Chapter 15 1. A security is a A) regulation dealing with the transactions of investments B) system aimed at protecting the interests of the market participants C) share or interest representing financial value D) process related to the valuation of a financial instrument 2. Securities are A) commonly traded on an exchange B) assets traded between companies working in the same industry C) owned by the investee D) always considered to be long-term investments 3. A(n) is represented by a certificate and is commonly traded on an exchange. A) inventory B) investee C) interest D) security 4. Which of the following is NOT an example of a security? A) preferred stock B) municipal bond C) Treasury bills D) All are examples of a security. 5. A debe security A) represents a credit relationship with another company or governmental entity, and typically pays interest for a fixed period B) represents stock ownership in another company and sometimes pays dividends C) is a standardized contract between two parties to buy or sell an underlying security at a predetermined price on a specific date D) is a cash market transaction in which the ownership of the underlying asset is deferred until a Specific date 6. Which of the following is TRUE of the comparison between equity securities and debt securities? A) Debe securities represent stock ownership in a company whereas equity securities representa credit relationship with the company. B) Equity securities may earn dividend revenue whereas debe securities earn interest revenue. C) Neither debt securities or equity securities mature at a stated date. D) Both debt securities and equity securities pay interest 7. Which of the following is TRUE of debt securities? A) Debe securities entitle the holder to receipt of a share of profit in the form of dividends. B) Debt securities typically pay interest for a fixed period ) Debt securities include preferred stocks D) Debt securities represent ownership interests of the investors. 8. Which of the following is an example of debt securities? A) preferred stocks B) real estate C) common stocks D) corporate bonds