FIN320_Sample_Exam_1

FIN320_Sample_Exam_1 - SAMPLE EXAM #1 FIN320 Dr. Ghosh The...

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SAMPLE EXAM #1 FIN320 Dr. Ghosh The sample exam has more questions on it than are on the actual exam, but it’s better to practice more than less! For questions that are phrased as statements, mark A for true or B for false. For questions that have answer choices, mark the corresponding letter clearly on the answer sheet. Good luck! 1. The primary goal of a publicly-owned firm interested in serving its stockholders should be to a. Minimize the debt used by a firm. b. Maximize expected EPS. c. Minimize the chances of losses. d. Maximize the stock price per share. e. Maximize expected net income. 2. Money markets are markets for a. Foreign currency exchange. b. Consumer automobile loans. c. Corporate stocks. d. Long-term bonds. e. Short-term debt securities. 3. A corporate stock that was issued last year would now trade in the __________ market. a. primary b. secondary c. money d. debt e. government securities
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4. Which of the following is not considered a financial intermediary? a. commercial bank b. savings and loan association c. pension fund d. investment bank e. All of the above are financial intermediaries. 5. An amortized loan is a loan that requires equal payments over its life; its payments include both interest and repayment of the debt. 6. What is the future value of a 5-year ordinary annuity with annual payments of $200 evaluated at a 15 percent interest rate? a. $670.44 b. $842.91 c. $1,169.56 d. $1,522.64 e. $1,348.48
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7. Which of the following statements is incorrect? a. We won’t take on additional risk unless we expected to be compensated with additional return. b. A dollar received today is worth more than a dollar received tomorrow. c. Cash, not profits, is king. d. All risk can be diversified away. e. Efficient markets are those in which all publicly available information is reflected in security prices. 8. When a corporation decides to raise external capital, those funds can only be obtained by making a public offering. 9.
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FIN320_Sample_Exam_1 - SAMPLE EXAM #1 FIN320 Dr. Ghosh The...

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