BA 301 Quiz 1& 2

BA 301 Quiz 1& 2 - Which of the following concerning...

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Which of the following concerning the relationship between risk and return is correct? Safer investments tend to have lower returns. Which of the following concerning the relationship between risk and return is correct? Investors generally require a higher return as they take on more risk Which type of investment has the least amount of inherent risk? Treasury bills Which type of investment has the greatest amount of inherent return? Small company stock According to the theory of efficient capital markets, Current stock prices reflect all publicly available information; Stock prices react instantaneously to new information Which of the following concerning rational investors is true? Rational investors are risk averse; rational investors prefer less risk to more risk. In the short term, stock prices are driven by Supply and demand In the long term, stock prices are driven by: Corporate Earnings (fundamentals The primary fiduciary responsibility that management has is to Maximize shareholder value In the movie “Wall Street” Gordon Gecko’s justification for taking over Teldar Paper was that he was going to: Maximize shareholder value The time value of money implies that: A dollar today is worth MORE than a dollar tomorrow Diversification: focuses on investing your assets in such a way that you can get the best possible return for your given level of risk;Is the allocation of money to a variety of asset classes to ensure the maximize return for a given level of risk Which of the following is an “enemy” of your investment plan? Taxes; Transaction costs; Inflation Which of the following is part of the treasurer's function? Managing short and long term capital requirements Which of the following is part of the controller’s function? Preparing financial statements and reports
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What is capital budgeting? Managing investments in long-term assets What is working capital management? Managing the firm’s short-term financial position Which of the following is an example of a capital structure decision? Determining the mixture of long-term debt and equity used to finance the company’s operations Which of the following is an element of the new corporate finance environment? Deregulation; Greater economic volatility and risk ; Institutionalization of markets Which of the following is an element of good management according to Gordon Gekko? Management should have a stake in the company Which of the following is a principle held by Gordon Gecko: Management must be accountable to the shareholders Given the following information for Apple, compute the company’s market capitalization. Stock price: $86 * Shares outstanding: 860M What are the three strategic areas of financial management? Capital budgeting, working capital management, capital structure
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This note was uploaded on 06/03/2010 for the course BA 302 taught by Professor R during the Fall '08 term at Penn State.

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BA 301 Quiz 1& 2 - Which of the following concerning...

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