Business - Finance

1

The balance of payments is a summary of all transactions between domestic and foreign residents for a specific country over a specified period of time

2

Briefly explain what is meant by risk-neutral probability.

3

The Hirt & Block mutual fund has assets of $147 million, liabilities of $7 million and 7 million shares outstanding. What is the net asset value per share?

4

If a firm utilizes debt financing, an X% decline in earnings before interest and taxes (EBIT) will result in a decline in earnings per share that is larger than X.

5

Composite rating 5 is the rating for the soundest financial institutions.

6

A single-payment note is a secured fund which can be obtained from a commercial bank when a borrower needs additional funds for a short period

7

The Federal Reserve's function as the lender of last resort leads to the problem of

8

A(n) _________________________________________ is a contractual promise by a bank to lend to a customer up to a maximum amount of money at a set interest rate (or rate markup over the rate prime or LIBOR). The only way the bank can renege on its promise is if there has been a "material adverse change" in the borrower's financial condition. formal loan commitment 9. ______________________ examines how effectively assets are being utilized to generate sales and how efficiently sales are converted into cash.

9

Briefly explain the concept of need recognition in the consumer decision-making process.

10

____ finance seeks to identify why some investors react irrationally when confronted with unexpected ups and downs in the market

11

A firm has an operating cash flow of $600, a net change in gross fixed asssets of $100, and a change in net operating working capital of $50. What is the firm's free cash flow (FCF)?

12

A parent holding company sells shares in its subsidiary such that the parent now owns only 65% of the subsidiary and, thus, the tax returns of the parent and its subsidiary can't be consolidated. The parent receives annual dividends from the subsidiary of $2,500,000. If the parent's marginal tax rate is 25% and if the exclusion on intercompany dividends is 50%, what is the effective tax rate on the intercompany dividends, and how much net dividends are received?

13

You have a portfolio with a beta of 3.1. What will be the new portfolio beta if you keep 85 percent of your money in the old portfolio and 15 percent in a stock with a beta of 4.5?

14

Geoff Willis and Mary Williams, president and CEO respectively of the First National Bank of Edmond, come from a background in retail banking. As a strategic initiative, they have decided to focus their lending activities on consumer loans and loans to small business. What factor determining the growth and mix of loans does this fact reflect?

15

Which of the following is true regarding equity mutual funds?I) They invest primarily in stock.II) They may hold fixed-income securities, as well as stock.III) Most hold money market securities, as well as stock.IV) Two types of equity funds are income funds and growth funds.

16

Which of these forms of borrowing results in the lowest cost of credit?

17

Briefly define the five filing categories available to taxpayers. When might married taxpayers choose to file separately?

The five filing statuses are:

Single—taxpayer is not married on last day of year
Married filing jointly—both parties to the marriage agree and take responsibility for the tax return. They must be married on the last day of the year.
Married filing separate—there are two returns filed by the married couple. Each spouse is responsible for reporting his or her own income and tax.
Surviving Spouse [Qualifying widow(er)]—For the two years after death of a spouse, the surviving spouse may usethe joint rates as long as they have a dependent child living with them.
Head of Household—Unmarried taxpayer who provides a household for a qualified person living with them. There is an exception for abandoned spouses and for parents living in a retirement home paid for by taxpayer.

It will be a rare case where a couple will decide to file married filing separately. Examples are where one spouse does not want to be liable for the other's unpaid taxes. In very unusual cases, one spouse may be able to deduct higher itemized deductions by filing separately.

18

In which case will locational arbitrage most likely be feasible?

19

Investors are generally well advised to avoid mutual funds with

20

Kurt's medical expense policy states that it will pay him a flat $50 a day for each day he is hospitalized. The policy pays benefits on which basis?

21

Suppose that a company's equity is currently selling for $42.25 per share and that there are 1.9 million shares outstanding and 29 thousand bonds outstanding, which are selling at 111.50 percent of par. If the firm was considering an active change to their capital structure so that the firm would have a D/E of 1.9, which type of security (stocks or bonds) would they need to sell to accomplish this, and how much would they have to sell? (Round your intermediate ratio to 4 decimal places.)

22

In the constant growth model, the return on a stock can be shown to be equal to the sum of the dividend yield plus the:

23

The cumulative number of shares that have been sold short by investors and not covered is called

24

Compute the risk premium for the stock of Omega Tools if the risk-free rate is 6%, the expected market return is 12%, and Omega's stock has a beta of 0.8

25

In response to a temporary decline in earnings per share, most companies would

26

A project with an initial cost of $30,000 is expected to provide cash flows of $9900, $11,100, $14,200, and $8700 over the next four years, respectively. If the required return is 8.5 percent, what is the project's profitability index?

27

Generally, a ____ home currency can ____ domestic economic growth

28

Which of the following types of annuity payout options guarantees, as a minimum, the payout of the entire annuity principal amount?

29

Because information is scarce,

30

_________ is the routine, day-to-day administration of cash and near-cash resources, also known as liquid assets, by an individual or family

31

At the accounting break-even point, Swiss Mountain Gear sells 14,600 ski masks at a price of $10 each. At this level of production, the depreciation is $58,000 and the variable cost per unit is $4. What is the amount of the fixed costs at this production level?

32

What is the table called which lists the amount of each loan payment, the interest and principal portions of each payment, and the remaining principal balance?

33

Enterprise value multiples allow us to compare firms with different amount of leverage.

34

Dandee Lions, Inc. has a cash balance of $105,000; accounts payable of $290,000; inventory of $213,000; accounts receivable of $310,000; notes payable of $95,000; and accrued wages and taxes of $65,000. How much net working capital does the firm need to fund?

35

The efficient markets hypothesis is weakened by evidence that

36

Which of the following is consistent with the efficient market hypothesis?

37

Which one of the following is largely based on forecasts of macroeconomic factors?

38

A licensed sales associate collects rent from a tenant. The sales associate must

39

Assume that Japan places a strict quota on goods imported from the United States and the United States places a strict quota on goods imported from Japan. This event should immediately cause the U.S. demand for Japanese yen to ____, and the supply of Japanese yen to be exchanged for U.S. dollars to ____

40

If a company fails to meet the terms of the indenture, it is

41

If the Fed does not change its monetary policy in an economy that is producing an output lower than the full-employment level of output, the short-run aggregate supply curve will eventually shift ____, and the price level will ____.

42

____ is the management of short-term assets and liabilities

43

What is the beta of the portfolio?

44

All other things held constant, the present value of a given annual annuity decreases as the number of periods per year increases.

45

The past five monthly returns for PG Company are 3.25 percent, −1.45 percent, 4.35 percent, 6.49 percent, and 3.75 percent. What is the average monthly return?

46

The higher the tax rate, the ________ the net underwriting cost on the new bond issue, from a cash flow point of view.

47

The free cash flow to equity approach does not require that a stock pay dividends

48

Which of the following is a drawback of a push strategy?

49

Buying a(n) ________ is a simple and good way to get into real estate investing.

50

Which of these is the dollar return characterized as a percentage of money invested?

51

Financing activities have no impact on the income statement, but rather are reflected in changes in

52

Jude wants to receive $1,100 at the beginning of each of the next eight years. If his opportunity cost rate is 9 percent compounded annually, how much must he deposit in an account today? Use a financial calculator to make the calculation.

53

You invest $10,000 in a complete portfolio. The complete portfolio is composed of a risky asset with an expected rate of return of 15% and a standard deviation of 21% and a Treasury bill with a rate of return of 5%. How much money should be invested in the risky asset to form a portfolio with an expected return of 11%?

Find your answers, solutions and more...

We made it much easier for you to find exactly what you're looking for on Sciemce. Enjoy our search engine "Clutch."

Save a GPA. Donate your notes with us.

Business - Finance

Recent Packs