midterm3_practice

midterm3_practice - FINAL: PRACTICE EXAM Name (no...

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FINAL: PRACTICE EXAM 1 out of 9 Name (no nicknames, please): ________________________________________ Circle your Section # : XXX XXX XXX (XXX – XXX) (XXX – XXX) (XXX – XXX) 1. You are only allowed to have with you a pen/pencil and a calculator (no books, notes, computers, phones, etc). Extra scratch paper will be provided if you need it. You must have your own calculator (no sharing). 2. Round your interim work and final answers to the nearest three decimal places, and write your final answer in the provided boxes. You must show work where applicable. 3. You have 120 minutes to complete the exam. There are XXX pages and 20 questions. Maximum possible score is 100 out of 100. True/False (4 points each / Total = 32 points) 1. For stocks, the number of short positions must equal the number of long positions. True False 2. If two positive-NPV projects are mutually exclusive, you should pick the one with the higher NPV. True False 3. If the IRR of a project is positive, then the project must have a positive net present value. True False 4. Suppose the firm is thinking about buying shares of stock X. In an efficient market, this is a positive NPV investment. True False 5. In making capital budgeting decisions, we should ignore opportunity costs since they are not actual cash outflows. True False 6. If the firm uses its WACC to evaluate all potential projects, then it will likely over-estimate the value of a high-risk project. True False 7. Individuals who trade more frequently tend to outperform individuals who follow a buy-and-hold strategy. True False 8. Whether or not the underlying stock pays dividends, an American call option is always more valuable the longer its time to expiration. True False
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FINAL: PRACTICE EXAM 2 out of 9 Multiple Choice (4 points each / Total = 12 points) 9 . Consider a European put option where the underlying stock pays dividends. Which of the following is positively associated with the put premium: A. Time to expiration
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midterm3_practice - FINAL: PRACTICE EXAM Name (no...

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