problem 1: Professors Harry Markowitz and William Sharpe got their Nobel Prize in economics for their contributions to the

A. options pricing model.
B. theories of risk-return and portfolio theory
C. theories of working capital management
D. theories of international capital budgeting

problem 2: Institutional investors are significant in today's business world because Answer

A. as a group they can vote large blocks of stock for the election of board members.

B. they have a fiduciary responsibility to the workers and investors that they represent to see that the firms they own are managed in an ethical way.

C. as large investors they have more said in how businesses are managed.

D. all of these

problem 3: Capital markets don’t include which of the following securities?

A. Commercial paper

B. Common stock

C. Preferred stock

D. Government bonds

problem 4: Agency theory examines the relationship between the

A. shareholders of the firm and firm's investment banker

B. owners of firm and managers of firm

C. shareholders and the firm's transfer agent

D. board of directors and large institutional investors

problem 5: Which of the following wouldn’t be classified as current asset?

A. Inventory

B. Prepaid expenses

C. Investments

D. Marketable securities

problem 6: Which of the following is the outflow of cash?

A. The sale of the company's common stock

B. The sale of equipment

C. Profitable operations

D. The payment of cash dividends