# question 1 1 tco a in the united states the most common type of business by number o 5221062

 Question 1.1. (TCO A) In the United States, the most common type of business by number of businesses is the _____. (Points : 5)

[removed] sole proprietorship
[removed] C corporation
[removed] S corporation
[removed] LLC

 Question 2.2. (TCO A) A sole proprietorship is owned by (Points : 5)

[removed] one person.
[removed] one or two people, but if there are two owners, they must be married to each other.
[removed] up to 100 owners.
[removed] up to 64 owners.

 Question 3.3. (TCO B) Which of the following would cause the present value of an annuity to decrease? (Points : 5)

[removed] Reducing the number of payments.
[removed] Increasing the number of payments.
[removed] Decreasing the interest rate.
[removed] Decreasing the liquidity of the payments.

 Question 4.4. (TCO B) In a TVM calculation, if incoming cash flows are positive, outgoing cash flows must be (Points : 5)

[removed] positive.
[removed] negative.
[removed] either positive or negative. It really doesn’t matter.
[removed] stated in time units that are different from the time units in which the interest rates are stated.

5. (TCO G) If you were a manager of a company, which of the three right side components of the DuPont Identity would you want to increase and which would you want to decrease, other things being equal? Give a specific example for how to do that for each of the three. (Points : 20)

6. (TCO D) A stock has just paid a dividend and has declared an annual dividend of \$2.00 to be paid one year from today. The dividend is not expected to grow. The return on equity for similar stocks is 12%. What is P0? (Points : 20)

7. (TCO D) A stock has just paid a dividend has declared an annual dividend of \$12.00 to be paid one year from today. The dividend is expected to grow at a 7% annual rate. The return on equity for similar stocks is 12%. What is P0? (Points : 20)

8. (TCO D) A bond has 5 years to maturity and has a YTM of 8%. Its par value is \$1,000. Its semiannual coupons are \$50. What is the bonds current market price? (Points : 10)

9. (TCO D) A bond currently sells for \$887 even though it has a par of \$1,000. It was issued two years ago and had a maturity of 10 years. The coupon rate is 7% and the interest payments are made semiannually. What is its YTM? (Points : 10)

10. (TCO D) Explain thoroughly how stock portfolios affect the risk to an investor. (Points : 30)