Question 2
In an efficient market the purchase of financial assets would represent a zero NPV
project.
Answer
True (This is the correct answer)
False
Question 3 shares
A non-redeemable preference share is paying a constant dividend of $7. What is the curr
Question 2
The difference between a nominal interest rate and an effective
interest rate is expected inflation.
Answer
True
False
Question 3
What is the Present Value of an amount of $4,000 to be received in
3 years if the rate is 13% p.a.? Your answer sh
EFN 406
Quiz 9
XYZ Corporation has just paid a dividend of 56 cents per share. The current
market price of the share is $15 and shareholders require a return of 10 % pa.
What is the annual growth rate (g) of the dividends? Answer as a percentage
accurate
Quiz 9
Polycorp has a debt equity ratio of 0.67. What is the correct debt ratio D/V that should be
used in the WACC formula?
WACC = ke x E/V + kd x (1-t) x D/V
Provide an answer as a decimal accurate to two decimal places eg 60.156% should be
entered as .
Review Test Submission: Module 01 Quiz
Content
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Anh Tung Vo
Managerial Finance
Module 01 Quiz
26/02/15 4:35 PM
5/03/15 7:42 AMLate
1/03/15 11:30 PM
Completed
0 ou
Question 1
0.5 out of 0.5 points
In general, a downward-sloping term structure implies that investors expect future shortterm interest rates to:
Selected Answer:
decrease.
Answers:
none of the given options.
decrease.
be the same as the current rate.
inc
Question 1
2 out of 2 points
Given the information in the table below calculate the standard deviation of a portfolio
combining Asset A and Asset B in the proportions of 40% and 60%, respectively. A
correlation of .5 exists between A and B.
Asset SD Weig
Question 1
0.5 out of 0.5 points
When working out the cash flows to calculate an NPV or an IRR the project's after tax
interest expense should be subtracted from the cash flows for:
Selected
Answer:
neither the NPV calculation nor the IRR calculation
Ans
Question 1
0.5 out of 0.5 points
Descartes's rule of sign states that there can be as many positive solutions to IRR as there
are changes in sign of the cash flows of the project.
Selected Answer:
Answers:
True
True
False
Question 2
0.5 out of 0.5 points
EFN406: MANAGERIAL FINANCE
Assignment: Part B, Capital Budgeting
Solution
2016 1
_
_
Answer the two problems below (P1 and P2). Five marks each. Part marks will be allocated, but if
you have the incorrect answer then you cannot expect to get more than hal
Question 1
0 out of 1.5 points
Calculate the cost of preference capital (kp) for a non-redeemable preference share which
has the following:
Price = $15 and a Preference dividend of $1.9 paid every six months. Your answer
should the effective annual cost
Question 1
0 out of 0 points
This online quiz is an individual assessment. Your answers should be your own work and
should not be the result of work done by others.
Selected
Answer:
I UNDERSTAND and AGREE that this is an individual assessment and
will su
Question 1
1.5 out of 1.5 points
Calculate the AE given a project with an outlay of -2000 and cash flows of 1500 per
year for 5 years. The discount rate is 0.12. The rate is given as a decimal (eg .12 is 12%).
Answer to the nearest dollar. Do not enter t
Question 1
0 out of 0 points
This online quiz is an individual assessment. Your answers should be your own work and
should not be the result of work done by others.
Selected
Answer:
I UNDERSTAND and AGREE that this is an individual assessment and
will su
EFN 406 quiz 9 Semester 2, 2016
Question 2
A Limited has just issued a bond with face value of $1000 and a coupon rate of 8%. If the
bond has a life of 15 years, pays annual coupons and the YTM is 7.5%, what will the bond
sell for?
$1044
$1020
$957
$1051
Finance Quiz 8
Sem 2, 2016
Question 1- The annual nominal rate is j m = 0.12pa. What is the effective annual rate
as a percentage to two decimal places? The number of compounding periods is 6.
Enter your answer as a decimal eg 17.42% = .1742 to four decim
Quiz 3
Question 2
In an efficient market the purchase of financial assets would represent a zero NPV project.
Answer
True (This is the correct answer)
False
Question 3 shares
A non-redeemable preference share is paying a constant dividend of $7. What is t
Question 1
A weak-form efficient market can best be described as a market in which:
Answer
a
.
b
.
c
.
d
.
e
.
all publicly available information is fully reflected in share
prices.
trends in prices can be exploited
trading strategies based on past inform
Question 1
A Limited has just issued a bond with face value of $1000 and a
coupon rate of 8%. If the bond has a life of 15 years, pays annual
coupons and the YTM is 7.5%, what will the bond sell for?
Answer
a $10
. 44
b $95
. 7
c $10
. 51
d $11
. 62
e $10
Question 2
The value of an option in excess of its intrinsic value is known as:
Answer
a current
.
value
b
.
excess
value
c
.
exercise
value
d
.
strike
value
e time
.
value
Question 3
Only buyers of futures are required to put down a deposits, and are mar
Question 1
0 out of 0.5 points
Using discounted payback. A conventional project that has a discount payback
period less than its useful life cannot have a negative NPV.
Selected Answer:
False
Answers:
True
False
Response Feedback: incorrect
Question 2
0.5
Question 1
0 out of 1 points
What is the beta of an asset with an expected return of 16%, if the risk-free rate of
interest is 6% and the expected market portfolio risk premium is 6%? Accurate to
two decimal places.
Selected Answer:
d.
0
Answers:
a.
2
b.
Question 1
0 out of 0 points
This online quiz is an individual assessment. Your answers should be your own work
and should not be the result of work done by others.
Selected
Answer:
I UNDERSTAND and AGREE that this is an individual assessment
and will sub
Question 1
0 out of 0 points
This online quiz is an individual assessment. Your answers
should be your own work and should not be the result of work
done by others.
Selected
Answer:
Answers:
I UNDERSTAND and AGREE that this is an
individual assessment an
Question 1
0.5 out of 0.5 points
In an efficient market the current price is:
Selected Answer:
c.
neither too low nor too high
Answers:
a.
none of the given answers
b.
always higher
c.
neither too low nor too high
d.
the prices do not change
e.
always low
Question 1
1.5 out of 1.5 points
Given the data below, calculate the net present value of an infinite chain of
replacement using the equivalent annual value method. Assume the cost of capital
is 11% p.a.
Initial Outlay Year 1 Year 2 Year 3
-$10,000
$10,00
Question 1
0.5 out of 0.5 points
When using the CAPM to estimate the cost of equity for evaluation of investment
proposals, the appropriate substitute for the risk free rate of interest is:
Selected
Answer:
Answers:
c.
The yield on a government security w
Question 1
0.5 out of 0.5 points
The writer of an option is the:
Selected Answer:
e.
initial seller of the option
Answers:
a.
both buyer of the put option and buyer of the call option
b.
taker of a put option
c.
taker of a call option
d.
owner of the opti
Question 1
1 out of 1 points
Benefit-cost ratio is calculated by:
Selected
Answer:
Answers:
d.
dividing the present value of future net cash flows by the initial
outlay.
a.
dividing the outlay by the present value of future net cash flows.
b.
dividing the