Which of the Following Statements Would Be True If You

question 162

Multiple Choice

Which of the following statements would be true if you own stock in a company?

• A)You are an owner of the retained earnings and capital stock of the company.
• B)You have a claim to the assets of the business.
• C)You have the right to receive interest on an annual basis.
• D)You have the right to a portion of the company's revenues each accounting period.

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Definitions:

Compounded Annually

This is an interest calculation method where interest is added to the principal once a year.

Effective Rate

The actual interest rate of an investment or loan, taking into account the effects of compounding.

Compounded Semi-Annually

Interest calculation method where the interest is added to the principal sum twice a year, causing the interest to earn interest.

Strip Bond

A type of bond where the principal and regular coupon payments have been separated and are sold individually as zero-coupon bonds.