{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Exam1_sample_questions

Exam1_sample_questions - FINA 363 Sample Exam Questions...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
FINA 363 °Sample Exam Questions Introductory Concepts 1. Which of the following statements is incorrect ? (a) Maximizing the stock price (or shareholder wealth) is the main objective of a manager, but she/he sometimes strays from this goal due to agency problems. (b) According to the Fisher equation, the real interest rate is usually negative when the nominal interest rate is higher than expected in°ation. (c) The ±ask²price is the price at which dealers sell securities and is higher than the ±bid²price. (d) NASDAQ is an example of the over-the-counter (OTC) market. 2. In ³nancial markets, dealers maintain inventory and quote ±bid²and ±ask²prices. The bid price is the price at which dealers securities (e.g. from/to you) and is than the ask price. The Time Value of Money 3. You put $20 ; 000 in a college trust fund for your children today. In order for the balance of the fund to become $50 ; 000 eighteen (18) years from today, what average annual rate of return ( i ) must this fund earn? 4. If the interest rate is 8% per year (annual compounding), what is the future value of $8 ; 888 eight years from today (at the end of 8 th year)? 5. In order to support your daughter´s (son´s) college education, you decide to save a ³xed amount in a college trust fund at the end of every year for eighteen (18) years. You would like to have $80 ; 000 in the fund eighteen (18) years from today. When the average annual rate of return on the fund is 5 percent, how much do you need to save each year? 1
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
(a) $1 ; 847 (b) $2 ; 136 (c) $2 ; 844 (d) $4 ; 444 (e) $6 ; 844
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern