Financial literacy

1. Indicate whether the following events might cause stocks in general to change

1. Indicate whether the following events might cause stocks in general to change price, and whether they might cause Big Widget Corp.’s stock to change price. a. The government an…

1. Individuals who switch from a low-demand industry to a high-demand industry u

1. Individuals who switch from a low-demand industry to a high-demand industry usually earn higher incomes. Select one: True False 2. Danny invests $124,090 in a fund and expects …

1. Industrial supply has a $150,000 line of credit with a 6.5 percent interest r

1. Industrial supply has a $150,000 line of credit with a 6.5 percent interest rate. The loan agreement requires a 2 percent compenstaing balance, which is based on the total amou…

1. Infinite growth is a problem with the dividend discount model because: The ex

1. Infinite growth is a problem with the dividend discount model because: The expected stream of dividends is infinite At reasonably high discount rates, such as 12 percent, divid…

1. Inflation erodes the purchasing power of a nation\'s currency. T/F 2. Use the

1. Inflation erodes the purchasing power of a nation's currency. T/F 2. Use the following table to answer the next two questions. In Terms of USD Country Bid Ask Brazil $.3033 $.3…

1. Input Inc is considering investing in a project in which the risk is greater

1. Input Inc is considering investing in a project in which the risk is greater than the firm's current risk based on any method for assessing risk. which of the follwoing should …

1. Insurance products are services. Describe Progressive Insurance%u2019s produc

1. Insurance products are services. Describe Progressive Insurance%u2019s products in terms of the four characteristics of services. How does Progressive deliver value to its cust…

1. Integrating Asset and Liability Management What is accomplished when a bank i

1. Integrating Asset and Liability Management What is accomplished when a bank integrates its liability management with its asset management? 2. Liquidity Given the liquidity adva…

1. Interest Income How can gross interest income rise while the net interest mar

1. Interest Income How can gross interest income rise while the net interest margin remains somewhat stable for a particular bank? 2. Impact on Income If a bank shifts its loan po…

1. Interest rate fundamentals: The real rate of return John Smith, a trainee at

1. Interest rate fundamentals: The real rate of return John Smith, a trainee at an investment banking firm, is trying to get an idea of what real rate of return investors are expe…

1. Interest rate parity Aa Aa The rise of globalization is due to the many compa

1. Interest rate parity Aa Aa The rise of globalization is due to the many companies that have become multinational corporations for various reasons-for example, to access better …

1. Interest rates affect corporate profits and security prices. Based on your un

1. Interest rates affect corporate profits and security prices. Based on your understanding of the relationship between interest rates and corporate profits and security prices, i…

1. Interest rates are given as annual rates. If semiannual (twice a year) compou

1. Interest rates are given as annual rates. If semiannual (twice a year) compounding is being used, then you would make the following adjustments: (Points : 1)       Double the r…

1. Interest rates on securities issued by borrowers in the economy other than th

1. Interest rates on securities issued by borrowers in the economy other than the government must reflect the different types and degrees of risk that investors in those securitie…

1. International diversification will provide low risk when the investor finds i

1. International diversification will provide low risk when the investor finds international securities having a compound rate of return equal to that of the United States and a c…

1. Introductory concepts Aa Aa Term Answer Description The average rate paid by

1. Introductory concepts Aa Aa Term Answer Description The average rate paid by a firm to secure the outstanding finandial capital used to acquire the firm's assets Capital compon…

1. Investigate and calculate the cost of equity of the target company Wescoal Mi

1. Investigate and calculate the cost of equity of the target company Wescoal Mining limited? - estimate the beta of the company (Wescoal), making use of gearing and ungearing bet…

1. Investing globally can add return to a domestic-only portfolio, while at the

1. Investing globally can add return to a domestic-only portfolio, while at the same time reducing the risk of the portfolio. Global investing, however, adds foreign currency exch…

1. Investment criteria. The Global Chemical Company (GCC) uses the following cri

1. Investment criteria. The Global Chemical Company (GCC) uses the following criteria to make o make capital investment decisions: Effect on earnings per share (must be positive) …

1. Investment projects in Indonesia and other emerging markets, often have low s

1. Investment projects in Indonesia and other emerging markets, often have low systematic risk; this implies that appropriate projects discount rates are very low. In reality, mos…

1. Investors who conduct industry analyses typically favor companies with strong

1. Investors who conduct industry analyses typically favor companies with strong market positions over companies with less secure market position because firms with strong market …

1. Irwin Industries is currently considering a project that will produce cash in

1. Irwin Industries is currently considering a project that will produce cash inflows of $81,000 a year for two years followed by $79,000 a year for three more years. The cost of …

1. Is the cost iof capital really relevant factor in competiveness and strategy

1. Is the cost iof capital really relevant factor in competiveness and strategy of a company likle Petrobra's ? Does the corporate cost of capital really affect competiveness? 2. …

1. Is this an actively managed or passively managed fund? 2. What are the fees a

1. Is this an actively managed or passively managed fund? 2. What are the fees associated with this fund? 3. Has the fund outperformed the Russell 2000? AQR Small Cap Multi-Style …

1. It is April and a trader buys 100 September put options with a strike price o

1. It is April and a trader buys 100 September put options with a strike price of $21. The stock price is $17.2 and the option price is $4.44. At the expiration, the stock price b…

1. It is often desirable to keep life insurance death proceeds out of the insure

1. It is often desirable to keep life insurance death proceeds out of the insured’s estate for tax reasons. Which of the following describe(s) a necessary condition for keeping th…

1. JJ Enterprises is considering the purchase of a new machine that will produce

1. JJ Enterprises is considering the purchase of a new machine that will produce thumb drives. The new machine will require an initial investment of $100,000 and has an economic l…

1. JJ Industries has a P/E ratio of 18 and an EPS of $0.93. This means that JJ\'

1. JJ Industries has a P/E ratio of 18 and an EPS of $0.93. This means that JJ's stock is currently selling for A. $16.74 per share B. $17.07 per share C. $18.00 per share D. $19.…

1. Jacques Smith holds 1,000 shares of General Electric’s (GE) common stock. The

1. Jacques Smith holds 1,000 shares of General Electric’s (GE) common stock. The annual stockholder meeting is being held soon, but as a minor shareholder, Jacques doesn’t plan to…

1. Janicex Co. is growing quickly. Dividends are expected to grow at a rate of 2

1. Janicex Co. is growing quickly. Dividends are expected to grow at a rate of 25 percent for the next three years, with the growth rate falling off to a constant 4 percent therea…

1. Jennifer uses the discounted payback method to evaluate any project that cost

1. Jennifer uses the discounted payback method to evaluate any project that costs less than $1 million. Applying the discounted payback decision rule to all projects is most likel…

1. Jim makes a deposit of $12,000 in a bank account. The deposit is to earn inte

1. Jim makes a deposit of $12,000 in a bank account. The deposit is to earn interest compounded annually at the rate of 6 percent for seven years. a. How much will Jim have on dep…

1. Jing Associates, LLC, a large law firm in Denver, is building a new office. T

1. Jing Associates, LLC, a large law firm in Denver, is building a new office. To pay for the construction, Jing Associates is selling a security that will pay the investor the lu…

1. John is trying to decide if he should attend college or not. Part of his deci

1. John is trying to decide if he should attend college or not. Part of his decision will be based on the return on investment of college. He estimates that the per year cost to a…

1. Johnny Appleseed purchases 500 shares of Musselman Applesauce stock for $27.5

1. Johnny Appleseed purchases 500 shares of Musselman Applesauce stock for $27.50 per share, par value. On the purchase, he pays a flat fee commission of $29.95. a.) What is his t…

1. Johnson Jets is considering two mutually exclusive projects. Project A has an

1. Johnson Jets is considering two mutually exclusive projects. Project A has an up-front cost of $122,000 (CF0 = -122,000), and produces positive after-tax cash inflows of $30,00…

1. Jupiter Explorers has $9,800 in sales. The profit margin is 5 percent. There

1. Jupiter Explorers has $9,800 in sales. The profit margin is 5 percent. There are 4,500 shares of stock outstanding. The market price per share is $1.90. What is the price-earni…

1. KADS, Inc. has spent $500,000 on research to develop a new computer game. The

1.     KADS, Inc. has spent $500,000 on research to develop a new computer game. The firm is planning to spend $250,000 on a machine to produce the new game. Shipping and installa…

1. KL Inc., has no debt outstanding and a total market value of $70,000. Earning

1. KL Inc., has no debt outstanding and a total market value of $70,000. Earnings before interest and taxes, EBIT, are projected to be $6,000 if economic conditions are normal. If…

1. KL Inc., has no debt outstanding and a total market value of $70,000. Earning

1. KL Inc., has no debt outstanding and a total market value of $70,000. Earnings before interest and taxes, EBIT, are projected to be $6,000 if economic conditions are normal. If…

1. KLB Corporation needs to acquire an equipment for its research lab and it is

1. KLB Corporation needs to acquire an equipment for its research lab and it is looking into purchasing or leasing the equipment. It needs your advice. The following data is avail…

1. Karl Korporation has decided to take a look at its portfolio and examine the

1. Karl Korporation has decided to take a look at its portfolio and examine the current risk. Currently, Karl Korp’s portfolio contains 3 stocks, has a beta of 1.6, an expected …

1. Kate purchased 500 shares of Fast Deliveries stock on Wednesday, July 7th. Te

1. Kate purchased 500 shares of Fast Deliveries stock on Wednesday, July 7th. Ted purchased 100 shares of Fast Deliveries stock on Thursday, July 8th. Fast Deliveries declared a d…

1. Kelly Malone plans to have $40 withheld from her monthly paycheck and deposit

1. Kelly Malone plans to have $40 withheld from her monthly paycheck and deposited in a savings account that earns 12% annually, compounded monthly. If Malone continues with her p…

1. Kempton Enterprises has bonds outstanding with a $1,000 face value and 10 yea

1. Kempton Enterprises has bonds outstanding with a $1,000 face value and 10 years left until maturity. They have an 12% annual coupon payment, and their current price is $1,175. …

1. Kevin purchases 100 shares of Coca- Cola at $42.40 a share in January. The co

1. Kevin purchases 100 shares of Coca- Cola at $42.40 a share in January. The company paid a dividend of .25 per share and he sells the stock after a year for $43.00 a share. Calc…

1. KimberlyClark, a household product manufacturer, reported earnings per share

1. KimberlyClark, a household product manufacturer, reported earnings per share of  3.2 $ in 2014 and paid dividends per share of $1.7  in that year. The firm reported depreciatio…

1. King Fisher Aviation is considering an investment in a new technology for a d

1. King Fisher Aviation is considering an investment in a new technology for a drone project with a price of $16 million. Their current technology has a book value of $5 million a…

1. Kingston, Inc. management is considering purchasing a new machine at a cost o

1. Kingston, Inc. management is considering purchasing a new machine at a cost of $4,309,294. They expect this equipment to produce cash flows of $887,041, $870,440, $990,392, $1,…

1. Kolby’s Korndogs is looking at a new sausage system with an installed cost

1. Kolby’s Korndogs is looking at a new sausage system with an installed cost of $625,000. This cost will be depreciated straight-line to zero over the project’s five-year lif…