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FIN400 SUMMER I 2011 INSTRUCTOR: DR. Y. MA REVIEW FOR MID-TERM EXAM The exam covers Chapters 1, 4, 5, 12, 13, 17, and 20. The first part has 20 multiple- choice questions worth 2.5 points each. The second part has 4 problem-solving questions worth a total of 50 points. The following only serves as a general study guide for the exam. Chapter 1 (4 conceptual questions) 1. The concept of agency relationships and the factors affecting the agency problems. 2. The two basic types of agency problems and how to reduce these agency conflicts. 3. Sources of new capital and agency problems. Chapter 4 (5 conceptual questions) 1. Understand well the concept of call provisions and sinking fund provisions. 2. Be able to explain why the expected return may be different from the yield to maturity on a bond. 3. Bond interest rate risk and reinvestment risk and what factors affect them. Chapter 13 (3 conceptual questions) 1.Understand how to adjust for risk when evaluating a project/asset. 2.Understand how inflation effect should be taken into account in CF estimation and how
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This note was uploaded on 03/27/2012 for the course FINA 3320 taught by Professor Picou during the Summer '12 term at Texas A&M University, Corpus Christi.

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