. 5) The dot-com bubble reminds us aboutwhat? a) Capitalmarkets are probably nev
ID: 2662656 • Letter: #
Question
.5)The dot-com bubble reminds us aboutwhat?
a) Capitalmarkets are probably never efficient.
b) Capitalmarkets are always inefficient.
c) Capitalmarkets are not always efficient.
d) All ofthese
.7) Which of the following statements isfalse?
a) Treasury bills (T-bills) have an original maturity of one year or less when they are issued.
b) Treasury notes and bonds have an original maturity of one year ormore.
c) Negotiable CDs are time deposits issued by domestic or foreigncommercial banks that can be sold to a third party.
d) Munisare long-term securities, issued by state and local governments,and are exempt from federal taxation.
1.0) The NPV for a project equals the presentvalue of the future cash flows divided by the initial investment.T/F
1.1) Firms that use debt financing .
a) Canalways claim the interest deductions.
b) Mustgenerate sufficient income from operations to claim thededuction.
c) Musthave high operating leverage.
d) All ofthese
1.3) A firm’s capitalstructure policy is an established guide for the firm to determinethe amount of money it will pay out as dividends. T/F
1.4) The market price of a bond in today’s dollarsis the future value of its promised future coupon and principalpayments T/F
5)The dot-com bubble reminds us about what?
a) Capitalmarkets are probably never efficient.
b) Capitalmarkets are always inefficient.
c) Capitalmarkets are not always efficient.
d) All ofthese
6) A stock with a beta less than 1.0 will rise or fallmore than the market. T/F
7) Which of the following statements isfalse?
a) Treasury bills (T-bills) have an original maturity of one year or less when they are issued.
b) Treasury notes and bonds have an original maturity of one year ormore.
c) Negotiable CDs are time deposits issued by domestic or foreigncommercial banks that can be sold to a third party.
d) Munisare long-term securities, issued by state and local governments,and are exempt from federal taxation.
10) The NPV for a project equals the present value ofthe future cash flows divided by the initial investment.T/F
11) Firms that use debt financing .
a) Canalways claim the interest deductions.
b) Mustgenerate sufficient income from operations to claim thededuction.
c) Musthave high operating leverage.
d) All ofthese
13) A firm’s capital structurepolicy is an established guide for the firm to determine the amountof money it will pay out as dividends. T/F
14) Because zero-coupon bonds make only a single paymentat maturity, they are the deepest-discount bonds possible.T/F
Explanation / Answer
.4) The market price of a bond in today’s dollars isthe future value of its promised future coupon and principalpayments T/F Answer: False Answer Details: The Market Price of a bond in today's Dollars cannot be the futurevalue of its promised future coupon and principal payments. BecauseDollar is a currency, And Value of a currency never stays constant.So it will be on future value of Dollar.
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