INVESTMENT 0F PENSION MONEY (PART 1)
indy started working at Sunshine Consultancy
LServices recently but she is already thinking
about how to invest her pension money. Sunshine
uses Blue Rock Financial Services as its pension
Chapter 14: Dividends and Dividend Policy
Dividends and Dividend Policy
1. Payments made out of a firm's earnings to its owners in the form of cash or stock are called:
C) Share re
Chapter 15: Raising Capital
Topic: VENTURE CAPITAL
1. The financing provided for start-up, often high-risk, private business enterprises is called:
A) Venture capital.
B) Junk bonds.
C) Flotation costs.
Chapter 16: Short-Term Financial Planning
Short-Term Financial Planning
Topic: OPERATING CYCLE
1. The length of time between the acquisition of inventory and the collection of cash from
receivables is called the _.
A) operating c
Chapter 17: Working Capital Management
Working Capital Management
Topic: SPECULATIVE MOTIVE
1. The need to hold cash to take advantage of additional investment opportunities is called the:
A) Speculative motive.
Chapter 18: International Aspects of Financial Management
International Aspects of Financial Management
Topic: AMERICAN DEPOSITORY RECEIPT
1. A security that is issued in the United States that represents shares of a foreign stoc
Peterson Real Estate Company is a company en
gaged in the business of purchasing and selling
real estate, including land and buildings, and renting
property. The company earns a profit every year and
the shareholders are sati
0/E/N INDIA LTD.
stablished in 1968, O/E/N lndia Ltd. is the mar-
Eket leader for electromechanical components in
India. Its plants are located in the suburbs of Cochin
and Bangalore. The company engages in the produc-
tion of a wide range of
ntarctic, Inc. was founded by Joseph and Jessie
Lee. They equally own the company and each
has 50,000 shares of stock. The company manufac-
tures and installs cooling systems. The company has
experienced spectacular growth because of rapi
eter Teo graduated from university with an ac
Pcounting degree and joined an investment bank
as an analyst. After having worked at the investment
bank for years, Peter would like to pursue a fulltime
MBA degree at either one of
Chapter 13: Leverage and Capital Structure
Leverage and Capital Structure
Topic: HOMEMADE LEVERAGE
1. The use of personal borrowing to change the overall amount of financial leverage to which the
individual is exposed is called:
Chapter 12: Cost of Capital
Cost of Capital
Topic: COST OF CAPITAL
1. The opportunity cost associated with the firm's capital investment in a project is called its:
A) Cost of capital.
B) Beta coefficient.
C) Capital gains yield.
Chapter 3: Working with Financial Statements
Working with Financial Statements
Topic: SOURCES OF CASH
1. Activities of the firm that generate cash are known as:
A) Sources of cash.
B) Uses of cash.
C) Cash payments.
D) Cash receip
Chapter 4: Introduction to Valuation: The Time Value of Money
Introduction to Valuation: The Time Value of Money
Topic: FUTURE VALUE
1. The amount an investment is worth after one or more periods of time is the _.
A) future value
Chapter 5: Discounted Cash Flow Valuation
Discounted Cash Flow Valuation
1. An annuity stream of cash flow payments is:
A) A set of level cash flows occurring each time period for a fixed length of time.
B) A set of
Chapter 6: Interest Rates and Bond Valuation
Interest Rates and Bond Valuation
1. The stated interest payment, in dollars, made on a bond each period is called the bond's:
B) Face value.
Chapter 7: Equity Markets and Stock Valuation
Equity Markets and Stock Valuation
Topic: GROWING PERPETUITY
1. An asset characterized by cash flows that increase at a constant rate forever is called a:
A) Growing perpetuity.
Chapter 8: Net Present Value and Other Investment Criteria
Net Present Value and Other Investment Criteria
Topic: NET PRESENT VALUE
1. The difference between the market value of an investment and its cost is the:
A) Net present va
Chapter 9: Making Capital Investment Decisions
Making Capital Investment Decisions
Topic: INCREMENTAL CASH FLOWS
1. The changes in the firm's future cash flows that are a direct consequence of accepting a project
Chapter 10: Some Lessons from Capital Market History
Some Lessons from Capital Market History
Topic: RISK PREMIUM
1. The excess return required on a risky asset over that earned on a risk-free asset is called (a):
A) Risk premium
Chapter 11: Risk and Return
Risk and Return
1. A portfolio is _.
A) a group of assets, such as stocks and bonds, held as a collective unit by an investor
B) the expected return on a risky asset
C) the expected r
Chapter 2: Financial Statements, Taxes, and Cash Flow
Financial Statements, Taxes, and Cash Flow
Topic: BALANCE SHEET
1. The financial statement showing a firm's accounting value on a particular date is the:
A) Income statement.