Financial literacy

Which of the following is a problem associated with bankruptcy? A. It is embarra

Which of the following is a problem associated with bankruptcy? A. It is embarrasing for managers to work at a firm that fails. B. Bankruptcy shifts assets to more highly valued u…

Which of the following is a reason for managers to analyze an industry? To deter

Which of the following is a reason for managers to analyze an industry? To determine the Five Forces factors To determine which products or services to market To justify decisions…

Which of the following is a reason for managers to analyze an industry? To estab

Which of the following is a reason for managers to analyze an industry? To establish short-range objectives To be able to understand reasons for market failure To determine if a p…

Which of the following is a taxable capital gain for taxpayer, Carol Williams fo

Which of the following is a taxable capital gain for taxpayer, Carol Williams for 2015? A) On March 15, 2015, she sold $3,000 of stock in Google she purchased three years ago for …

Which of the following is a true regarding the appropriate tax rate to be used i

Which of the following is a true regarding the appropriate tax rate to be used in the WACC? A.One would use the marginal tax rate that the firm paid the prior year. B.One would us…

Which of the following is a true statement regarding the appropriate tax rate to

Which of the following is a true statement regarding the appropriate tax rate to be used in the WACC? A.) One would use the marginal tax rate that the firm paid the prior year. B.…

Which of the following is an advantage of being a public company? A. Focus on sh

Which of the following is an advantage of being a public company? A. Focus on short-term profits and performance results B. Access to long-term capital C. Guaranteed operating con…

Which of the following is an advantage of convertible bonds? Investors can conve

Which of the following is an advantage of convertible bonds? Investors can convert the bonds into higher coupon rate bonds. Investors are paid a penalty on the conversion of the b…

Which of the following is an advantage of utilizing short-termdebt to finance th

Which of the following is an advantage of utilizing short-termdebt to finance the acquisition of short-term assets? a. Interest rates on short-term debt are usually lower thaninte…

Which of the following is an assumptions of the Black-Scholes-Merton (BSM) optio

Which of the following is an assumptions of the Black-Scholes-Merton (BSM) option-pricing model? The distribution of the underlying stock price is normal. the risk free rate is po…

Which of the following is an assumptions of the Black-Scholes-Merton (BSM) optio

Which of the following is an assumptions of the Black-Scholes-Merton (BSM) option-pricing model? The distribution of the underlying stock price is normal. Transaction costs are ze…

Which of the following is an example of a capital market instrument? a. Commerci

Which of the following is an example of a capital market instrument? a. Commercial paper. b. U.S. Treasury bills. c. Banker's acceptances. d. Preferred stock. e. Money market mutu…

Which of the following is an example of a growth option? a) Expansion of an exis

Which of the following is an example of a growth option? a) Expansion of an existing product line b) Temporary suspension of operations c) Wait to start a project until more infor…

Which of the following is an example of a use of funds for the bank? A borrower

Which of the following is an example of a use of funds for the bank? A borrower repays $1500 of a loan they have received The bank sells $5,000,000 of T-Bills None of the response…

Which of the following is an example of financial capital? a. a delivery truck u

Which of the following is an example of financial capital? a. a delivery truck used by Federal Express b. a desk in a classroom c. a share of stock issued by IBM d. an electric pl…

Which of the following is an indirect cost of financial distress? Firm Y is spen

Which of the following is an indirect cost of financial distress? Firm Y is spending $500,000 on hiring accountants to support their case in the bankruptcy court. Firm X is unable…

Which of the following is an instrument where you are lending your money to a ba

Which of the following is an instrument where you are lending your money to a bank for a specific period of time (such as six months or a year)? Certificate of Deposit Savings Bon…

Which of the following is closest to the annualized rate of return on a stock pu

Which of the following is closest to the annualized rate of return on a stock purchased for $6,000 and sold for $6,100 ninety (90) days later? 100% 1% 7% Very close to 0% 61% At a…

Which of the following is correct? A) A portfolio with a large number of randoml

Which of the following is correct? A) A portfolio with a large number of randomly selected stocks would have less market risk than a single stock that has a beta of 0.5 B) If a st…

Which of the following is correct? A. All of the answers are correct. ??.A fixed

Which of the following is correct? A. All of the answers are correct. ??.A fixed debt level policy indicates that the firm intends to keep the same dollar amount of debt on the ba…

Which of the following is correct? More than one may apply. 1.You close out a lo

Which of the following is correct? More than one may apply. 1.You close out a long future position by buying a short future. 2. The owner of a long future position has the right, …

Which of the following is correct? The periodic rate cannot be the same as the e

Which of the following is correct? The periodic rate cannot be the same as the effective annual rate The periodic rate cannot equal the nominal rate The periodic rate can equal th…

Which of the following is correct? a) A reduction in inventories held would have

Which of the following is correct? a) A reduction in inventories held would have no effect on the current ratio. b) An increase in inventories would have no effect on the current …

Which of the following is correct? a. Aggressive accounting policies (choices) l

Which of the following is correct?      a. Aggressive accounting policies (choices) lead to lower earnings and higher assets b. The independent auditor’s opinion and statement on …

Which of the following is equal to the market risk, beta, of a security? ? The c

Which of the following is equal to the market risk, beta, of a security? ? The covariance between the security's return and the market return divided by the variance of the market…

Which of the following is false concerning \"topside\" journal entries used to c

Which of the following is false concerning "topside" journal entries used to commit financial statement fraud? Question 13 options: All of the above are false Entries are recorded…

Which of the following is false regarding investment decision-making criterion?

Which of the following is false regarding investment decision-making criterion? a. The profitability index favors small projects and may lead to the wrong decision when desciding …

Which of the following is generally NOT TRUE of stock repurchase plans? About 30

Which of the following is generally NOT TRUE of stock repurchase plans? About 30% of announced stock repurchase plans are fully completed. About 35% of announced stock repurchase …

Which of the following is inconsistent with efficient securities markets? Answer

Which of the following is inconsistent with efficient securities markets? Answer a. stock prices change rapidly in response to new information b. analysis of financial data will l…

Which of the following is incorrect? a)The forecaster should be able to defend w

Which of the following is incorrect? a)The forecaster should be able to defend why a particular model or procedure has been chosen. b)Forecast errors should be discussed in an obj…

Which of the following is incorrect? a. Negotiable certificates of deposit are m

Which of the following is incorrect? a. Negotiable certificates of deposit are marketable receiptsfor funds that have been deposited in a bank for a fixedperiod. b. Repurchase agr…

Which of the following is irrelevant to the outcome strategies associated with e

Which of the following is irrelevant to the outcome strategies associated with estate planning? Whether assets are joint or separately owned The original cost Current fair market …

Which of the following is least accurate regarding the limitations of the Black-

Which of the following is least accurate regarding the limitations of the Black-Scholes-Merton (BSM) model? The BSM is not useful in providing market concensus on expected volatil…

Which of the following is likely to lead to an increase in the cost of funds? Qu

Which of the following is likely to lead to an increase in the cost of funds? Question 15 options: 1) Firms' production opportunities decline, leading to a decline in the demand f…

Which of the following is most accurate regarding the advantages and disadvantag

Which of the following is most accurate regarding the advantages and disadvantages of the methods used to compute a company’s cost of equity? Select one: a. II. A disadvantage of …

Which of the following is most correct? a. When the return on capital employed (

Which of the following is most correct? a. When the return on capital employed (ROCE) is less than the before tax cost of debt, a company can increase its ROE by trading out equit…

Which of the following is most likely occur as you add randomly selected stock t

Which of the following is most likely occur as you add randomly selected stock to your portfolio, which currently consists of 3 average stocks? The diversifiable risk of your port…

Which of the following is most likely to have the greatest amount of default ris

Which of the following is most likely to have the greatest amount of default risk? A corporate subordinated debenture with three years to maturity and a high coupon rate. A corpor…

Which of the following is most likely to occur as you add randomly selected stoc

Which of the following is most likely to occur as you add randomly selected stocks to your portfolio, which currently consists of 3 average stocks? A. The diversifiable risk of yo…

Which of the following is most likely to occur if a firm over-invests in net wor

Which of the following is most likely to occur if a firm over-invests in net working capital? A) the quick ratio will be lower than it should be B) the current ratio will be lower…

Which of the following is most likely to occur if multiple-media ownership is al

Which of the following is most likely to occur if multiple-media ownership is allowed? Centralized news services will replace local news coverage. News broadcasts will become more…

Which of the following is not a characteristic of a Board of Directors that usua

Which of the following is not a characteristic of a Board of Directors that usually leads to effective corporate governance.    Board members are compensated appropriately (not to…

Which of the following is not a characteristic of a moral standard: a) norm of c

Which of the following is not a characteristic of a moral standard: a) norm of conduct in polite society; b) soundness depends on reasons that support it; c) it takes priority ove…

Which of the following is not a characteristic of a moral standard: norm of cond

Which of the following is not a characteristic of a moral standard: norm of conduct in polite society; soundness depends on reasons that support it; it takes priority over other s…

Which of the following is not a characteristic of hedge funds? Select one: A. Th

Which of the following is not a characteristic of hedge funds? Select one: A. They are generally unregulated and normally restricted to high net worth individuals B. They are not …

Which of the following is not a characteristic of modified accrual accounting? O

Which of the following is not a characteristic of modified accrual accounting? Oa Revenues are recognized when they are measurable and available. O b. Long term assets do not appe…

Which of the following is not a contributing factor in making the choice of a di

Which of the following is not a contributing factor in making the choice of a discount rate a critical issue in selecting among alternative investment opportunities? Which of the …

Which of the following is not a corrective action taken by regulators when a ban

Which of the following is not a corrective action taken by regulators when a bank is identified as a problem bank? Answer Regulators may examine such banks infrequently yet thorou…

Which of the following is not a determinant of the risk of a portfolio? A) the a

Which of the following is not a determinant of the risk of a portfolio? A) the amount of money invested in each asset in the portfolio B) the degree to which the returns of the as…

Which of the following is not a function of decomposition? (Points : 5) Permit d

Which of the following is not a function of decomposition? (Points : 5) Permit different parts of the system to be built at the same time by the same person. Allow attention to be…