Financial literacy

Which one of the following is a bear call spread? buying a $30 call and selling

Which one of the following is a bear call spread? buying a $30 call and selling a $35 put selling a $30 call and buying a $35 put buying a $30 call and selling a $35 call on the s…

Which one of the following is a correct ranking of securities based on their vol

Which one of the following is a correct ranking of securities based on their volatility over the period of 1926-2007? Rank from highest to lowest. A. Large company stocks, U.S Tre…

Which one of the following is a correct ranking of securities based on their vol

Which one of the following is a correct ranking of securities based on their volatility over the period of 1926 to 2014? Rank from highest to lowest. long-term government bonds, l…

Which one of the following is a correct ranking of securitites based on their vo

Which one of the following is a correct ranking of securitites based on their volatility over the period of 1926-2007? Rank from highest to lowest. A. large company stocks, U.S. t…

Which one of the following is a correct statement concerning risk premium? The g

Which one of the following is a correct statement concerning risk premium? The greater the volatility of returns, the greater the risk premium. The lower the volatility of returns…

Which one of the following is a logical assumption concerning capital structure

Which one of the following is a logical assumption concerning capital structure weights? A. The weights are constant over time. B. A new bond issue will reduce the weight of the f…

Which one of the following is a logical assumption concerning capital structure

Which one of the following is a logical assumption concerning capital structure weights? A. The weights are constant over time. B. A new bond issue will reduce the weight of the f…

Which one of the following is a speculative motive for holding cash? Select one:

Which one of the following is a speculative motive for holding cash? Select one: a. Contributing $1,000 to help fund medical care for an uninsured neighbor b. Buying extra invento…

Which one of the following is a suggested method of reducing a U.S. importer\'s

Which one of the following is a suggested method of reducing a U.S. importer's short-run exposure to exchange rate risk? Answer entering a forward exchange agreement timed to matc…

Which one of the following is an example of systematic risk? The Federal Reserve

Which one of the following is an example of systematic risk? The Federal Reserve unexpectedly announces an increase in target interest rates. A flood washes away a firm's warehous…

Which one of the following is an example of unsystematic risk? the inflation rat

Which one of the following is an example of unsystematic risk? the inflation rate increases unexpectedly the federal government lowers income taxes an oil tanker runs aground and …

Which one of the following is an implication of M&M Proposition II, without taxe

Which one of the following is an implication of M&M Proposition II, without taxes? Question 3 options: 1) A firm's optimal capital structure is 100 percent debt. 2) WACC is un…

Which one of the following is correct concerning the rules related to project an

Which one of the following is correct concerning the rules related to project analysis? a. The internal rate of return can lead to faulty decisions when two mutually exclusive pro…

Which one of the following is defined as the sales level that corresponds to a z

Which one of the following is defined as the sales level that corresponds to a zero NPV? A company is considering a project with a cash break-even point of 22,600 units. The selli…

Which one of the following is generally true concerning Chapter 11 bankruptcies?

Which one of the following is generally true concerning Chapter 11 bankruptcies? The firm’s officers turn over the firm’s daily operations to a court appointed director. Only volu…

Which one of the following is included in a firm\'s market value but yet is excl

Which one of the following is included in a firm's market value but yet is excluded from the firm's accounting value? real estate investment good reputation of the company equipme…

Which one of the following is included in a firm\'s market value but yet is excl

Which one of the following is included in a firm's market value but yet is excluded from the firm's accounting value? real estate investment good reputation of the company equipme…

Which one of the following is most apt to align management\'s priorities with sh

Which one of the following is most apt to align management's priorities with shareholders' interests? Allowing a manager to decorate his or her own office once he or she has been …

Which one of the following is most apt to delay the collection of cash? Having c

Which one of the following is most apt to delay the collection of cash? Having customers mail checks to a local lockbox rather than the home office Depositing checks throughout th…

Which one of the following is not one of the major reasons for a manager to unde

Which one of the following is not one of the major reasons for a manager to understand cost behavior? Useful for evaluating divisional performance Useful for implementing flexible…

Which one of the following is the best example of an announcement that is most a

Which one of the following is the best example of an announcement that is most apt to result in an unexpected return? A news bulletin that the anticipated layoffs by a firm will o…

Which one of the following is the best example of an announcement that is most a

Which one of the following is the best example of an announcement that is most apt to result in an unexpected return? A)A news bulletin that the anticipated layoffs by a firm will…

Which one of the following is the most ethical practice related to cash disburse

Which one of the following is the most ethical practice related to cash disbursement management? Intentionally delaying payments by creating a complex accounts payable system Taki…

Which one of the following is the reason that bonds may sell at a discount or pr

Which one of the following is the reason that bonds may sell at a discount or premium? Select one: A. The bond issuer adjusted the coupon rate to match that of other bond issues B…

Which one of the following is true: Corporations are the most common form of bus

Which one of the following is true: Corporations are the most common form of business organization in numbers but not (the largest) in terms of revenue generated (Money) Sole Prop…

Which one of the following is used as an indicator that a firm has good-quality

Which one of the following is used as an indicator that a firm has good-quality earnings? declining price-earnings ratios constant price-earnings ratios cash flow per share that e…

Which one of the following mcasures retuns in relation to tocal risi A. Treynor

Which one of the following mcasures retuns in relation to tocal risi A. Treynor ratio B. Sharpe ratio C. Jensen's alpha D. Value at Risk E beta You are comparing three securities …

Which one of the following policies most directly affects the projection of the

Which one of the following policies most directly affects the projection of the retained earnings balance to be used on a pro forma statement? A.) net working capital policy B.) c…

Which one of the following regarding the basis for mutual funds is false ? The b

Which one of the following regarding the basis for mutual funds is false ? The basis of mutual funds can be determined by using the:    Double category method Average basis Specif…

Which one of the following sets of dividend payments best meets the definition o

Which one of the following sets of dividend payments best meets the definition of two-stage growth as it applies to the two-stage dividend growth model? no dividends for 5 years, …

Which one of the following situations is most apt to result in a special dividen

Which one of the following situations is most apt to result in a special dividend payment? Answer a. Northern Electric is planning to increase its quarterly dividend by two percen…

Which one of the following statements about common stock is correct? D. Common s

Which one of the following statements about common stock is correct? D. Common stock gives stockholders first title to a share of the company's earnings, prior to other corporate …

Which one of the following statements about returns reported by mutual funds is

Which one of the following statements about returns reported by mutual funds is not correct? a. Reported returns are net of management expenses. b. Reported returns are net of 12b…

Which one of the following statements best describes the amount of life insuranc

Which one of the following statements best describes the amount of life insurance that may be used to provide an "incidental" death benefit to participants in a qualified retireme…

Which one of the following statements concerning financial futures is correct? A

Which one of the following statements concerning financial futures is correct? A) Speculators in the currency markets are generally firms involved with international trading of go…

Which one of the following statements concerning financial statement analysis is

Which one of the following statements concerning financial statement analysis is correct? a. The purchase of inventory using short-term credit will increase the current ratio. b. …

Which one of the following statements concerning interest rates is correct? A) S

Which one of the following statements concerning interest rates is correct? A) Savers would prefer annual compounding over monthly compounding. B) The effective annual rate decrea…

Which one of the following statements concerning interest rates is correct? A. T

Which one of the following statements concerning interest rates is correct? A. The stated rate is the same as the effective annual rate. B. Banks prefer more frequent compounding …

Which one of the following statements concerning option prices is correct? Selec

Which one of the following statements concerning option prices is correct? Select one: a. There is a relatively linear direct relationship between the volatility of the underlying…

Which one of the following statements concerning sinking funds is correct? Selec

Which one of the following statements concerning sinking funds is correct? Select one: a. Sinking funds are used solely to accumulate the funds needed to payoff bonds on the matur…

Which one of the following statements concerning the relationship between the vo

Which one of the following statements concerning the relationship between the volatility of the underlying stock price, as measured by sigma, and call and put prices is correct? S…

Which one of the following statements concerningscenario analysis is correct? Ch

Which one of the following statements concerningscenario analysis is correct? Choose one answer. a. Thepessimistic case scenario determines the maximum loss, in currentdollars, th…

Which one of the following statements illustrates a synergistic effect of a merg

Which one of the following statements illustrates a synergistic effect of a merger? a. The revenue of the combined firm is equal to the revenue of the acquiring firm plus the reve…

Which one of the following statements is NOT true? Replacement cost and adjusted

Which one of the following statements is NOT true? Replacement cost and adjusted book value are cost-based valuation approaches. The replacement cost approach involves restating t…

Which one of the following statements is accurate concerning the foreign exchang

Which one of the following statements is accurate concerning the foreign exchange market? a. The foreign exchange market is an over the counter market. b. As a financial market, t…

Which one of the following statements is an example of unsystematic risk? Answer

Which one of the following statements is an example of unsystematic risk? Answer The Labor Department announced that U.S. non-farm payrolls in May increased 100,000 more than expe…

Which one of the following statements is correct concerning a firm\'s fixed asse

Which one of the following statements is correct concerning a firm's fixed assets? Answer                                                     The market value is the expected sell…

Which one of the following statements is correct concerning a portfolio beta? A)

Which one of the following statements is correct concerning a portfolio beta? A) The beta of a portfolio of U.S. Treasury Bills is +1.0. B) The beta of the market portfolio is equ…

Which one of the following statements is correct concerning a portfolio of 20 se

Which one of the following statements is correct concerning a portfolio of 20 securities with multiple states of the economy when both the securities and the economic states have …

Which one of the following statements is correct concerning both the dollar retu

Which one of the following statements is correct concerning both the dollar return and the percentage return on a stock investment? The dollar return is dependent on the size of t…