Final FIN370 Summer 2010 Key

# Final FIN370 Summer 2010 Key - Final FIN370 Summer 2010 Key...

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Final FIN370 Summer 2010 Key 1. A sunk cost is: A. a form of erosion. B. a cost that has already been incurred and cannot be recouped. C. the value of an asset currently owned by a firm. D. a cost for which there is no alternative option. E. another name for a fixed cost. BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGE LEARNING OBJECTIVE NUMBER: 1 LEVEL OF DIFFICULTY: BASIC Ross - Chapter 009 #3 SECTION: 9.2 TOPIC: SUNK COST TYPE: DEFINITIONS 2. Around Town Movers recently purchased a new truck costing \$97,000. The firm financed this purchase at 8.25 percent interest with monthly payments of \$2,379.45. How many years will it take the firm to pay off this debt? A. 3.5 years B. 4.0 years C. 5.0 years D. 4.5 years E. 3.0 years BLOOMS TAXONOMY QUESTION TYPE: APPLICATION LEARNING OBJECTIVE NUMBER: 1 LEVEL OF DIFFICULTY: INTERMEDIATE Ross - Chapter 005 #56 SECTION: 5.2 TOPIC: ANNUITY PERIOD TYPE: PROBLEMS

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3. The stock of Uptown Men's Wear is expected to produce the following returns given the various states of the economy. What is the expected return on this stock? A. 9.6 percent B. 10.4 percent C. 13.6 percent D. 15.3 percent E. 12.8 percent BLOOMS TAXONOMY QUESTION TYPE: APPLICATION LEARNING OBJECTIVE NUMBER: 1 LEVEL OF DIFFICULTY: BASIC Ross - Chapter 011 #47 SECTION: 11.1 TOPIC: EXPECTED RETURN TYPE: PROBLEMS 4. One year ago, you purchased a 7 percent coupon bond with a face value of \$1,000 when it was selling for 99.8 percent of par. Today, you sold this bond for 100.5 percent of par. What is your total dollar return on this investment? A. \$63 B. \$77 C. \$72 D. \$70 E. \$69 BLOOMS TAXONOMY QUESTION TYPE: APPLICATION LEARNING OBJECTIVE NUMBER: 1 LEVEL OF DIFFICULTY: BASIC Ross - Chapter 010 #45 SECTION: 10.1 TOPIC: DOLLAR RETURN TYPE: PROBLEMS
5. The goal of financial management is to increase the: A. future value of the firm's total equity. B. current market value per share. C. number of shares outstanding, thereby increasing the market value of equity. D. dividends paid per share. E. book value of equity. BLOOMS TAXONOMY QUESTION TYPE: COMPREHENSION LEARNING OBJECTIVE NUMBER: 2 LEVEL OF DIFFICULTY: INTERMEDIATE Ross - Chapter 001 #38 SECTION: 1.4 TOPIC: GOAL OF FINANCIAL MANAGEMENT TYPE: CONCEPTS 6. Given the following information, what is the standard deviation for this stock? A. 8.03 percent B. 7.91 percent C. 7.72 percent D. 6.87 percent E. 7.55 percent BLOOMS TAXONOMY QUESTION TYPE: APPLICATION LEARNING OBJECTIVE NUMBER: 1 LEVEL OF DIFFICULTY: INTERMEDIATE Ross - Chapter 011 #55 SECTION: 11.1 TOPIC: STANDARD DEVIATION TYPE: PROBLEMS 7. The amount of systematic risk present in a particular risky asset relative to that in an average risky asset is called the: A. mean. B.

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## This note was uploaded on 12/14/2010 for the course FIN 303 taught by Professor Lloyd during the Spring '10 term at Albany Technical College.

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Final FIN370 Summer 2010 Key - Final FIN370 Summer 2010 Key...

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