Of the four theories that explain how interest rates on bonds with different terms to maturity are related, the one that views long-term interest rates as equaling the average of future short-term rates expected to occur over the life of the bond is
the
A) pure expectations theory.
B) preferred habitat theory.
C) liquidity premium theory.
D) segmented markets theory.
A
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Long-term investments are held for all of the listed reasons below except
a. to earn the interest or dividend income b. for their long-term gain potential c. to have influence over another business entity d. to meet current cash needs
In any competitive environment, reputation is the principal source of competitive advantage
Indicate whether the statement is true or false
Equipment costing $30,000 with a residual value of $3,000 and an estimated life of eight years has been depreciated using the straight-line method for two years. Assuming a revised estimated total life of five years, the depreciation expense for year 3 would be
a. $3,375. b. $4,500. c. $6,750. d. $5,400.
The final step in preparing the statement of cash flows is to use the information provided in the master T-account for _____ to prepare the formal statement
a. Cash b. Funds c. Operations d. Changes in accounts e. none of the above