11. The purpose of secondary trading is to a. provide lower commissions. b. provide jobs for brokers and dealers. c. provide liquidity and competition between investments. d. provide a market for...

11. The purpose of secondary trading is to
a. provide lower commissions.
b. provide jobs for brokers and dealers.
c. provide liquidity and competition between investments.
d. provide a market for securities not handled in primary trading.

12. The stock of the DIDI Corp. has a required return of 16 percent. Woods current price is $55 and it current dividend per share is $1.80. Determine Wood’s dividend growth rate.


a. 10.65 percent
b. 11.11 percent
c. 12.81 percent
d. 13.75 percent

13. What is the present value factor of a $1 cash flow to be received annually at the end of each of the next 3 years if the discount rate is 15 percent?
a. 2.283
b. 1.859
c. 1.736
d. 1.626


14. Which of the following are not the purpose of financial intermediaries?
a. allow for indirect investment in the capital markets by households.
b. Aid in the flow of funds through the economy.
c. promote of unemployment
d. Help provide allocation of funds to the best investments.


15. Which of the following is a source of funds?
a. An increase in inventory
b. An increase in investments
c. An increase in account receivable
d. An increase in account payable