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Chapter 16 Financial Management and Securities Markets Quiz 1

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Chapter 16 Financial Management and Securities Markets Quiz

1. A marketable security is a temporary investment of cash. 
Select one: True  False 

2. Commercial paper is issued by large companies and backed by collateral. 
Select one: True False  
3. Eurodollar deposits can only be made at banks located in London. 
Select one: True False 
4. The principal is the amount of money a business pays to use a bank's funds. 
Select one: True False
5. Lenders first evaluate a borrower's history of borrowing and repaying loans by looking at the borrower's past credit history. 
Select one: True False 

6. Capital budgeting is the process of analyzing business needs and the selection of assets that will maximize the value of the business. 
Select one: True  False 

Select one: True  False 

8. The par value is the interest rate on a bond. 
Select one: True False  
9. Two common means of financing with long-term liabilities are: equity financing and debt financing. 
Select one: True  False 

10. Securities markets provide liquidity. 
Select one: True  False