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To be classified as short-term investments, debt investments must be readily marketable and be expected to be sold within 3 months from the date of purchase.
If dividends paid to common stockholders are not legal obligations of a corporation, is the cost of equity zero? Explain your answer.
Which formula would you use to solve for the payment required for a car loan if you know the interest rate, length of the loan, and the borrowed amount? Explain.
If you are doing PVA and FVA problems, what difference does it make if the annuities are "ordinary annuities" or "annuities due"?
Suppose you are planning to make regular contributions in equal payments to an investment fund for your retirement. Which formula would you use to figure out how much your investments will be worth
What does it mean when we say that the correlation coefficient for two variables is -1? What does it mean if this value were zero? What does it mean if it were +1?
At January 1, 2012, there was a credit balance of $900 in the Market Adjustment-Available for- Sale account. The required adjusting entry would be?
What happens to the riskiness of a portfolio if assets with very low correlations (even negative correlations) are combined?
If a company wants to increase its reported income by manipulating its investment accounts, which should it do? Sell its "winner" trading securities and hold its "loser" trading securities.
What is risk aversion? If common stockholders are risk averse, how do you explain the fact that they often invest in very risky companies?
Explain how the cash budget and the capital budget relate to pro forma financial statements.
At the end of the first year of operations, the total cost of the trading securities portfolio is $120,000 and the total fair value is $115,000. What should the financial statements show?
If Horicon uses the equity method to account for its investment, the balance in the investment account on December 31, 2012, will be?
The equity method of accounting for long-term investments in stock should be used when the investor has significant influence over an investee and owns.
Karen Duffy Company receives net proceeds of $42,000 on the sale of stock investments that cost $39,500. This transaction will result in reporting in the income statement a.
Stan Free Company sells debt investments costing $26,000 for $28,000 plus accrued interest that has been recorded. In journalizing the sale, credits are?
Which of the following is not a primary reason why corporations invest in debt and equity securities? They wish to gain control of a competitor.
Calculate the price of the bond you have selected relative to the 5%. Is the bond selling at a premium or a discount? Why?
Compare and contrast a defined benefit and a defined contribution pension plan.
An interest rate of 9 percent and using the proceeds on a stock repurchase. Ignore taxes. How many shares will the firm repurchase if it issues the debt securities?
Compare and contrast mutual and stockholder-owned savings and loan associations.
What are a bank's primary reserves? When the Fed sets reserve requirements, what is its primary goal?
What can a financial institution often do for a surplus economic unit that it would have difficulty doing for itself if the surplus economic unit (SEU) were to deal directly with a deficit economic
If the discount rate for this project is 10 percent, what is the project NPV? What is the project IRR?
Would there be positive interest rates on bonds in a world with absolutely no risk (no default risk, maturity risk, and so on)? Why would a lender demand, and a borrower be willing to pay, a positi