1. Recently, which of the following sources of funds has played the greatest role in the financing of U.S. nonfinancial firms?

A. Internal funds

B. Net equity issues

C. Net borrowing

D. All of the sources were approximately the same E. Government funds

2. As a provider of funds to a corporation, owning which of the following corporate securities will give you the most control rights?

A. Short-term bank loan

B. Long-term bond

C. Medium-term bond

D. Preferred stock

E. Common stock

3. In the United Sates, who holds the smallest portion of corporate equities?

A. Households

B. Pension funds

C. Insurance companies

D. Foreign investors

E. Mutual funds

4. The following are characteristics of preferred stock except: I) pays fixed dividends;

II) can demand payments of cumulative dividends;

III) has voting rights

A. I only

B. I and II only

C. III only

D. I and III only

E. II only

5. position

among

creditors

when it

comes to

Suppose a firm sets aside assets to protect particular investors. These assets are called:

A. Repurchased shares.

B. Senior debt.

C. Subordinated debt.

D. Collateral.

E. Time preference.

6. Which of the following instruments gives the owner the right to purchase securities directly from the firm at a fixed price during a specified period of time?

A. Warrant

B. Treasury stock

C. Collateral

D. Subordinated debt

E. Short-term bank loan