Financial literacy

Which of the following securities could NOT have any benefits for diversificatio

Which of the following securities could NOT have any benefits for diversification with your investment portfolio? Treasury bills with a correlation coefficient of 0.0 with your po…

Which of the following securities has the largest present value? Assume in all c

Which of the following securities has the largest present value? Assume in all cases that the annual interest rate is 8 percent and that there are no taxes. a. A security that pay…

Which of the following securities should sell at a greater price? A 10-year Cana

Which of the following securities should sell at a greater price? A 10-year Canada bond with a 9 percent coupon rate versus a 10-year Canada bond with a 10 percent coupon rate B t…

Which of the following securities would tend to offer the lowest yield? Which of

Which of the following securities would tend to offer the lowest yield? Which of the following bonds grades would a U.S. bank normally be allowed to choose for their investment po…

Which of the following should be considered when a company estimates the cash fl

Which of the following should be considered when a company estimates the cash flows used to analyze a proposed project? Since the firm's director of capital budgeting spent some o…

Which of the following should be considered when selecting an enterprise system

Which of the following should be considered when selecting an enterprise system vendor? (select all that apply) The financial strength of the software supplier Availability of mai…

Which of the following should be included as relevant cash flows in the analysis

Which of the following should be included as relevant cash flows in the analysis of a new product? I. reduction in sales for a current product once the new produce is introduced I…

Which of the following should be included as relevant cash flows in the analysis

Which of the following should be included as relevant cash flows in the analysis of a new product? I. reduction in sales for a current product once the new produce is introduced I…

Which of the following should be included in the analysis of a new product? I. m

Which of the following should be included in the analysis of a new product? I. money already spent for research and development of the new product II. reduction in sales for a cur…

Which of the following should be included in the capital budgeting decision Sele

Which of the following should be included in the capital budgeting decision Select one: A. Sunk costs B. Opportunity costs C. Relevant externalities D. #2 and #3 should be include…

Which of the following should be incorporated into capital budgeting decisions?

Which of the following should be incorporated into capital budgeting decisions? Select one O a. Sunk costs O b. Opportunity costs O c. Relevant externalities O d. Answers b and c …

Which of the following should not influence a firm’s dividendpolicy decision?(Po

Which of the following should not influence a firm’s dividendpolicy decision?(Points: 4)       The firm’s ability to accelerate or delayinvestment projects.        A strong prefer…

Which of the following situations has a real option embedded within it? Which of

Which of the following situations has a real option embedded within it? Which of the following is an example of a sunk cost? Having a bond that pays coupons throughout its life Ha…

Which of the following situations might convince an employer to choose a nonqual

Which of the following situations might convince an employer to choose a nonqualified retirement plan over a qualified profit-sharing plan? The employer, a closely held C Corporat…

Which of the following sources of investment income has the highest marginal tax

Which of the following sources of investment income has the highest marginal tax rate for an individual?Answer Dividends Interest from a savings account Long-term capital gains In…

Which of the following statement about payback period analysis is NOT correct? a

Which of the following statement about payback period analysis is NOT correct? a) Payback period is defined as the number of years necessary for cash flows to recover the original…

Which of the following statement completions is CORRECT? If the yield curve is u

Which of the following statement completions is CORRECT? If the yield curve is upward sloping, then the marketable securities held in a firm's portfolio, assumed to be held for em…

Which of the following statement completions is correct? If investors prefer div

Which of the following statement completions is correct? If investors prefer dividends to capital gains, then A. The equilibrium return, rs, will not be affected by a change in di…

Which of the following statement completions is false? For a profitable firm, wh

Which of the following statement completions is false? For a profitable firm, when MACRS accelerated depreciation is compared to straight-line depreciation, MACRS accelerated allo…

Which of the following statement is CORRECT? If a coupon bond is selling at par,

Which of the following statement is CORRECT? If a coupon bond is selling at par, its current yield equals its yield to maturity If a coupon bond is selling at a discount, its pric…

Which of the following statement is FALSE? A. As interest rate increases, presen

Which of the following statement is FALSE?    A.   As interest rate increases, present value needed for fixed future investment goal decreases.    B.   Interest earned on both the…

Which of the following statement is FALSE? A. Dividend valuation with a constant

Which of the following statement is FALSE? A. Dividend valuation with a constant growth model is similar to a growing perpetuity problem. B. Yield to maturity reflects the current…

Which of the following statement is FALSE? A. If coupon rate is lower than its y

Which of the following statement is FALSE? A.            If coupon rate is lower than its yield to maturity, then the bond would sell at a discount. <true B.            Stock v…

Which of the following statement is correct? Corporation face few regulation and

Which of the following statement is correct? Corporation face few regulation and more favorable tax treatment than do sole proprietorships and partnerships. Managers who face the …

Which of the following statement is wrong ? Financial flexibility is higher for

Which of the following statement is wrong? Financial flexibility is higher for firms with high operating ROA. Higher leverage is associated with higher borrowing cost. Preferred s…

Which of the following statement is wrong ? Financial flexibility is higher for

Which of the following statement is wrong? Financial flexibility is higher for firms with high operating ROA. Higher leverage is associated with higher borrowing cost. Preferred s…

Which of the following statements (if any) is (are) true concerning companies th

Which of the following statements (if any) is (are) true concerning companies that do not pay dividends? The cost of equity capital can be estimated using the Capital Asset Pricin…

Which of the following statements Is COHRECT? One defect of the IRR method is th

Which of the following statements Is COHRECT? One defect of the IRR method is that It does not take account of cash flows over a project's full life. One defect of the IRR method …

Which of the following statements about a flexible budget is most correct? a. A

Which of the following statements about a flexible budget is most correct? a. A flexible budget uses realized (actual) prices along with all other original (simple) budget assumpt…

Which of the following statements about annuities are true? Check all that apply

Which of the following statements about annuities are true? Check all that apply. An annuity due earns more interest than an ordinary annuity of equal time. An annuity due is an a…

Which of the following statements about annuities are true? Check all that apply

Which of the following statements about annuities are true? Check all that apply When equal payments are made at the beginning of each period for a certain time period, they are t…

Which of the following statements about annuities are true? Check all that apply

Which of the following statements about annuities are true? Check all that apply. An annuity due earns more interest than an ordinary annuity of equal time. A perpetuity is a cons…

Which of the following statements about annuities are true? Check all that apply

Which of the following statements about annuities are true? Check all that apply. When equal payments are made at the end of each period for a certain time period, they are treate…

Which of the following statements about beta and risk is correct? A stock\'s bet

Which of the following statements about beta and risk is correct? A stock's beta is less relevant as a measure of risk to an investor with a well-diversified portfolio than to an …

Which of the following statements about beta is correct? a. Firms with greater s

Which of the following statements about beta is correct? a. Firms with greater systematic risk volatilities than the market have betas that are less than 1.0, and firms with small…

Which of the following statements about bonds is true? a. Bond prices move in th

Which of the following statements about bonds is true?           a.   Bond prices move in the same direction as market interest rates.           b.   If market interest rates chan…

Which of the following statements about capital budgeting decision rules is corr

Which of the following statements about capital budgeting decision rules is correct? When evaluating mutually exclusive projects, NPV and IRR will always provide identical accept/…

Which of the following statements about capital budgeting methodology are true?

Which of the following statements about capital budgeting methodology are true? (1) Projects with a net present value greater than or equal to zero are generally considered accept…

Which of the following statements about capital investment project scoring is mo

Which of the following statements about capital investment project scoring is most correct? Project scoring examines the facilities of an organization to determine whether or not …

Which of the following statements about combined (operating & financial) leverag

Which of the following statements about combined (operating & financial) leverage is true? a.If a firm employs both operating and financial leverage, any percent change in sal…

Which of the following statements about common stock is incorrect? O A. The pree

Which of the following statements about common stock is incorrect? O A. The preemptive right gives current stockholders the right to purchase any new shares issued by the company.…

Which of the following statements about constant growth model is NOT CORRECT? Th

Which of the following statements about constant growth model is NOT CORRECT? The constant growth model assumes that the firm's dividends will grow forever at a constant rate. Sha…

Which of the following statements about conventional mortgages is true? A. They

Which of the following statements about conventional mortgages is true? A. They are insured by the government. B. The borrower may have to pay for mortgage insurance in order to b…

Which of the following statements about debt management ratios is false? O A. Th

Which of the following statements about debt management ratios is false? O A. There are two types of debt management ratios: capitalization ratios and coverage ratios. O B. Capita…

Which of the following statements about defined contribution plans, if any, is i

Which of the following statements about defined contribution plans, if any, is incorrect? A. A defined contribution plan places the risk of poor pension portfolio performance on t…

Which of the following statements about direct claims is most accurate? Direct c

Which of the following statements about direct claims is most accurate? Direct claims should be written using the indirect pattern. Direct claims require persuasion. When you have…

Which of the following statements about dividend is NOT true? _____ Bird-in-the-

Which of the following statements about dividend is NOT true? _____ Bird-in-the-hand theory says that investors think dividends are less risky than potential future capital gains,…

Which of the following statements about dividend is NOT true? _____ Bird-in-the-

Which of the following statements about dividend is NOT true? _____ Bird-in-the-hand theory says that investors think dividends are less risky than potential future capital gains,…

Which of the following statements about dividend policies is CORRECT? Why? a. Mo

Which of the following statements about dividend policies is CORRECT? Why? a. Modigliani and Miller argue that investors prefer dividends to capital gains because dividends are mo…

Which of the following statements about dividend policies is correct? 1. Compani

Which of the following statements about dividend policies is correct? 1. Companies pay high dividends because it reduces taxable income 2. One reason that companies tend to avoid …