27. Theoretically, takeovers should result in ___________.
A) improved management
B) increased stock price
C) increased benefits to existing management of taken over firm
D) A and B
E) A, B, and C
Answer: D Difficulty: Easy
Rationale: Theoretically, when firms are taken over, better managers come in and thus increase the price of the stock; existing management often must either leave the firm, be demoted, or suffer a loss of existing benefits.
28. Important trends changing the contemporary investment environment are
A) globalization.
B) securitization.
C) information and computer networks.
D) financial engineering.
E) all of the above
Answer: E Difficulty: Easy
Rationale: All of these are examples of important trends in the contemporary investment environment.
29. The means by which individuals hold their claims on real assets in a well-developed economy are
A) investment assets.
B) depository assets.
C) derivative assets
D) financial assets.
E) exchange-driven assets
Answer: D Difficulty: Easy
Rationale: Financial assets allocate the wealth of the economy. Book example: it is easier for an individual to own shares of an auto company than to own an auto company directly.