just answer the question
T/F 1. Financial markets connect production needs for money with consumptions available savings.
T/F 2. Money markets deal in short-term debt.
T/F 3. Sunk costs have already been spent and are ignored.
T/F 4. Retained earnings are not a source of capital.
T/F 5 . The FED usually lowers interest rates if there is a fear of inflation.
6.Explain why the cost of debt is lower than the cost of capital?
7.Explain what is meant by the statement- depreciation is a non-cash expense and how do companies use it.
8.How long does it take money earning 12% to double? Use both the rule of 72 and your financial calculator.
9.Explain the three ways a company can raise capital.
10 If an investor has a short term view on her investments and in a time of high interest rates – which is better stocks or bonds? Why?
11.Explain the difference between common and preferred stock.
12.If you own 3 stocks A, B, and C. What is your total return of your portfolio?
Stock $ invested Return
A $ 6,000 6 %
B 9,000 9 %
C 15,000 11 %
13.Explain the RISK/ REWARD theory?
14.GM issued a $ 1,000, 30-year bond 5 years ago at 9 % interest. Comparable bonds yield 6 % today. What should GM bond sell for now?