For a Corporation That Does Not Utilize the Services of an Independent

question 39

Multiple Choice

For a corporation that does not utilize the services of an independent registrar and stock transfer agent,which of the following represents a weakness in internal control over stock issuance?

• A)Stock certificates are prenumbered.
• B)Stock certificates are signed immediately upon receipt from the printer.
• C)Stock certificates are in the exclusive custody of a responsible officer.
• D)Stock certificates require the signature of two officers.

Explain the concept of beta and its importance in measuring stock volatility.

Identify sources of systematic risk and their impact on investment decisions.

Distinguish between absolute and relative measures of risk, such as standard deviation and coefficient of variation.

Understand the principles of portfolio theory and the relationship between risk and return.

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Definitions:

Price Searchers

Firms or individuals who determine the selling price of their goods or services with some degree of market power, enabling them to influence prices.

Price Takers

Participants in a market who accept the market price as given and have no influence over it, typically because of the competitive nature of the market.

Legal Structure

The framework within which a business operates, including its designation as a corporation, partnership, sole proprietorship, or other legal entity.

Barrier To Entry

Factors that make it difficult for new competitors to enter a market, such as high start-up costs or regulatory hurdles.