In Spite of Media Hype, What Is the Likely Rate

question 39

Multiple Choice

In spite of media hype, what is the likely rate of failure for companies backed by venture capitalists?

• A)1 out of 10
• B)50%
• C)1 out of 4
• D)3 out of 4

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Definitions:

Face Value

The nominal value of a security stated by the issuer, which is the amount to be repaid at maturity in the case of a bond or the value represented by each share of stock.

Retired Bonds

Bonds that have been paid off or bought back by the issuer before or at maturity, effectively removing them from existence and relieving the issuer of further obligations.

Effective-Interest Method

A method of calculating the amortized cost of a bond and the amount of interest expense over time, by applying a constant interest rate to the carrying value of the bond.

Straight-Line Method

A way of calculating depreciation by evenly spreading the cost of an asset over its useful life.