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NEW QUESTION: 1
Which of the following statements is correct regarding both debt and common shares of a corporation?
A. Common shares have a higher priority on liquidation than debt.
B. Common shares represent an ownership interest in the corporation, but debt holders do not have an
ownership interest.
C. Common shares typically have a fixed maturity date, but debt does not.
D. Common shareholders and debt holders have an ownership interest in the corporation.
Answer: B
Explanation:
Choice "a" is correct. Common shares represent an investment in the corporation whereby the common
shareholder becomes a part owner of the corporation. A debt holder is a creditor of the corporation. The
corporation has borrowed money from the debt holder and promises to repay at a later date. A debt holder
is not an owner of the corporation.
Choice "b" is incorrect. Unlike a common shareholder, a debt holder does not have an ownership interest
in the corporation.
Choice "c" is incorrect. Common shares do not have a fixed maturity date, but debt securities do.
This answer is backwards.
Choice "d" is incorrect. Upon liquidation of a corporation, the creditors of the corporation are paid first.
After the creditors are paid, the shareholders are paid on a pro rata basis. Thus, debt holders (creditors)
have a higher priority than stockholders.

NEW QUESTION: 2
DRAG DROP

Answer:
Explanation:

NEW QUESTION: 3
For a corporate bond, which of the following statements is true:
I. The credit spread is equal to the default rate times the recovery rate II. The spread widens when the ratings of the corporate experience an upgrade III. Both recovery rates and probabilities of default are related to the business cycle and move in opposite directions to each other IV. Corporate bond spreads are affected by both the risk of default and the liquidity of the particular issue
A. III only
B. III and IV
C. IV only
D. I, II and IV
Answer: B
Explanation:
Explanation
The credit spread is equal to the default rate times the loss given default, or stated another way, default rate times (1 - recovery rate). It is not equal to the default rate times the recovery rate. Therefore statement I is not correct.
When ratings are upgraded by rating agencies, the spread contracts and not widen. Therefore statement II is not correct.
Both recovery rates and probabilities of default are related to the business cycle, and they move in opposite directions. Economic recessions witness an increase in the default rate and a decrease in the recovery rate, and economic expansions result in a decrease in the default rate and an increase in the recovery rates when default does happen. Therefore statement III is correct.
Bond spreads incorporate both the risk of default, but also considerations of liquidity in the case of corporate bonds. Hence statement IV is correct.

NEW QUESTION: 4
Which two tasks should be performed before you delete a phone button template that is currently in use?
(Choose two.)
A. Assign a different phone button template to any devices that use the phone button template that you want to delete.
B. Delete the devices that use the phone button template that you want to delete.
C. Rename the button template as "OUT OF SERVICE" to dissociate it from any devices that use the phone button template that you want to delete.
D. Check the "ALLOW WITH CONFIRMATION" checkbox in the setting "Delete Button Template in use" under System Parameters, and save the setting.
Answer: A,B

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