It is illegal for firms selling bonds to mislead or defraud investors. Investment firms have an obligation to inform their customers about the risks associated with the bonds. The Financial Industry Regulatory Authority (FINRA) is the largest non-governmental agency that regulates bonds (and stocks). Use the Internet to learn more about FINRA. How does it help enforce federal securities laws and protect investors?

Go to the FINRA Web site, www.finra.org. What is its mission? What information and advice does it offer to beginners?

Explain Section 619 of the Dodd-Frank Act.

What is the Dodd-Frank Act of 2010?

Which portfolio would a risk-averse investor choose? Explain.

Causwell Company began 2016 with 10,000 units of inventory on hand. The cost of each unit was $5.00. During 2016 an additional 30,000 units were purchased at a single unit cost, and 20,000 units remained on hand at the end of 2016 (20,000 units therefore were sold during 2016). Causwell uses a periodic inventory system. Cost of goods sold for 2016, applying the average cost method, is$115,000. The company is interested in determining what cost of goods sold would have been if the FIFO or LIFO methods were used. Required: 1. Determine the cost of goods sold for 2016 using the FIFO method. [ Hint: Determine the cost per unit of 2016 purchases.] 2. Determine the cost of goods sold for 2016 using the LIFO method.

What are the primary reasons for holding inventory?

What are the benefits and costs of holding inventory?

Give two examples of sunk costs, and explain why they are irrelevant in decision making.

Give two examples of equations that are linear and two examples of equations that are nonlinear.

What is a selling expense budget and a capital expenditures budget?

(a) How are mandatory spending and discretionary spending different? (b) How can a mandatory spending program be changed into a discretionary spending program?

Susanne has $10,000 to invest. She is considering buying investmentgrade corporate bonds because interest rates on bonds are somewhat higher than on CDs. She has rejected stocks because of the risk involved. Susanne feels that interest rates will rise, but in the meantime, she needs a relatively safe place for her money. Explain to Susanne how bond prices are affected by interest rates. Is she making the right decision? Explain.

Explain why you might choose a municipal bond paying 5 percent over a corporate bond paying 7 percent.