Financial literacy

1. When assessing the value of a business, ________ is MOST important. (Points :

1. When assessing the value of a business, ________ is MOST important. (Points : 1) capital assets cash flow profit 2. On an income statement, depreciation is considered to be an …

1. When computing a value-weighted index, we use a \"Divisor\". True False 2. Th

1. When computing a value-weighted index, we use a "Divisor". True False 2. The primary market for stocks is the IPO market, not the stock market. True False 3. An index has a mar…

1. When determining a company\'s cash flow from assets, how is depreciation hand

1. When determining a company's cash flow from assets, how is depreciation handled and why is that so? 2. How might deconstructing Return on Equity using the DuPont model be helpf…

1. When examining ratios to determine if a new plan was a success, we would bene

1. When examining ratios to determine if a new plan was a success, we would benefit most by: A. comparing to industry averages. B comparing to our closest competitor. C time trend…

1. When expected inflation increases, for any given nominal interest rate the: A

1. When expected inflation increases, for any given nominal interest rate the: A. cost of borrowing increases and the desire to borrow decreases. B. real interest rate increases. …

1. When interest rates are low, which of the following bonds is most likely to b

1. When interest rates are low, which of the following bonds is most likely to be called? a) Par bonds b) Premium bonds c) Discount bonds d) Zero coupon bonds 2. Holding other fac…

1. When markets are efficient, the stock price is considered to be more than the

1. When markets are efficient, the stock price is considered to be more than the intrinsic value of the stock. a) more than b) equal to 2. A pharmaceutical company announces that …

1. When should an investor calculate both yield to maturity and yield to call? A

1. When should an investor calculate both yield to maturity and yield to call? A. Whenever there is a call provision B. When the sum of the present values of the interest payments…

1. When talking about cost of capital, it is said that required return is the sa

1. When talking about cost of capital, it is said that required return is the same than cost of capital. How's that (one is return and the other one is cost)? 2. If a company's D/…

1. When the price of a bond equals the face value the: A. yield to maturity will

1. When the price of a bond equals the face value the: A. yield to maturity will be above the coupon rate. B. yield to maturity will be below the coupon rate. C. current yield is …

1. Whi ch of the following is the function of a financial market A) provide liqu

1. Whi ch of the following is the function of a financial market A) provide liquidity B) risk management C) efficient allocation of money D) all of the above E) None of the above …

1. Which bank should Gary choose for a saving account, which bank for a certific

1. Which bank should Gary choose for a saving account, which bank for a certificate of deposit, and which bank for a term loan? 2. Gary will invest the donations from a wealthy in…

1. Which bank should Gary choose for a saving account, which bank for a certific

1. Which bank should Gary choose for a saving account, which bank for a certificate of deposit, and which bank for a term loan? 2. Gary will invest the donations from a wealthy in…

1. Which bank should Gary choose for a saving account, which bank for a certific

1. Which bank should Gary choose for a saving account, which bank for a certificate of deposit, and which bank for a term loan? 2. Gary will invest the donations from a wealthy in…

1. Which bond has the highest expected total return? A The bonds have the same e

1. Which bond has the highest expected total return? A The bonds have the same expected total return B Turner's bonds have the the highest expected total return C Irwin's bonds ha…

1. Which investment should Sammy choose? Sammy is endowed with $10,000,000 and i

1. Which investment should Sammy choose? Sammy is endowed with $10,000,000 and is considering whether to invest in a business venture. Perfect capital markets, interest rate of 6%…

1. Which is better, a present value of $100 or a future value of $100 ? Please e

1. Which is better, a present value of $100 or a future value of $100 ? Please explain 2. Define and explain two factors that affect the present value of an asset. 3. In five year…

1. Which is not true about \"Revolving Loans\"? (2pts) a. Allows for immediate a

1. Which is not true about "Revolving Loans"? (2pts) a. Allows for immediate access to a level of funds b. Have higher interest rates c. It is considered an effective source for f…

1. Which journal entry reflects the adjusting entry needed on December 31?: In N

1. Which journal entry reflects the adjusting entry needed on December 31?: In November, BOC prepaid $30,000 of rent for December, January, and February (and it was recorded prope…

1. Which journal entry reflects the adjusting entry needed on December 31?: Last

1. Which journal entry reflects the adjusting entry needed on December 31?: Last year, BOC purchased software for $10,000. The expected life of the software is 2 years and it has …

1. Which of following is true about the private investors? a. In a private-to-pu

1. Which of following is true about the private investors? a. In a private-to-public transaction, market beta has to be scaled up to capture the risk exposure of investors. b. In …

1. Which of the following actions did the Fed take to stabilize the financial en

1. Which of the following actions did the Fed take to stabilize the financial environment after the financial markets collapsed in 2007-2008? a) It began to charge interest on res…

1. Which of the following are false? a. The EBITDA multiple is useful in determi

1. Which of the following are false?     a. The EBITDA multiple is useful in determining an acquisition price when a firm is considering buying another firm.    b. The bid quote o…

1. Which of the following are ways that a firm can reduce cash flows in order to

1. Which of the following are ways that a firm can reduce cash flows in order to prevent managers from wastefully spending excess cash flows? Check all that apply. A) Funneling ex…

1. Which of the following best describes why firms produce financial statements?

1. Which of the following best describes why firms produce financial statements? a.To use a tool when planning future investments within the firm. b.To provide interested parties,…

1. Which of the following bond ratings would be associated with the lowest inter

1. Which of the following bond ratings would be associated with the lowest interest rate? b. BBE C. A 2. The relationship between maturity and interest rates (yields) is the a. co…

1. Which of the following comes closest to the beta of a portfolio that has 55%

1. Which of the following comes closest to the beta of a portfolio that has 55% of the total invested in the risk free rate of interest and 45% of the total invested in the market…

1. Which of the following comes closest to the future value of a 10-year annuity

1. Which of the following comes closest to the future value of a 10-year annuity of $5,630 that begins in one year and is invested to earn an interest rate of 12.25%? $ 56,300 $ 1…

1. Which of the following comes closest to the net present value (NPV) of a proj

1. Which of the following comes closest to the net present value (NPV) of a project whose initial investment is $5 and which produces two cash flows: the first at the end of year …

1. Which of the following comes closest to the profitability index (PI) of a pro

1. Which of the following comes closest to the profitability index (PI) of a project that requires an initial investment of $100 and produces a single cash flow of $160 at the end…

1. Which of the following comes closest to the value of investing $5,000 today f

1. Which of the following comes closest to the value of investing $5,000 today for 5 years at the rate of 4% compounded monthly? $ 6,744 $ 6,105 $ 5,808 $ 6,417 $ 7,088 2. What am…

1. Which of the following do you need to know to calculate NPV? A.) Amount and t

1. Which of the following do you need to know to calculate NPV? A.) Amount and timing of future cashflows B.) Appropriate discount rate C.) Initial Costs D.) All of the above 2. W…

1. Which of the following does NOT affect the business risk of a firm? Variabili

1. Which of the following does NOT affect the business risk of a firm? Variability in Sales (Price and/or Volume) Degree of Operating Leverage        Product Diversification Level…

1. Which of the following forms of business is \"double taxed\", once on their p

1. Which of the following forms of business is "double taxed", once on their profits and once again on their dividends? A. a limited liability company (LLC) B. a general partnersh…

1. Which of the following instruments are contracts but are not securities? a. s

1.            Which of the following instruments are contracts but are not securities? a.      stocks                         b.      options                      c.     swaps    …

1. Which of the following investment that pay $6500 in four years will have a hi

1. Which of the following investment that pay $6500 in four years will have a higher price today? Assume that both investments have equal risk. a. The security that earns an inter…

1. Which of the following investments would have the highest future value at the

1.     Which of the following investments would have the highest future value at the end of ten years?  Assume that the effective annual rate for all investments is the same and i…

1. Which of the following is (are) TRUE? Why? a) The weighted average cost of de

1.     Which of the following is (are) TRUE?  Why? a)     The weighted average cost of debt using market values is less than the cost of debt using book values because the price o…

1. Which of the following is (are) TRUE? Why? a) The weighted average cost of de

1.     Which of the following is (are) TRUE?  Why? a)     The weighted average cost of debt using market values is less than the cost of debt using book values because the price o…

1. Which of the following is (are) TRUE? Why? a) The weighted average cost of de

1.     Which of the following is (are) TRUE?  Why? a)     The weighted average cost of debt using market values is less than the cost of debt using book values because the price o…

1. Which of the following is NOT a cash flow from operating activities a.Cash re

1. Which of the following is NOT a cash flow from operating activities a.Cash receipts from selling goods and services b.Cash payments on the principal of long-term debt c.Payment…

1. Which of the following is NOT a direct action that can be taken by shareholde

1. Which of the following is NOT a direct action that can be taken by shareholders? Submitting shareholder resolutions directing the board to take specific actions Withholding vot…

1. Which of the following is NOT a limitation of the payback period rule? a. It

1. Which of the following is NOT a limitation of the payback period rule? a. It is difficult to calculate. b. It does not account for changes in the discount rate. c. It ignores c…

1. Which of the following is NOT a potential problem when estimating and using b

1.        Which of the following is NOTa potential problem when estimating and using betas, i.e., which statement is FALSE? a.        Sometimes, during a period when the company i…

1. Which of the following is NOT a potential problem when estimating and using b

1.        Which of the following is NOTa potential problem when estimating and using betas, i.e., which statement is FALSE? a.        Sometimes, during a period when the company i…

1. Which of the following is NOT another name for corporate finance? Quantitativ

1. Which of the following is NOT another name for corporate finance? Quantitative Finance Business Finance Financial Management Managerial Finance 2. The most common type of busin…

1. Which of the following is NOT demonstrated by a production possibility curve?

1. Which of the following is NOT demonstrated by a production possibility curve? a) Scarcity b) opportunity cost c) necessity for choice due to scarcity d) price 10. If a tax retu…

1. Which of the following is NOT true? A) When a CBOE call option on IBM is exer

1.  Which of the following is NOT true? A) When a CBOE call option on IBM is exercised, IBM issues more stock B) An American option can be exercised at any time during its life C)…

1. Which of the following is a component of money management? All of these choic

1. Which of the following is a component of money management? All of these choices are components of money management. 2. Last year your salary was $32,000. This year it increased…

1. Which of the following is a financial asset? a. An experienced and hardworkin

1. Which of the following is a financial asset?        a. An experienced and hardworking sales force        b. A trademark        c. A bank loan        d. Undeveloped land 2. Whic…