Self Study Questions  ANSWERS
TOPIC 3  VALUATION
PART 2  EQUITY
Question 1
How much extra would the share price be for two otherwise identical
securities with each having just paid a dividend of $0.20 p.a. per share,
but where one company has positive
BAFI 3184 FINAL
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TOPIC
ITEM
TOPIC
ONE
INTRODUCTION
The corporate objective and corporate financial
decisions
Financial assets and capital markets
The flow of funds and capital markets
Maximisation of the wea
Topic Two part 2
First Principles of
Valuation: The Time
Value of Money
Annuity Due
0
1
2
3
The cash flows occur at the beginning of each
year, rather than at the end of each year.
This is an annuity due.
Present Value Annuity Due
Annuity Due
0
1
2
3
0
TOPIC
10:
INVESTMENT
DECISION MAKING
& EVALUATION
Aim
As was shown in topic two businesses facilitate largescale production by pooling the
economic resources of households. In doing so investment will be made in capital
projects, characteristically invol
Feedback Forum Questions
Topic 2 Time Value of Money (Financial Mathematics)
Part 1
Question 1
An annuity in which the first cash flow occurs immediately is called a:
A) perpetuity
B) annuity due
C) deferred annuity
D) none of the above
Question 2
After t
Topic Two part 1
First Principles of Valuation: The Time
Value of Money
Overview
Distinguish between simple and compound interest.
Calculate the present value and future value of a single
amount for both one period and multiple periods.
Calculate the p
BAFI 1008 BUSINESS FINANCE
FORMULAE SHEET
1.
2.
FV = PV (1 + r )
n
FUTURE VALUE OF A SINGLE SUM
PRESENT VALUE OF A SINGLE SUM
PV = FV (1 + r )
n
3.
(1 + r )n 1
FV = PMT
r
FUTURE VALUE OF AN OR ANNUITY
4.
1 (1 + r ) n
PV = PMT
r
PRESENT VALUE OF AN OR
Topic Two part 1
First Principles of Valuation: The Time
Value of Money
Overview
Distinguish between simple and compound interest.
Calculate the present value and future value of a single
amount for both one period and multiple periods.
Calculate the p
The NPV Investment Evaluation Process
Step 1  Calculate depreciation
Step 2  Calculate any gain/loss on disposal
Step 3  Calculate taxable income, i.e. profit or loss
Step 4 Calculate the tax item, i.e tax bill or rebate
Step 5  Calculate net cas
FEEDBACK FORUM
TOPIC 5  RISK AND RETURN
PART 2
Question 1
Beta can be described as a measure of:
a) The sensitivity of a shares return to the return on the market
b) The share price sensitivity to changes in interest rates
c) The combination of business
Business Finance Tutorial Topic 4 Capital Budgeting Part 2
Question 1
Which of the following is an incorrect statement regarding project evaluation analysis?
a) Depreciation results in a cashinflow
b) The book gain on disposal of an asset results in a ca
Topic 7 Capital Structure
Overview
This topic is concerned with the issue of whether there exists an Optimal
Capital Structure, one that maximizes the value of the firm.
In order to address the issue, one needs to first examine the effect on equity
holder
Topic 5
Risk and Return part 2
Opportunity Set
Expected
Return
Opportunity
Set
P
Opportunity Set
Rebel
Sport P/F
Expected
Return
CBA P/F
Eastpac P/F
Billabong P/F
Alpha Sport P/F
PMA P/F
ALG P/F
P
Efficient Frontier
How does an individual choose among all
Tutorial 1 (Chapters 1 and 2)
1.14
Numbers & Associates provide their client, Oak Ltd, with the following professional
services: * List if they are an assurance service or not
(a) Identification of new risks that arise from a changing business environment
Commercial Law Week 3 Tute problem answers
1. Distinguish between
(a) Common Law and Equity
Equity developed because of perceived (and actual) rigidities and injustices in the
common law in medieval times.
Litigants appealed to the Lord Chancellor who wou
Self Study Questions
TOPIC 3  VALUATION
PART 2  EQUITY
Question 1
How much extra would the share price be for two otherwise identical
securities with each having just paid a dividend of $0.20 p.a. per share,
but where one company has positive dividend g
FEEDBACK FORUM
TOPIC 3
VALUATION
PART 1  BONDS
Question 1
A debt security has four years to maturity, pays $1000 in annual interest and has a
face value of $10,000. The required rates of return are 4% for the first year, 6% for
the second year, 3% for th
Self Study Questions
TOPIC 3
VALUATION
PART 1  BONDS
Question 1
A debt security has four years to maturity, pays $1000 in annual interest and has a
face value of $10,000. The required rates of return are 4% for the first year, 6% for
the second year, 3%
SelfStudy Practice Questions
Topic 2 Financial Mathematics  Part 1
Question 1
After two years a $10,000 investment earning 8% p.a. compounded six monthly will
accumulate to
a)
b)
c)
d)
$11,600
$11,664
$11,699
$12,597
Question 2
A finance company offers
Tutorial for Lecture 3 AD and AS (Chapter 3)
Multiple Choice Questions
1. The level of GDP that corresponds to full employment in the labour market is called: A.
potential GDP.
B. real GDP.
C. nominal GDP.
D. natural GDP.
E. structural GDP.
2. Most econom
Tutorial for Lecture 2 Big Events and Recent Themes (Chapter 20)
Multiple Choice Questions
1. The crash in the US stock market on Tuesday 29 October 1929 is commonly seen as indicating
the beginning of:
A. the Great Recession.
B. the Great Depression.
C.
Tutorial for Lecture 4 AS Details (Chapter 4)
Multiple Choice Questions
1. The stylised link between GDP growth and changes in unemployment over the business cycle is
called:
A. the Laffer curve.
B. the Friedman curve.
C. the Phillips curve.
D. the law of
Tutorial for Lecture 1 Introduction to Macroeconomics (Chapters 1, 2)
Multiple Choice Questions
1. Which of the following is NOT a central issue in macroeconomics? A.
How should we deal with inflation?
B. What is responsible for high and persistent unempl
Auditing Tute 2
1.14
Assurance Service:

Final reports are not biased
Info is reliable
Review financial reports
Chapter 1 key words: a practioner expresses a conclusiondefinition assurance engagement
The financial statements and judgement are presented f
Tutorial for Lecture 5 Policy Basics (Chapter 5)
Multiple Choice Questions
1. Which of the following variables are typically seen as policy targets?
A. Output, inflation, interest rates.
B. Output, inflation, unemployment.
C. Output, inflation, unemployme
1
Commercial Law
Week 5 Causing Harm: Negligence
Answers to Selected Problems
Problem 1: Outline the elements necessary to prove to succeed in the tort of negligence.
Discussed in week 4 tutorial.
Problem 2: How do we test whether one person owes another
1
Commercial Law Week 4 Tute problem answers
1. What is a "tort"? How does it differ from a "crime"?
Tort is the French word for wrong and in English legal language relates to a wrong causing
another harm. Tort law is concerned with compensating a victim
Feedback Forum
Topic 7
Capital Structure
Question 1
Booster Ltd has a net operating income of $30,000 p.a. If the required rate of return of equity holders is 10%, and the company tax rate is 34%, what is the value of
Booster Ltd?
a) $340,000
b) $300,000
BUSINESS FINANCE BAFI3184
TOPIC 24 REVIEW QUESTIONS Multiple Choice
TOPIC 2  Present Value, Future Value, Annuity & Perpetuity
1.
For a given amount, the greater the discount rate, the less the present value.
A.
True B.
False
2.
Perpetuity is another te
TUTORIAL AND SELF STUDY QUESTIONS
BAFI 3182
FINANCIAL MARKETS
In this document you will find tutorial and selfstudy questions.
The tutorial questions are selected questions highlighted in yellow, you will have
to prepare solutions for this question for y
The Derivatives Market
BAFI 3182
FINANCIAL MARKETS
Topic 7
Overview
Nature of the market
Participants
Uses of derivatives
Forwards
Futures
Swaps
Options
What is a derivative?
A financial asset which derives its value from the
value of some other a
Topic 6
The stock market
Websites:
www.asic.gov.au
www.asx.com.au
www.nyse.com
Part 1: Role of the stock
market
The Nature of a Corporation
The Stock Exchange
The Private Equity Market
Initial public offering
Equity funding for listed companies
Summary
Th
The Changing Financial System and
Role of Financial Institutions
FINANCIAL MARKETS
Topic 8
Overview
Regulatory features of the Australian Financial
System
Causes of change in the financial system
Effects of change upon the financial system
Australian
The Money Market
FINANCIAL MARKETS
Topic 3
Topic 3 Money Markets
Contents
Nature, features and functions
Participants
Instruments traded  domestic
Pricing of Money Market instruments
Use of data and information
Instruments traded  global financial
The Flow of Funds and
Determination of Interest Rates
Topic 2A
Overview
Sectors of the financial system
The flow of funds between sectors
The nature of interest rates
Interest rate calculations
Determination of the level of interest rates
Determinat