A company usually establishes a short, arbitrary cutoff date for handling the initial screening of many small-dollar opportunities
Indicate whether the statement is true or false.
Answer: TRUE
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Bonds for two companies were just issued: Short Corp.'s bonds will mature in 5 years, and Long Corp.'s bonds will mature in 15 years. Both bonds promise to pay a semiannual coupon, they are not callable or convertible, and they are equally liquid. Further, assume that the Treasury yield curve is based only on expectations about future inflation, i.e., that the maturity risk premium is zero for T-bonds. Under these conditions, which of the following statements is correct?
A. If the Treasury yield curve is downward sloping, Long's bonds must under all conditions have the lower yield. B. If the yield curve for Treasury securities is upward sloping, Long's bonds must under all conditions have a higher yield than Short's bonds. C. If the yield curve for Treasury securities is flat, Short's bond must under all conditions have the same yield as Long's bonds. D. If Long's and Short's bonds have the same default risk, their yields must under all conditions be equal. E. If the Treasury yield curve is upward sloping and Short has less default risk than Long, then Short's bonds must under all conditions have the lower yield.
Whenever any competitor in a market raises or lowers its price, the value of every other product in that specific market is affected
Indicate whether the statement is true or false
The following are benefits of joining the Project Management Institute EXCEPT
A. Offers project management certification through formal examination. B. Invitations to PMI sponsored workshops and national forums. C. Membership in one of more than 300 local chapters across North America. D. Subscription to PMI publications. E. All of these are benefits of joining the Project Management Institute.
?A firm's weighted average cost of capital (WACC) is:
A. ?set by the board of directors of the firm because it is the benchmark they use to evaluate upper management. B. ?regulated by the Internal Revenue Service (IRS) because tax-deductible debt is included in the computation. C. ?determined by the financial markets because investors provide the funds used by firms and these funds have costs, which are the returns demanded by investors. D. ?the same as the firm's internal rate of return (IRR). E. ?the total net present value (NPV) of all the capital budgeting projects in which the firm invests in any year.