11th Set

Question 1

T/F: Beta provides a measurement of a range that the market may move in any given day.

Answer 1

False

The beta is a benchmark and does not indicate anything about market movement as a whole. It only measures the movement of a particular security or portfolio, as compared to the movement of the entire market.

Question 2

To be exempt under Regulation D of the Securities Act of 1933, the sale of securities must be limited with respect to the number of

A)
agents authorized to sell the security.
 B)
broker-dealers who offer the securities.
 C)
nonaccredited investors to whom the security is sold.
 D)
shares issued.

Answer 2

C) non accredited investors

Explanation
Regulation D provides a private placement exemption for securities that are sold to no more than 35 nonaccredited investors. There is no limit to the number of shares that can be issued or the number of accredited investors who may purchase the shares.

LO 20.e

Question 3

T/F: When a company declares a cash dividend, it will reduce retained earnings (part of shareholders’ equity)

Answer 3

True

Retained earnings part of SE

Question 4

Is retained earnings part of shareholder equity?

Answer 4

Yes

It is

Question 5

When a company declares a cash dividend, why isn’t assets immediately affected?

Answer 5

Because they haven’t paid it yet

Assets is effected when they actually pay the dividend later

Question 6

Abbreviation used to remember the order allocation priority for muni bond issues

Answer 6

PGDM (Pro Golfers Don’t Miss)

Presale, group net, designated, member