31. The sale of bonds by a country or a corporation is referred to as the
(A) Investment decision
(B) financing decision
(C) offering loan
(D) capital structure

32. The cost of an item is $100. The seller has a mark-up of 20%. What is the selling price?
(A) $80
(B) $100
(C) $120
(D) $140

33. Generally, a corporation is owned by the
I. Managers
II. Board of Directors
III. Stock holders
IV. stake holders
(A) II only
(B) I and II
(C) III only
(D) III and IV

34. A firm’s investment decision is also called the
(A) financing decision
(B) capital budgeting decision
(C) liquidity decision
(D) none of these

35. Conflicts between shareholders and managers’ interest is called
(A) management problem
(B) area of the board of directors
(C) risk
(D) agency problem

36. In the principle-agent framework
(A) managers are the principals
(B) directors are the principals
(C) shareholders are the principals
(D) shareholders are the agents

37. The risk that can be eliminated by diversification is called
(A) specific risk
(B) security risk
(C) market risk
(D) beta

38. The risk that cannot be eliminated by diversification is called
(A) specific risk
(B) security risk
(C) market risk
(D) beta

39. Which from the following is the safest investment?
(A) Treasury bills
(B) Government bond
(C) Corporate bond
(D) Stocks

40 The spread of possible outcomes of an investment returns is measured by
(A) variance
(B) standard deviation
(C) skewness
(D) kurtosis

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