Financial literacy

Which of the following statements is NOT CORRECT? The expected return on a corpo

Which of the following statements is NOT CORRECT? The expected return on a corporate bond must be less than its promised return if the probability of default is greater than zero.…

Which of the following statements is NOT CORRECT? When a corporation\'s shares a

Which of the following statements is NOT CORRECT? When a corporation's shares are owned by a few individuals, we say that the firm is "closely, or privately, held." "Going public"…

Which of the following statements is NOT CORRECT? a. A company may hold a relati

Which of the following statements is NOT CORRECT? a. A company may hold a relatively large amount of cash and marketable securities if it is uncertain about its volume of sales, p…

Which of the following statements is NOT CORRECT? a. A company may hold a relati

Which of the following statements is NOT CORRECT? a. A company may hold a relatively large amount of cash and marketable securities if it is uncertain about its volume of sales, p…

Which of the following statements is NOT CORRECT? a. Any bond sold outside the c

Which of the following statements is NOT CORRECT? a. Any bond sold outside the country of the borrower is called an international bond. b. Foreign bonds and Eurobonds are two impo…

Which of the following statements is NOT CORRECT? a. Commercial paper can be iss

Which of the following statements is NOT CORRECT? a. Commercial paper can be issued by virtually any firm so long as it is willing to pay the going interest rate. b. The risk to a…

Which of the following statements is NOT CORRECT? a. Investors expect higher ret

Which of the following statements is NOT CORRECT? a. Investors expect higher return by taking greater risk; here risk means market risk. b. Any change in the beta is likely to aff…

Which of the following statements is NOT CORRECT? a. When a corporation\'s share

Which of the following statements is NOT CORRECT? a. When a corporation's shares are owned by a few individuals and are not traded on public markets, we say that the firm is "clos…

Which of the following statements is NOT correct? A.) The corporate valuation mo

Which of the following statements is NOT correct? A.) The corporate valuation model can be used both for companies that pay dividends and those that do not pay dividends. B.) The …

Which of the following statements is NOT correct? Select one a A 15-year mortgag

Which of the following statements is NOT correct? Select one a A 15-year mortgage will have a larger monthly payment that an otherwise similar 30-year mortgage b. An annuity due w…

Which of the following statements is NOT correct? a.Horizontal mergers combine f

Which of the following statements is NOT correct? a.Horizontal mergers combine firms in the same line of business b. The management of a target firm resists a takeover attempt in …

Which of the following statements is TRUE? A) The time line for a lender of $1,0

Which of the following statements is TRUE? A) The time line for a lender of $1,000 for one year at a rate of 8% compounded annually would include a positive cash flow of $1,080 at…

Which of the following statements is TRUE? A) With simple interest, interest is

Which of the following statements is TRUE? A) With simple interest, interest is earned each period on the original starting amount as well as on any interest earned in earlier per…

Which of the following statements is TRUE? A) You can always earn a high rate of

Which of the following statements is TRUE? A) You can always earn a high rate of return by purchasing zero-coupon bonds at a premium B) Lenders want to protect their purchasing po…

Which of the following statements is TRUE? A) for all investments regardless of

Which of the following statements is TRUE? A) for all investments regardless of scale, timing and risk to compare use IRR, invesmens oppontunities we can B) when projects are not …

Which of the following statements is TRUE? Choose one answer. A. By INCREASING t

Which of the following statements is TRUE? Choose one answer. A. By INCREASING the number of payments per year, you REDUCE your total cash outflow but INCREASE your effective borr…

Which of the following statements is an incorrect statement about an advantage o

Which of the following statements is an incorrect statement about an advantage of the use of the "qualifying-interests:" GRATs, GRUTs, PRTs, and QPRTs? a. a GRAT or GRUT can be us…

Which of the following statements is correct ? A subsidiary’s financial structur

Which of the following statements is correct? A subsidiary’s financial structure is of little importance to the parent firm if the parent is not responsible for the financial obli…

Which of the following statements is correct a/) When a company - specific rish

Which of the following statements is correct a/) When a company - specific rish has been diversified away, the inherent risk that remains is market risk, which is constant for sto…

Which of the following statements is correct about the relationship between tech

Which of the following statements is correct about the relationship between technical performance and Earned Value Management (EVM)? A. Technical performance measures (TPMs) and E…

Which of the following statements is correct when comparing the differences betw

Which of the following statements is correct when comparing the differences between an interest rate swap and a currency swap? Question options: 1) 2) 3) 4) 5) 1) At maturity, the…

Which of the following statements is correct? (Points : 5) The NPV, IRR, MIRR, a

Which of the following statements is correct? (Points : 5) The NPV, IRR, MIRR, and discounted payback (using a payback requirement of 3 years or less) methods always lead to the s…

Which of the following statements is correct? (Points : 5) a. Simple rates can\'

Which of the following statements is correct? (Points : 5) a.Simple rates can't be used in present value or future value calculations because they fail to account for compounding …

Which of the following statements is correct? (a) An option\'s value is determin

Which of the following statements is correct? (a) An option's value is determined by its exercise value, which is the market price of the stock less its striking price. Thus, an o…

Which of the following statements is correct? 1) The clientele effect is the bes

Which of the following statements is correct? 1) The clientele effect is the best explanation for why companies tend to vary their dividend payments from quarter to quarter. 2) If…

Which of the following statements is correct? A If a firm\'s stockholders are we

Which of the following statements is correct?    A If a firm's stockholders are well diversified, we know from theory and from studies of market behavior that corporate risk is no…

Which of the following statements is correct? A common law employee who is age 5

Which of the following statements is correct? A common law employee who is age 55 can receive a distribution after becoming disabled even it he or she keeps working B.If a physicl…

Which of the following statements is correct? A) Portfolio diversification reduc

Which of the following statements is correct? A) Portfolio diversification reduces the variability of the returns on the individual stocks held in a portfolio. B) Portfolio A has …

Which of the following statements is correct? A. A firm\'s WACC should decrease

Which of the following statements is correct? A. A firm's WACC should decrease if its tax rate increases, but the yield to maturity of its noncallable bonds remains the same and a…

Which of the following statements is correct? A. In a best-efforts IPO, the unde

Which of the following statements is correct? A. In a best-efforts IPO, the underwriter guarantees that all stock will be sold. B. The main advantages for a firm in going public a…

Which of the following statements is correct? A. Long term bonds have less inter

Which of the following statements is correct? A. Long term bonds have less interest rate price but more reinvestment rate risk than short-term bonds B. Long term bonds have less i…

Which of the following statements is correct? A. Semistrong-form market efficien

Which of the following statements is correct? A. Semistrong-form market efficiency implies that as soon as any public or private information comes into being it is incorporated in…

Which of the following statements is correct? A. Since depreciation is a cash ex

Which of the following statements is correct? A. Since depreciation is a cash expense, the faster an asset is depreciated, the lower the projected NPV from investing in the asset.…

Which of the following statements is correct? A. Since the money is readily avai

Which of the following statements is correct? A. Since the money is readily available, Retained Earnings is "essentially free"& much less expensive than the cost of debt finan…

Which of the following statements is correct? A. The constant growth DDM model c

Which of the following statements is correct? A. The constant growth DDM model can be used to value a stock only if the stock's dividends are expected to grow forever at a constan…

Which of the following statements is correct? A. The first pass using the projec

Which of the following statements is correct? A. The first pass using the projected balance sheet method determines the financing feedback effects and determines how much in addit…

Which of the following statements is correct? A. The price of a discount bond wi

Which of the following statements is correct? A. The price of a discount bond will increase over time, assuming that the bond's yield to maturity remains constant. B. For a given …

Which of the following statements is correct? A. The standard deviation of the p

Which of the following statements is correct? A. The standard deviation of the portfolio is more than the weighted average of the standard deviations of the assets in the portfoli…

Which of the following statements is correct? A. The use of debt financing will

Which of the following statements is correct? A. The use of debt financing will tend to lower the basic earning power ratio, other things held constant. B. A firm that employs fin…

Which of the following statements is correct? A.) The MIRR and NPV decision crit

Which of the following statements is correct? A.) The MIRR and NPV decision criteria can never conflict. B.) The IRR method can never be subject to the multiple IRR problem, while…

Which of the following statements is correct? AS long as managers stay within th

Which of the following statements is correct? AS long as managers stay within the law, there is way te-fore ond stockholders best interests b. Becaune of their simplitied organica…

Which of the following statements is correct? All else the same, an investor wil

Which of the following statements is correct? All else the same, an investor will require less return to invest in a callable bond than one that is not callable. All else the same…

Which of the following statements is correct? An IPO is an example of a primary

Which of the following statements is correct? An IPO is an example of a primary market transaction. Money markets are subject to wider price fluctuations and are therefore more ri…

Which of the following statements is correct? Answer One advantage of dividend r

Which of the following statements is correct? Answer One advantage of dividend reinvestment plans is that they enable investors to avoid paying taxes on the dividends they receive…

Which of the following statements is correct? Answer Under the tax laws as they

Which of the following statements is correct? Answer Under the tax laws as they existed in 2008, a dollar received for repurchased stock must be taxed at the same rate as a dollar…

Which of the following statements is correct? Answer Under the tax laws as they

Which of the following statements is correct? Answer Under the tax laws as they existed in 2008, a dollar received for repurchased stock must be taxed at the same rate as a dollar…

Which of the following statements is correct? Assume that the project being cons

Which of the following statements is correct? Assume that the project being considered has normal cash flows, with one outflow followed by a series of inflows. A. A projects's NPV…

Which of the following statements is correct? Assume that the project being cons

Which of the following statements is correct? Assume that the project being considered has normal cash flows, with one outflow followed by a series of inflows. Select one: a. A pr…

Which of the following statements is correct? Assume that the project being cons

Which of the following statements is correct? Assume that the project being considered has normal cash flows, with one outflow followed by a series of inflows.   If Project A has …

Which of the following statements is correct? For the most part, our federal tax

Which of the following statements is correct? For the most part, our federal tax rates are progressive, because higher incomes are taxed at higher average rates. Bonds issued by a…