If a company has no operating leverage, its degree of financial leverage is equal to its degree of
combined leverage.
Indicate whether the statement is true or false
TRUE
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The too-big-to-fail policy is a policy under which bank regulators will not close a bank that is deemed to
A. have enough reserves to meet the cash requirements of its customers. B. have a history of low default risk on debt issue. C. be so large that its closure would affect the financial system and cause other banks to fail. D. be larger than the Federal Reserve System.
The principle of ________ proof suggests that people look to others to determine the correct response in many situations.
Fill in the blank(s) with the appropriate word(s).
If a company sells bonds and uses the proceeds to buy back common stock, the company's financial
leverage with increase. Indicate whether the statement is true or false
Expenditures by U.S. students abroad and foreign students pursuing studies in the United States would be considered a services trade and part of the U.S. current account
Indicate whether the statement is true or false.