SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question.
16) An investment of $20,000 today has the following possible outcomes:
Probability
50%
30%
20%
16)
Value in one year
$22,000
$22,400
$22,800
Calculate the
24) If an investment offered a nominal return of 10%, and inflation was 15.8% over the period,
what was the real return on this investment? Round your answer to the nearest tenth of a
percent.
A) + 4.8%
B) + 0.9%
C) - 13.6%
D) - 5.0%
24)
Answer: D
25) An
53) Project A has a net present value of $1,500, a payback period of 2 years, and an internal rate of
return of 12%. Project B has a net present value of $1,800, a payback period of 4 years, and an
internal rate of return of 10%. Project C has a net prese
13) Refer to the information above. What was your coupon yield ? Round your answer to the
nearest tenth of a percent.
A) 9.5%
B) 9 basis points
C) 9.0%
D) Both B and C are correct.
13)
Answer: C
14) One hundred basis points equal
A) 1%
B) 10%
14)
C) 100%
25) A level- coupon bond has a yield- to- maturity of 10%. In order for an investor to be assured an
average annual yield of 10% on his investment in the bond, which of the following is NOT
necessary?
A) The investor must reinvest all the coupon payments
55) If you are the CEO of a corporation, and the market is at least semistrong efficient, then
A) you can create value for your own firm by merging with other firms even if they are
correctly priced since this provides diversification benefits for your sh
SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question.
9) How is the cost of a machine treated differently by a financial analyst doing an NPV
analysis and an accountant preparing financial statements?
9)
Answer
SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question.
52) Use a spreadsheet to calculate the variances and standard deviations of the expected
returns for the following two securities as well as the covariance
18) Refer to the information above. Based on your analysis, which of the securities is (are)
underpriced?
A) Security A and Security D
B) Security B and Security C
C) Security D
D) Security A
18)
Answer: C
19) The risk- free rate is 5%, and the expected r
47) The CFO for a medical supplies company observed that an advertising campaign touting its
wide range of available products resulted in the doubling of profits for the company. On the
other hand, he observed that increasing the firm's customer service r
23) The bid price for Sun Microsystems (JAVA) is currently $16.22 and its ask price is $16.23. Your
broker charges a commission of $13 per transaction. What are the total costs of buying and
selling 1,000 shares of JAVA as a percentage of the invested dol
60) Refer to the information above. What is the implied annualized interest rate on a 2 - year bond
that is issued at the end of year 5?
A) 23.79%
B) 11.30%
C) 4.57%
D) 9.35%
60)
Answer: C
61) What is the Macaulay duration of a $1,000, zero- coupon bond t
24) H&H Incorporated currently pays a dividend of $2.00 a share. These dividends are expected
to grow at a rate of 5% for the next three years, after which the dividend is expected to remain
constant. If investors require a 12% return, at what price shoul
SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question.
23) What are the traditional classifications of efficient markets and what does each level
imply?
23)
Answer: The three traditional classifications are weak
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
55) The empirical evidence suggests that
A) growth stocks tend to outperform value stocks when their relative market risks are
considered.
B) small stoc
SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question.
57) A stock currently pays a dividend of $0.10. This dividend is projected to grow at 40%
for the next five years, after which it is expected to grow at 5%
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
52) According to the Altman study, which premium is dominant in stated corporate bond yields?
A) tax premium
B) default premium
C) liquidity premium
D)
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
51) A non- recourse loan is one in which
A) the lender can force repayment of the loan at any time, and the borrower must comply.
B) the borrower pays t
17) If a stock's returns tend to move in the opposite direction of the general stock market, its
market- beta will be
A) equal to 0.0.
B) a negative number.
C) greater than 1.0.
D) a nonsensical number.
17)
Answer: B
18) A stock has a market- beta of 2.65
The Green Acres Lawn Company produces and sells lawn care products, such as fertilizers, seeds, and lawnmowers.
Its market-beta is 1.30. It is considering diversifying into the manufacture of snowblowers to offset the seasonality
of its current product li
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
22) Which of the following securities will provide the greatest diversification benefit for your
portfolio?
Security
1
2
3
4
22)
Correlation of returns
Exam
Name_
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1) Which of the following statements is true?
A) Valuation is not an exact science.
B) The relative value of any asset is, at best, a lucky g
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
56) Which of the following statements is true?
A) There is no necessary connection between a firm's growth rate and the rate of return you
should expect
55) A firm is worth $5 million, and you own 500 shares worth a total of $5,000. If the firm
repurchases $1 million of its shares for their fair market value, what will the value of your
shares then be?
A) $3,750
B) $5,000
C) $4,000
D) This cannot be deter
WHEN THE FED YIELDS
DYNAMICS AND IMPACT OF U.S. RATE RISE
MAY 2015
BLACKROCK
INVESTMENT
INSTITUTE
Summary
The U.S. labor market is strengthening , inflation appears to have troughed and financial
markets are looking frothy. What happens when the Federal R
`
Accounting for Business
Lecture 10
Costing the Full Cost of Products
and Services
This Lecture draws upon
Chapter 7: pp 235-239 (half way down)
Chapter 8: pp 268-289 (half way down)
AFB 2014-15
1
This Lecture introduces you to:
The need for a business
`
AFB
Lecture 5
The Trial Balance
AFB 2014/15
1
This Lecture introduces you to:
The systematic recording of transactions by
businesses within a formal bookkeeping system
using Revenue and Expense Accounts in addition
to Asset and Liability Accounts
The
`
Accounting for Business
Lecture 3
Financial Frameworks
For Financial Statements 1
This Lecture draws upon
Chapter 2: pp 32-63
BUT.
(of course!) it builds upon
the content of Lectures 1
and 2 + Seminar 1.
Accounting is a cumulativeAFB 2014-15
1
Outcomes:
Accounting for Business
Lecture 1
A)First Thoughts About the Module
B)First Thoughts About Financial Accounting
This Lecture draws upon
Atrill & McLaney Chapter 1
+ Chapter 4: pp 107-116
+ Moodle Tab Week 1 for PDF
reading FIRST THOUGHTS
ABOUT FINANCIAL
A