Final_Exam_Comm_308_Winter_2009_Solution

Final_Exam_Comm_308_Winter_2009_Solution - Print Last Name:...

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Version: Blue Solution Page 1 of 18 Print Last Name: Print First Name: ID Number: COURSE FINANCE NUMBER COMM 308/4 SECTIONS: ( Circle your section) CC, DD, H, I, J, K, L, M EXAMINATION Final Exam VERSION BLUE DATE April 20, 2009 TIME 3 hours # OF PAGES 18 including cover INSTRUCTOR: ( Underline your instructor’s name) A. Ahmad R. Jassim J. Kellett R. Mateti K. Souleiman S. Ullah DIVISION John Molson School of Business Concordia University READ THESE SPECIAL INSTRUCTIONS CAREFULLY You are allowed one 8.5x11 sheet of paper (double sided); You may write, type, draw or copy anything on this sheet. This is Version BLUE of the test. You must submit a BLUE computer answer sheet. For Multiple Choice Questions, All answers must be recorded IN PENCIL on the computer sheet. For Problems: All answers must be recorded within this exam. Show your calculations to earn part marks. Write in the space provided. Cell phones must be turned off, programmable calculators and PDAs are not allowed. Please ensure you have 18 pages (including cover) in this exam. Fill in your name and other required information IN PENCIL on the Computer Answer sheet as well as on this cover sheet. Blank questions or those with multiple answers will not receive credit. REMINDER: Put your Name and ID on (1) this exam; (2) computer answer sheet and (3) Your Crib Sheet. Hand in this exam, computer sheet and your Crib Sheet.
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Multiple Choice: answer on the BLUE computer answer sheet Version: Blue Solution Page 2 of 18 Part I: Multiple Choice Questions (25 Questions, 70 Points Total): - This part consists of 10 concept questions and 15 calculation problems. - Each concept question counts 2.5 points for a total of 25 points and each calculation problem counts 3 points for a total of 45 points. - Only answers on the computer answer sheet will be graded. - Use a pencil to mark your answers. - Select only one answer per question, blank or multiple answers will not receive credit. - You are encouraged to also circle your answer on the exam sheet as a back up. A. Concept Questions (10 Questions, 2.5 Points Each) 1. Ten years ago, the Sheila Kangaroo Company issued debt with a face value of $50,000. The debt has a yield to maturity of 4%. The coupons are paid once per year. If the market price of the debt is $35,000, then the coupon rate is: A) Less than 4% B) Equal to 4% C) Greater than 4% D) Cannot be determined, we need the time to maturity of the debt. 2. Assume that the CAPM holds. If a security has a beta of 1, its expected return is: A) 0 percent B) the risk-free rate C) the return on the market portfolio D) Can’t be determined with the above information 3. The concept of an efficient market implies: A) All shares of stock have the same expected returns. B)
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Final_Exam_Comm_308_Winter_2009_Solution - Print Last Name:...

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