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1. A treasury obligation having no fixed rate of interest with a thirty day maturity due April 22 is most likely a:
A) Series EE bond
B) tax anticipation bill
C) treasury note
D) Series H bond
2. Bubba plans to borrow some money and pledge securities as collateral. Which of the following can he not
use as collateral?
A) US treasury bills
B) US treasury bonds
C) US treasury notes
D) Series EE bonds
3. A corporation makes a rights offering to raise $10 million of new capital by issuing one million shares of
common stock. If it already has six million shares outstanding at the time of the offering. What
subscription ratio is the corporation establishing for each new share?
A) 6 million rights per share
B) 10 million rights per share
C) 6 rights per share
D) 10 rights per share
4. Who obtains and pays the municipal bond attorney rendering a legal opinion about the validity of the bond
issue?
A) the purchaser of the bonds
B) the underwriter
C) the municipality's financial adviser
D) the issuing municipality
5. Bubba Corporation has net income of $4,200,000. It has 100,000 outstanding shares of 8% preferred
stock ($100 par value) and 400,000 shares of common stock ($10 par value). What are the earnings per
share of common stock?
A) $10.50
B) $6.00
C) $4.20
D) $8.50
Solutions:
| Question # 1 Answer: B | Question # 2 Answer: D | Question # 3 Answer: C | Question # 4 Answer: D | Question # 5 Answer: D |
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