Question 1

Which agency implements monetary policy through purchases and sales of treasury securities?

Options :

A : Federal Deposit Insurance Corporation

B : Fannie Mae

C : Office of the Comptroller of the Currency

D : Federal Reserve

Answer: D

Question 2

Which of the following are reasons for companies to use controlled disbursement?

I.To obtain timely check presentment information

II.To enhance supplier relationships

III.To increase their available cash

IV.To improve their overall creditworthiness

Options :

A : I and III only

B : II and IV only

C : I, III, and IV only

D : I, II, III, and IV

Answer: A

Question 3

Company A is a large public company with annual revenue of $1.2 billion and high fixed costs. Its stock is listed on the New York Stock Exchange. Company B is a mid-sized company with annual revenue of $100 million and low fixed costs. Its stock is listed on the NASDAQ. Which of the following statements is MOST LIKELY to be true when comparing Company A and Company B?

Options :

A : Company A has greater reporting requirements and more marketable stock than Company B

B : Company A has greater reporting requirements and less marketable stock than Company B.

C : Company B has greater reporting requirements and more marketable stock than Company A.

D : Company B has greater reporting requirements and less marketable stock than Company A.

Answer: A

Question 4

Company XYZ had the following sales over the last 5 years:

Magento-Certified-Professional-Cloud-Developer

The company raised funds to invest in its operations. Considering the company’s growth, it is interested in future options that will allow it to maintain its debt level and keep debt costs low. The company is not concerned about changes to the working capital structure. Which security did the company issue?

Options :

A : Unsecured bond

B : Bond with an equity kicker

C : Zero-coupon bond

D : Convertible security

Answer: B

Question 5

Company ABC needs external capital to finance a new product line. Its operating leverage is high, and its revolving credit agreement contains a ratings trigger. What will Company ABC MOST LIKELY do to finance its new product line?

Options :

A : Issue convertible debentures

B : Issue long-term notes.

C : Issue common stock.

D : Use retained earnings.

Answer: C