Financial literacy

13. I have made a careful assessment of my financial needs on retirement, in exa

13. I have made a careful assessment of my financial needs on retirement, in exactly 30 years time. Taking into account inflation, and my future living expenses on retirement, I c…

13. If the Beta for stock A is less than one, then according to the CAPM a. stoc

13. If the Beta for stock A is less than one, then according to the CAPM a. stock A's required return is equal to the required return on the market portfolio. b. stock A's require…

13. In 1973, trading of standardized options on a national exchange started on t

13. In 1973, trading of standardized options on a national exchange started on the _________. A. AMEX B. CBOE C. NYSE D. CFTC 14. An American call option gives the buyer the right…

13. In the currency markets, $1 = 0.75 British pound and 1 Euro = $1.25. Wolveri

13. In the currency markets, $1 = 0.75 British pound and 1 Euro = $1.25. Wolverine Cola produces cherry cola in England at a cost of 0.9 British pound per unit. The product is sol…

13. In the following ordinary annuity, the interest is compounded with each paym

13. In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compounding period.Find the amount of time needed fo…

13. Jack purchases a corporate bond with par-value 30000 on January 15, 2000. Th

13. Jack purchases a corporate bond with par-value 30000 on January 15, 2000. The bond matures at par-value on January 15, 2030 and pays semiannual coupons at an annual nominal ra…

13. Jack purchases a corporate bond with par-value 30000 on January 15, 2000. Th

13. Jack purchases a corporate bond with par-value 30000 on January 15, 2000. The bond matures at par-v alue on January 15, 2030 and pays semiannual coupons at an annual nominal r…

13. Jill is the CFO of Summertime Adventures which is a seasonal firm specializi

13. Jill is the CFO of Summertime Adventures which is a seasonal firm specializing in products related to water sports. The firm purchases inventory one month before it is sold an…

13. Jones company acquires the Mathis company. Jones is in a totally unrelated b

13. Jones company acquires the Mathis company. Jones is in a totally unrelated business to mathis. This is an example of: a. vertical integration b. horizontal integration c. dive…

13. Last month, Lloyd\'s Systems analyzed the project whose cash flows are shown

13. Last month, Lloyd's Systems analyzed the project whose cash flows are shown below. However, before the decision to accept or reject the project, the Federal Reserve took actio…

13. Markley and Stearns is a multi-divisional firm that uses its WACC as the dis

13. Markley and Stearns is a multi-divisional firm that uses its WACC as the discount rate for all proposed projects. Each division is in a separate line of business and each pres…

13. Mary and Jacob just married. Due to their financial education from their col

13. Mary and Jacob just married. Due to their financial education from their colleges, they already plan to save for their future. Mary plans to save $200 a month, starting today,…

13. More on the corporate valuation model Globo-Chem Co. is expected to generate

13. More on the corporate valuation model Globo-Chem Co. is expected to generate a free cash flow (FCF) of $9,925.00 million this year (FCF1 = $9,925.00 million), and the FCF is e…

13. Multiple IRRs for a particular project can occur when there is (are): (Point

13. Multiple IRRs for a particular project can occur when there is (are): (Points : 3)        large abandonment costs at the end of a project's life        a major shutdown and re…

13. NPV versus IRR. Here are the cash flows for two mutually exclusive projects:

13. NPV versus IRR. Here are the cash flows for two mutually exclusive projects: (LO8-1 and LO8-2) Project    C0                        C1                                        C…

13. Petrus Company has a unique opportunity to invest in a two-year project in A

13. Petrus Company has a unique opportunity to invest in a two-year project in Australia. The project is expected to generate 1,000,000 Australian dollars (A$) in the first year a…

13. Project Evaluation [LOI] Dog Up! Franks is looking at a new sausage system w

13. Project Evaluation [LOI] Dog Up! Franks is looking at a new sausage system with an installed cost of $540,000. This cost will be depreciated straight-line to zero over the pro…

13. RFID chips have been used to: (Points : 5) track livestock. track marathon r

13.RFID chips have been used to: (Points : 5) track livestock. track marathon runner's time. track inventory at retailers. all of these. 14.When the term structure of interest rat…

13. Segregate the return data in the above table into bull and bear markets, usi

13. Segregate the return data in the above table into bull and bear markets, using the S&P 500 index as the proxy for the market. a) What was the average return for the two co…

13. Selling a bond at a premium is face value than A) selin B) selling the bond

13. Selling a bond at a premium is face value than A) selin B) selling the bond for face va O selling the bond for less than face g the bond for more increasing the interest rate …

13. Short-term versus long-term financing AaAa Generally speaking, short-term de

13. Short-term versus long-term financing AaAa Generally speaking, short-term debt is riskier than long-term debt, but it also has some advantages. In the following table, identif…

13. Social Media & The Internet–How has it impacted marketing? You must answer “

13. Social Media & The Internet–How has it impacted marketing? You must answer “a.” Then Select 1 one from “b”, “c”, “d”, or “e.” a. by the numbers (world internet stats) http…

13. Some companies choose to issue preferred stock in addition to common stock.

13. Some companies choose to issue preferred stock in addition to common stock. Most issues of preferred stock are known as cumulative preferred stock. This means that: A. The fir…

13. Sub-Prime Loan Company is thinking of opening a new office, and the key data

13. Sub-Prime Loan Company is thinking of opening a new office, and the key data are shown below. The company owns the building that would be used, and it could sell it for $100,0…

13. Sukuk investors observed liquidity risk because (a) delay or default on paym

13. Sukuk investors observed liquidity risk because (a) delay or default on payments/repayments by the originator (b) asset value falls reducing repayment amount on maturity (c) n…

13. Terroni Enterprises has a beta of 1.10, the real risk-free rate is 2.00%, in

13. Terroni Enterprises has a beta of 1.10, the real risk-free rate is 2.00%, investors expect a 3.00% future inflation rate, and the market risk premium is 4.70%. What is Scheuer…

13. The IRR calculation will general more than one answer when a. The dividend p

13. The IRR calculation will general more than one answer when a. The dividend policy of the firm isn’t clear and shows high variability in payouts between years b. The cash flow …

13. The IRR calculation will general more than one answer when a. The dividend p

13. The IRR calculation will general more than one answer when a. The dividend policy of the firm isn’t clear and shows high variability in payouts between years b. The cash flow …

13. The Tool Box needs to purchase a new machine costing $1.46 million. Manageme

13. The Tool Box needs to purchase a new machine costing $1.46 million. Management is estimating the machine will generate cash inflows of $223,000 the first year and $600,000 for…

13. The US has a _________________ because foreigners invest more in the US than

13. The US has a _________________ because foreigners invest more in the US than we invest in foreign countries. a. Current Account Surplus b. Current Account Deficit c. Capital A…

13. The firm issued 502,000 shares of common stock which is now priced at $30 pe

13. The firm issued 502,000 shares of common stock which is now priced at $30 per share in the market. The firm's last common stock dividend was paid in the amount of $3. Dividend…

13. The tax system Provisions of the U.S. Tax Code for Corporations and Individu

13. The tax system Provisions of the U.S. Tax Code for Corporations and Individuals In general, is the U.S. federal tax sy The applicable tax rate for S corporations is based on t…

13. The working capital requirements for a new project are due to the required i

13. The working capital requirements for a new project are due to the required inventory levels. The firm requires an inventory valued at $20,000 in time period 0, $30,000 in time…

13. Three investors agree on what a stock\'s next dividend will be and its growt

13. Three investors agree on what a stock's next dividend will be and its growth rate, but are basing their required returns on economic projections and have assigned probabilitie…

13. To bulld discipline and get Into the hablt of saving, you should: Use pre-au

13. To bulld discipline and get Into the hablt of saving, you should: Use pre-authorized checking O Avold extra expenses such as gourmet coffee O Pack a lunch and save the cost of…

13. Typical problems with using fiscal policy to manipulate economic growth incl

13. Typical problems with using fiscal policy to manipulate economic growth include all but which one of the following? It is often implemented too slowly due to political process…

13. Use the following information to calculate the three interest coverage ratio

13. Use the following information to calculate the three interest coverage ratios indicated (to one decimal place) EDIT i S1000 Depreciation is $300 Rent Expense is $75 Interest E…

13. Western Apparel Company owns two stores and management is considering elimin

13. Western Apparel Company owns two stores and management is considering eliminating the East store due to declining sales. Segmented contribution income statements are as follow…

13. What is the current share value of L-S Mining Company\'s stock to an investo

13. What is the current share value of L-S Mining Company's stock to an investor who has a required rate of return of 28 percent? The current dividend is $3.75(D0) and the dividen…

13. What is the price expected at the end of the next period for the stock descr

13. What is the price expected at the end of the next period for the stock described in the previous question? A) $12.48 B)S15.60 C) $16.64 D) $24.96 E) S31.20 9. Suppose that a s…

13. When appraising a new home in which no one has ever lived, an appraiser will

13. When appraising a new home in which no one has ever lived, an appraiser will likely use the A. Cost approach B. BPO C.GRM 20. Assuming that all of the transactions are federal…

13. Which of the following is a true statement? A. American options always have

13. Which of the following is a true statement? A. American options always have the same value as European options. B. Black-Scholes formula accurately calculates the market optio…

13. Which of the following is not a key advantage of separately managed accounts

13. Which of the following is not a key advantage of separately managed accounts? a) Frovides access to elite porttolo managers under oversight of an overlay manager. b) The clien…

13. Which of the following is true about normaly distributed returns a. The 20.

13. Which of the following is true about normaly distributed returns a. The 20. turn distribution can be summarized with f e oer two niinet of rea Over 90% of realized returns are…

13. Which of the following is true about not distributed returns? a. The return

13. Which of the following is true about not distributed returns? a. The return distribution can b, 20 two numbers. be summarized with Over 90% of realized returns are within one …

13. Which of the following statements is true? a. Bonds vary directly with inter

13. Which of the following statements is true? a. Bonds vary directly with interest rates. b. Bond volatility varies inversely with maturity c. Low coupon bonds have lower bond vo…

13. Which one of the following is false? a. In a world where interest is not tax

13. Which one of the following is false? a. In a world where interest is not tax deductible, a firm’s capital structure is irrelevant meaning that WACC is constant for all levels …

13. Which one of the following statements correctly applies to U.S. industrial f

13. Which one of the following statements correctly applies to U.S. industrial firms based on the period of 1984 -2004? A. Earnings growth rates tend to lag dividend growth rates.…

13. You are a financial analyst for the Little Company. The director of capital

13. You are a financial analyst for the Little Company. The director of capital budgeting has asked you to analyze two proposed capital investments, Projects X and Y. Each project…

13. You are solvent if your ____ 14. If your statement of income and expenditure

13. You are solvent if your ____ 14. If your statement of income and expenditures shows a deficit, you may have a. increased your debts. b. increased your assets. c. added to savi…