1. IS THE FOLLOWING STATEMENT TRUE or FALSE? “A financial security is simply a contract between the provider of funds and the user of these funds that clearly specifies the amount of money that has been provided and the terms and conditions of how the user is going to repay the provider.” a. True b. False 2. IS THE FOLLOWING STATEMENT TRUE or FALSE? “A share of stock represents ownership of a corporation divided up into units, so that multiple people can own a percentage of the business.” a. True b. False 3. A consol is a bond that: a. Pays a fixed annual coupon amount, and when originally issued, is set to mature in 30 years. b. Pays a fixed annual coupon amount, and when originally issued, is set to mature in 50 years. c. Does not pay an annual coupon (i.e., the annual coupon payment is $0) but when it matures pays out the par value of the bond. d. Pays a fixed annual coupon amount forever. e. Does not pay an annual coupon (i.e., the annual coupon payment is $0) and never matures
1. IS THE FOLLOWING STATEMENT TRUE or FALSE? “A financial security is simply a contract
between the provider of funds and the user of these funds that clearly specifies the amount of money that has
been provided and the terms and conditions of how the user is going to repay the provider.”
a. True
b. False
2. IS THE FOLLOWING STATEMENT TRUE or FALSE? “A share of stock represents ownership of a
corporation divided up into units, so that multiple people can own a percentage of the business.”
a. True
b. False
3. A consol is a bond that:
a. Pays a fixed annual coupon amount, and when originally issued, is set to mature in 30 years.
b. Pays a fixed annual coupon amount, and when originally issued, is set to mature in 50 years.
c. Does not pay an annual coupon (i.e., the annual coupon payment is $0) but when it matures pays out the
par value of the bond.
d. Pays a fixed annual coupon amount forever.
e. Does not pay an annual coupon (i.e., the annual coupon payment is $0) and never matures
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