Financial literacy

Which of the following is the most likely action of investors with representativ

Which of the following is the most likely action of investors with representativeness bias? They hold onto loser stocks for too long to avoid regret. They infer that good companie…

Which of the following is the overarching principal that a financial manager sho

Which of the following is the overarching principal that a financial manager should follow when making decisions? Decisions should generate the greatest benefits for the firm. Dec…

Which of the following is the overriding goal of corporate financial managers? A

Which of the following is the overriding goal of corporate financial managers? A. maximizing the price per share of the common stock B. maximize profits C. maximize sales D. maxim…

Which of the following is the proper way to adjust the cost of debt to estimate

Which of the following is the proper way to adjust the cost of debt to estimate the after-tax cost of debt? a. Rd/(1+Tc) b. Rd/((1-Tc) c. Rdx(1-Tc) d. Rdx(1xTc) The formula for th…

Which of the following is the term for a situation in which firms limit their ou

Which of the following is the term for a situation in which firms limit their output? A. market allocation B. bid rigging C. exclusive dealing arrangements D. manipulation of supp…

Which of the following is true about a servicing fee in a MPT security? A. This

Which of the following is true about a servicing fee in a MPT security? A. This fee provides compensation to the servicer for originating mortgages in the pool B. This is a one-ti…

Which of the following is true about adverse possession? 1 Once the time period

Which of the following is true about adverse possession? 1 Once the time period and requirements are met, title passes automatically and nothing else need be done for the property…

Which of the following is true about capital cost allowance (CCA)? ____ Since CC

Which of the following is true about capital cost allowance (CCA)? ____ Since CCA deduction is not a cash expense, it plays no role in capital budgeting The CCA method uses a spec…

Which of the following is true about easements? The easement holder owns the lan

Which of the following is true about easements? The easement holder owns the land It has no right to possession, only non-exclusive use of the land It can be defined is the exact …

Which of the following is true about exclusively federal area of government regu

Which of the following is true about exclusively federal area of government regulation? ----------------------------- The _____ function of an administrative agency is accomplishe…

Which of the following is true about finding the present value of cash flows? Fi

Which of the following is true about finding the present value of cash flows? Finding present value tells you what a cash flow will be worth in future years. Finding the present v…

Which of the following is true about securitization? A. It is a method of financ

Which of the following is true about securitization? A. It is a method of financing assets, in which rather than selling those assets "whole," the assets are combined into a pool,…

Which of the following is true about the 1933 and 1934 securities acts? The 1933

Which of the following is true about the 1933 and 1934 securities acts? The 1933 act covers the initial issuance and subsequent trading of stocks and the 1934 act covers the initi…

Which of the following is true about the differences between financial and manag

Which of the following is true about the differences between financial and managerial accounting? Question 1 options: Managerial accounting presents less non-monetary information …

Which of the following is true about the differences between financial and manag

Which of the following is true about the differences between financial and managerial accounting? A. Managerial accounting presents less non-monetary information than financial ac…

Which of the following is true about the dividend relevance theory? a. If invest

Which of the following is true about the dividend relevance theory? a. If investors prefer capital gain on their investment, then the tax effect of dividend b. If investors prefer…

Which of the following is true according to Theodore Levitt? R&D is into existin

Which of the following is true according to Theodore Levitt? R&D is into existing products insures growth. Sustained growth depends on how broadly you define your business. In…

Which of the following is true concerning collateralized mortgage obligations (C

Which of the following is true concerning collateralized mortgage obligations (CMO) ahead of the 2008-09 U.S. financial crisis? Select one: A. All subprime mortgage bonds were poo…

Which of the following is true of a general partner of a limited liability partn

Which of the following is true of a general partner of a limited liability partnership (LLP)? a. A general partner of a limited liability partnership (LLP) is liable only to the e…

Which of the following is true of an aggressive funding strategy of a firm? A. U

Which of the following is true of an aggressive funding strategy of a firm? A. Under an aggressive funding strategy, a firm funds both its seasonal and its permanent requirements …

Which of the following is true of an industry’s Herfindahl-Hirschmann Index (HHI

Which of the following is true of an industry’s Herfindahl-Hirschmann Index (HHI)? A low score indicates a monopolistic market It is used to determine the amount of collusion in a…

Which of the following is true of effecient-market hypothesis? A. Since stocks a

Which of the following is true of effecient-market hypothesis? A. Since stocks are fully and fairly priced, it follows that investors should not wast their time trying to find and…

Which of the following is true of property taxes? (1) Property taxes are not ded

Which of the following is true of property taxes? (1) Property taxes are not deductible by the trust or estate if imposed on personal property (2) Property taxes are deducted in c…

Which of the following is true of the degree of financial leverage of a firm? a.

Which of the following is true of the degree of financial leverage of a firm? a. The degree of financial leverage affects the earnings before interest and taxes of the firm. b. Th…

Which of the following is true of the degree of total leverage (DTL)? It is the

Which of the following is true of the degree of total leverage (DTL)? It is the level of EBIT at which EPS equals zero. It is the percentage change in EPS that results from a give…

Which of the following is true of the market segmentation theory? a. According t

Which of the following is true of the market segmentation theory? a. According to the market segmentation theory, the slope of the yield curve depends on supply/demand conditions …

Which of the following is true of the primary market? A. It is an organized mark

Which of the following is true of the primary market? A. It is an organized market in which all financial derivatives are traded B. It is regulated by The Sarbanes-Oxley Act C. It…

Which of the following is true of the relationship between the value of the opti

Which of the following is true of the relationship between the value of the optimal integer solution and the value of the optimal solution to the LP Relaxation? a. For any linear …

Which of the following is true regarding 401(k)s? Answer Your employer may match

Which of the following is true regarding 401(k)s? Answer Your employer may match your contributions The plan is guaranteed by your employer Withdrawals are tax free They grow at a…

Which of the following is true regarding CAMELS and the Basel Accords? CAMELS ar

Which of the following is true regarding CAMELS and the Basel Accords? CAMELS are a set of regulatory rules to evaluate the soundness, health, and riskiness of FIs. The purpose of…

Which of the following is true regarding CAMELS and the Basel Accords? a. CAMELS

Which of the following is true regarding CAMELS and the Basel Accords?        a. CAMELS are a set of regulatory rules to evaluate the soundness, health, and riskiness of FIs. b. T…

Which of the following is true regarding The Information Effect of dividend poli

Which of the following is true regarding The Information Effect of dividend policies? Increases in dividends are seen as negative signals concerning the firm's expected future cas…

Which of the following is true regarding a cutoff rate? Choose the closest answe

Which of the following is true regarding a cutoff rate? Choose the closest answer:          a. The cutoff rate is be determined by dividing the Beta with the difference between av…

Which of the following is true regarding commonstock? a. Dividends, unlike inter

Which of the following is true regarding commonstock? a. Dividends, unlike interest payments, are not taxdeductible. b. Common stock, unlike bond principal, does not mature. c. Co…

Which of the following is true regarding span of control? The \"ideal\" span of

Which of the following is true regarding span of control? The "ideal" span of control is 5 to 8 persons. There is no "ideal" span of control. The proper span is never more than 15…

Which of the following is true regarding the Current Rate method? A.It is used b

Which of the following is true regarding the Current Rate method? A.It is used by a multinational corporation whose affiliate is operating in a hyperinflationary country. B.The cu…

Which of the following is true regarding the UNLEVERAGED FIRM? O Firms use inter

Which of the following is true regarding the UNLEVERAGED FIRM? O Firms use internally generated funds first, because there are no flotation costs or negative signals associated wi…

Which of the following is true regarding the WACC? a. The WACC is equal to the f

Which of the following is true regarding the WACC? a. The WACC is equal to the firm s embedded debt cost times (1 the tax rate). b. The WACC can be estimated by taking the simple …

Which of the following is true regarding the income based repayment plan (IBR) f

Which of the following is true regarding the income based repayment plan (IBR) for federal government student loans? You always have the option to choose IBR and with it, no matte…

Which of the following is true regarding the recent financial crisis? a. FIs’ ne

Which of the following is true regarding the recent financial crisis?   a. FIs’ new policy of “originate to distribute” caused banks to increase their lending standards for issuin…

Which of the following is true statement regarding the taxation of interest and

Which of the following is true statement regarding the taxation of interest and dividends on a fiduciary income tax return Only interest and dividends not treated as distributed t…

Which of the following is true when there is optimal provision of a public good?

Which of the following is true when there is optimal provision of a public good? a. marginal cost = marginal rate of substitution for each consumer b. total costs = total benefits…

Which of the following is true: A. IRR is superior to NPV for choosing between d

Which of the following is true: A. IRR is superior to NPV for choosing between different projects B. The NPV decision rule says to accept an investment of the NPV is positive C. P…

Which of the following is true: a. Sunk costs are irrelevant to capital budgetin

Which of the following is true: a. Sunk costs are irrelevant to capital budgeting decisionmaking. b. Opportunity costs are relevant to capital budgetingdecision making. c. Overhea…

Which of the following is true? A) A random walk for stock price changes is inco

Which of the following is true? A) A random walk for stock price changes is inconsistent with observed patterns in price changes. B) If the stock market follows a random walk, pri…

Which of the following is true? A) A random walk for stock price changes is inco

Which of the following is true? A) A random walk for stock price changes is inconsistent with observed patterns in price changes. B) If the stock market follows a random walk, pri…

Which of the following is true? A. The process of pooling mortgages or other typ

Which of the following is true? A. The process of pooling mortgages or other types of loans and then selling claims or securities against that pool in a secondary market is called…

Which of the following is true? Explain why. 1. Suppose financial institutions w

Which of the following is true? Explain why. 1. Suppose financial institutions were required by law to make long term, fixed income rate mortgages, but at the same time, they were…

Which of the following is true? OOne benefit of being a publicly traded firm is

Which of the following is true? OOne benefit of being a publicly traded firm is that share price is easily observed so measuring firm performance is easy. Equity issuances are alw…

Which of the following is true? explain why. 1. Bonds C and Z both have a $1,000

Which of the following is true? explain why. 1. Bonds C and Z both have a $1,000 par value and 10 years to maturity. They have the same default risk, and they both have a yield of…