Chap 10 Quiz - Sec & Inv

What type of stock represents an equity interest in a firm that usually does not allow for significant voting rights?

• preferred stock

• foreign stock

• common stock

• all of these are correct

Venture capital funds receive money from wealthy investors and from pension funds that are willing to maintain the investment for a period.

• long-term period such as 5 or 10 years

• short-term period such as less than 3 years

• none of these answers are correct

• 24 hour

• revenue

Private equity funds pool money provided by institutional investors and invest in businesses.

• True

• False

Initial public offerings tend to occur more frequently during____ stock markets.

• elephant

• bear

• bull

• donkey

For a company to list its stock on an exchange, it has to meet required minimums for what?

• shares outstanding

• earnings

• cash flow

• revenue

• all of these are correct

Secondary markets allow investors to sell the stock they previously purchased to other investors.

• True

• False

If shareholders are displeased with the way managers are managing a firm, they have which of the following choices?

• Do nothing and retain their shares

• Sell the Stock.

• Engage in shareholder activism.

• All of these are correct answers.

The Sarbanes-Oxley Act placed____ regulation on publicly traded companies and their auditors.

• zero

• more

• none of these answers are correct

• less

• none of these are correct

A public offering is feasible if the owners want to sell at least___ in stock

• $50M

• $70M

• $20M

In general, favorable news about a firm's performance will make investors believe that the firm's stock is___ at its prevailing price.

• overvalued

• not valued at all

• perfectly valued

• under valued