Question

1. One of the most commonly used measures of inflation is the

Select one:

1. consumer price index.
2. inflation factor.
3. fiscal policy.
4. gross domestic product.

2. The means by which the Canadian government imposes taxes on individuals and corporations and the way it spends tax revenues is the

Select one:

1. bank policy.
2. budget policy.
3. taxation policy.
4. fiscal policy.

3. If you were a supplier of a company selling goods on 30-day terms, you would be most concerned with ratios measuring

Select one:

1. financial leverage.
2. liquidity.
3. profitability.
4. efficiency.

4. Callable bonds are issued when interest rates are expected to

Select one:

1. stay the same.
2. convert.
3. rise.
4. decline.

5. The best way to ensure that you will receive dividends is to

Select one:

1. purchase preferred stock.
2. purchase common stock.
3. purchase bonds.
4. day trade.

Answer 1

1. One of the most commonly used measures of inflation is the a. consumer price index.

The consumer price index consists of a basket of commodities and measures the price over time to calculate inflation.

Fiscal policy and GDP cannot be used to gauge inflation.

2. The means by which the Canadian government imposes taxes on individuals and corporations and the way it spends tax revenues is the d. fiscal policy

The fiscal policy enables the government to impose a tax and plans on how to spend the taxes collected. Bank policy deals with the banking sector, and taxation policy deals with only how much different strata of the society should be taxed. The budget policy deals with the overall spending of the budget.

3. If you were a supplier of a company selling goods on 30-day terms, you would be most concerned with ratios measuring b.liquidity

The supplier would be concerned if the customer has enough liquid assets to pay him off in 30 day time period.

4. Callable bonds are issued when interest rates are expected to d. decline

The issuer issues callable bonds if the market interest rates are expected to decline. This way the the issuer can call the bond later and reissue the bond at a lower rate of interest.

5. The best way to ensure that you will receive dividends is to a.purchase preferred stock

Preferred stock have fixed dividend policy per period, unlike common stock. Bonds provide periodic coupons. Day trade provides profit and loss each day and are considered to be very risky.