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Exam3 FIN370 Fall 2008 B Key

# Exam3 FIN370 Fall 2008 B Key - Exam3 FIN370 Fall 2008 Key...

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Exam3 FIN370 Fall 2008 Key Version B 1. The common stock of Whole Foods has produced returns of 9 percent, 13 percent, 11 percent, -6 percent, and 5 percent for the past five years, respectively. What is the standard deviation of these returns? A. 8.49 percent B. 7.54 percent C. 7.08 percent D. 6.99 percent E. 8.33 percent BLOOMS TAXONOMY QUESTION TYPE: APPLICATION LEARNING OBJECTIVE NUMBER: 1 LEVEL OF DIFFICULTY: INTERMEDIATE Ross - Chapter 010 #66 SECTION: 10.4 TOPIC: STANDARD DEVIATION TYPE: PROBLEMS 2. What is the expected return on a security given the following information? A. 6.50 percent B. 13.70 percent C. 11.98 percent D. 11.64 percent E. 8.90 percent BLOOMS TAXONOMY QUESTION TYPE: APPLICATION LEARNING OBJECTIVE NUMBER: 1 LEVEL OF DIFFICULTY: BASIC Ross - Chapter 011 #52 SECTION: 11.1 TOPIC: EXPECTED RETURN TYPE: PROBLEMS

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3. The Furnishings Co. has ending net fixed assets of \$67,100 and beginning net fixed assets of \$43,800. During the year, the firm sold assets with a total book value of \$9,500 and also recorded \$7,000 in depreciation expense. How much did The Furnishings Co. spend to buy new fixed assets? A. \$23,300 B. \$32,800 C. \$39,800 D. \$6,800 E. \$16,300 BLOOMS TAXONOMY QUESTION TYPE: APPLICATION LEVEL OF DIFFICULTY: BASIC Ross - Chapter 002 #58 SECTION: 2.1 TOPIC: FIXED ASSETS TYPE: PROBLEMS 4. The cash flows of a new project that result from a reduction in the cash flows from a firm's existing projects are called: A. a sunk cost. B. pirated flows. C. an opportunity cost. D. replicated flows. E. erosion. BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGE LEARNING OBJECTIVE NUMBER: 1 LEVEL OF DIFFICULTY: BASIC Ross - Chapter 009 #5 SECTION: 9.2 TOPIC: EROSION TYPE: DEFINITIONS 5. Which one of the following correctly defines the average accounting return? A. average book value divided by average cash flow B. average cash flow divided by average book value C. average book value divided by average market value D. average book value divided by average net income E. average net income divided by average book value BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGE LEARNING OBJECTIVE NUMBER: 2 LEVEL OF DIFFICULTY: BASIC Ross - Chapter 008 #4 SECTION: 8.3 TOPIC: AVERAGE ACCOUNTING RETURN TYPE: DEFINITIONS
6. Kid's Toys has sales of \$549,000, a profit margin of 5 percent, and a capital intensity ratio of 1.2. What is the total asset turnover rate? A. .59 B. .83 C. 1.70 D. 1.27 E. .20 BLOOMS TAXONOMY QUESTION TYPE: APPLICATION LEARNING OBJECTIVE NUMBER: 2 LEVEL OF DIFFICULTY: BASIC Ross - Chapter 003 #69 SECTION: 3.2 TOPIC: TOTAL ASSET TURNOVER TYPE: PROBLEMS 7. A 7 percent bond has a yield to maturity of 6.75 percent, 10 years to maturity, a face value of \$1,000, and semiannual interest payments. What is the amount of each coupon payment? A.

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Exam3 FIN370 Fall 2008 B Key - Exam3 FIN370 Fall 2008 Key...

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