

10. Explain why online trading has become so big. Tell both why there are advantages and disadvantages to it.

11. If you invest $ 10,000 into a stock growing at 13 % how much will you have in 1 year, how much in 2 years and how much in 3 years?

12. If you put $ 100,000 into a bond paying 6 % , how much should you return a year?

Answer 1

T/F 1. True. Stockholders have ownership right which means they have a say in all important matters of the organization and take up the risks that come up owning a company.

T/F 2. True. The tax rate changes rises as income increases.

T/F 3. False. Demand and Price have a positive relationship. As demand for a commodity sees an increase so does the price of a commodity.

T/F 4. True. The statements of a publically traded company can be accessed by anyone even if they do not own shares of the organization.

T/F 5. False. The Fed would reduce the interest rates if they hope to stimulate the economy as people will have less of an incentive to save and would end up spending more resulting in higher inflow of cash into the economy.