2011_FM1_PraticeQuiz

2011_FM1_PraticeQuiz - PRACTICE QUIZ 1. One way often used...

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PRACTICE QUIZ 1. One way often used to insure that management decisions are in the best interest of the stockholders is to a) Threaten to fire managers who are seen as not performing adequately. b) Remove management's perquisites. c) Tie management compensation to the performance of the company's common stock price. d) Tie management compensation to the level of earnings per share. 2. In comparing an ordinary annuity and an annuity due, which of the following is true: a) the future value of an annuity due is always greater than the future value of an otherwise identical ordinary annuity. b) the future value of an ordinary annuity is always greater than the future value of an otherwise identical annuity due. c) the future value of an annuity due is always less than the future value of an otherwise identical ordinary annuity, since one less payment is received with an annuity due. d) all things being equal one would prefer to receive an ordinary annuity compared to an annuity due. 3. The future value of a dollar ______ as the interest rate increases and ______ the farther in the future an initial deposit is to be received. a) decreases; decreases b) decreases; increases c) increases; increases d) increases; decreases 4. What is the rate of return on an investment of $124,090 if the company expects to receive $10,000 per year for the next 30 years? a) 7 percent b) 4 percent c) 1 percent d) 0 percent 5. The ______ is a statistical measure of the relationship between series of numbers. a) coefficient of variation b) standard deviation c) correlation d) probability 6. The goal of an efficient portfolio is to a) maximize risk for a given level of return. b) maximize risk in order to maximize profit. c) minimize profit in order to minimize risk. d) minimize risk for a given level of return. 7. Perfectly ______ correlated series move exactly together and have a correlation coefficient of ______, while perfectly ______ correlated series move exactly in opposite directions and have a correlation coefficient of ______. a) negatively; 1; positively; +1
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b) negatively; +1; positively; 1 c) positively; 1; negatively; +1 d) positively; +1; negatively; 1 8. Sopp Accounting Services has an outstanding issue of 1,000 shares preferred stock with a $100 par value, an 8 percent annual dividend, and 5,000 shares of common stock outstanding. If the stock is cumulative and the board of directors has passed the preferred dividend for the last two years, how much must preferred stockholders be paid prior to paying dividends to common stockholders? 9. On December 31, 1998, the Bradshaw Corporation had $485,000 as an ending balance for its retained earnings account. During 1999, the corporation declared a $3.50/share dividend to its stockholders. The Bradshaw Corporation has 35,000 shares of common stock outstanding. When the books were closed for 1999 year end, the corporation had a final retained earnings balance of $565,000. What was the net profit earned by Bradshaw Corporation during 1999? 10. In an effort to analyze Clockwork Company finances, Jim realized that he was missing
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This note was uploaded on 03/09/2012 for the course MBA 101 taught by Professor Xxx during the Spring '12 term at Xavier.

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2011_FM1_PraticeQuiz - PRACTICE QUIZ 1. One way often used...

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