2504-final%20exam-2008

2504-final exam-20 - FINAL EXAMINATION Fall 2008 Student Name Student Number DURATION 3 HOURS Department Name Course Number BUSI 2504 Course

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Page 1 FINAL EXAMINATION Fall 2008 Student Name: __________________________________ Student Number:____________________ DURATION: 3 HOURS No. of Students: 77 BUSI 2504 Section: E Course Instructor(s) : Yuriy Zabolotnyuk AUTHORIZED MEMORANDA BA II Plus calculator. No other calculator is allowed. Hand-written notes on one side of 8.5” x 11” sheet. Students MUST count the number of pages in this examination question paper before beginning to write, and report any discrepancy to a proctor. This question paper has 12 pages. This examination question paper may not be taken from the examination room. In addition to this question paper, students require: an examination booklet no Scantron sheet yes Received Multiple choice questions: Do all questions Best 29 of 32 count towards your mark 1 - 32 – 58 marks ________ Problems: Do three of Q1 – Q4 Q1 –14 marks ________ Q2 –14 marks ________ Q3 –14 marks ________ Q4 –14 marks ________ Total – 100 marks ________
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Page 2 Do ALL 32 multiple choice problems. Two marks each to a maximum of 58 marks. 1. Which of the following are disadvantages of the partnership form of ownership? A) Personal liability and double taxation B) Personal liability and limited firm life C) Double taxation and limited firm life D) Ease of formation and unlimited firm life E) Ease of formation and ease of ownership transfer 2. Which one of the following would have the greatest present value, assuming a positive discount rate? A) $1,000 today plus $100 a month for 2 years B) $1,000 today plus $200 a month for a year C) $1,000 today plus $400 a month for six months D) $2,200 today plus $200 a month for six months E) $2,200 today plus $100 a month for a year 3. You are considering two projects with the following cash flows: Project A Project B Year 1 $2,500 $4,000 Year 2 3,000 3,500 Year 3 3,500 3,000 Year 4 4,000 2,500 Which of the following statements are true concerning these two projects? I. Both projects have the same future value at the end of year 4, given a positive rate of return. II. Both projects have the same future value given a zero rate of return. III. Both projects have the same future value at any point in time, given a positive rate of return. IV. Project A has a higher future value than project B, given a positive rate of return. A) II only B) IV only C) I and III only D) II and IV only E) I, II, and III only
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Page 3 4. Which of the following risks do debt ratings specifically attempt to assess? I. Interest rate risk II. Default risk III. The risk of a call being made A) I only B) II only C) I and II only D) II and III only E) I, II, and III 5. You own a bond that has a 7 percent coupon and matures in 12 years. You purchased this bond at par value when it was originally issued. If the current market rate for this type and quality of bond is 7.5 percent, then you would expect: A) the bond issuer to increase the amount of each interest payment on these bonds. B)
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This note was uploaded on 12/15/2010 for the course BUSINESS BUSI 2504 taught by Professor Georgekowaski during the Spring '10 term at Carleton CA.

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2504-final exam-20 - FINAL EXAMINATION Fall 2008 Student Name Student Number DURATION 3 HOURS Department Name Course Number BUSI 2504 Course

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