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Which of the following statement regard the retained earnings is correct? Retained earnings result from the sale of additional shares of stock to investor Retained earnings equal to the difference between market value and book value of the firm Retained earnings result from income not paid to shareholders Retained earnings equal to the difference between assest and liabilites QUESTION 28 Which of the following is true? Book value is a better measurement than market value The separation ownership and management is one distinctive feature of corporations. The primary goal of any company should be to maximize current period profits. Diversification decreases the variability of both specific and market risk. QUESTION 29 A portfolio manager claims that the mutual fund he managed obtained a 10%, 6% and 8% return in the past three years, while the market return was only 8%, 4.8%, and 6.4% in the past three years. Based on this information, do you believe this manager good at picking stocks? If not, what other information do you need? Path:p vvoras: QUESTION 30 What is maximum that can be lost by an individual shareholder when the corporation is bankrupt? the amount of their initial investment. the amount of their share of the profits their proportionate share required to pay the corporation's debts. the amount of their personal wealth. QUESTION 31 Long-term Treasury bonds usually offer higher return than treasury notes due to: maturity premium default premium the uncertainty of their maturity date higher coupon rate QUESTION 32 "A project's expected return is 10%, which represents a 20% return in a boom economy and a -5% return in a recession economy. What is the probability of a boom if these are the only two economic states?" 60% 40% 66.67% 33.33%

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