1. True or False. If a firm repurchases its stock in the open market, the shareholders who tender the stock are subject to capital gains taxes.
2. An example of direct finance
A.You buy shares in a mutual fund
B. you buy government bond from the US treasury
C. you set aside funds in a special fund in a special bank account to finance retirement
3. If you deposit $ 100 in cash into a checking account at Friedman National, you would increase the bank's liablity to make new loans by
A. $90
B. $100
C. $900
D. $1000
(i.e, $100 mulitplied by the reciprocal of the reserve requirement.