FM reviewer (quiz)

Any long term promissory note issued by the firm

• Bond

• Securities

IN REPOS:

The amount the investor lends is less than the market value of the securities, a difference called the spread or haircut, to ensure that it still has sufficient collateral if the value of the securities should fall before the dealer repurchases them.

• oki

• xx

STOCKS-- traditionally known as ordinary equity share.

a form of long-term equity that represents ownership interest of the firm

• true

• xx

Ordinary equity shareholders are called

• residual owners

• residual stockholders

• residual claimants

They are the true owners of the corporation.

• Ordinary (common) shareholders

• preferrence shares holder

Shareholders assume a limited liability because their risk of potential loss is limited to their investment in the corporation's equity shares.

• true

• xx

Ordinary equity share may be sold with or without par value

• true

• false

Whether or not ordinary equity share has any par value is stated in the corporation's charter

• true

• false

the stated value attached to a single share at issuance

• Par value

• nominal value

the issue price in excess of par is recorded as additional paid-in capital, capital surplus, or capital in excess of par.

• true

• xxx