1. Discuss the fundamental theorem of valuation. What are the three main steps in the
valuation process? Explain how market forces transform such values into security
The value of an asset or security is the present value of its expected future ca
Problem Set 1 on Risk and Return
1. You purchase 400 shares of AOL at $50 on an initial margin of 60%. What will be the margin and your
return if the price drops to $48 or rises to $65? If the maintenance margin is 35% calcul
Fin 6515-Security Analysis Midterm Exam STUDY GUIDE
Investment Choices (HANDOUT) Historical U.S. returns for major securities. Know Hi & Lo
Bonds in NonUS market = US Market in 2010 (also Bond Market > Equity Market 2010)
Equity in US market sim
Fin 6515 (Securities Analysis: Stocks) Final Exam Study Guide
Valuation of Stocks etc.
Fundamental theorem of valuation
The value of an asset or security is the present value of its expected future cash flows
(profitability). In equilibrium, the
101. Chapter 2: The Risk of Fraud and Mechanisms to Address Fraud: Re (1.0 poi
The auditor is not responsible for the presentation of financial statements; t
herefore, the auditor has no responsibility for fraud in the financial stateme
521. Chapter 6: A Framework for Audit Evidence Question TF #1 (1.0 point)
Audit evidence is also referred to as an audit opinion.
522. Chapter 6: A Framework for Audit Evidence Question TF #2 (1.0 point)
The amount of evidence gathered i
Special deterrence results when punishment of a wrongdoer deters other persons from committing similar
When Congress created the U.S. Sentencing Commission and charged it with creating sentencing
guidelines, Congress so
Under the stakeholder theory of corporate social responsibility, employees' interests are considered.
Profit maximization is most like a deontological theory.
Rights theory concerns itself with the costs and benefit
The tort of negligent hiring is distinct from tort liability predicated upon the doctrine of respondeat
Special duties that run from possessors of real estate to those who enter the property are called "premises
The essence of a contract is that it is a legally enforceable promise or set of promises.
Contracts must always be in writing to be enforceable.
UCC was designed to deal with sale of goods and may not sufficiently a
The U.S. Constitution recognizes the states' power to make law in certain areas.
Uniform acts are model statutes drafted by private bodies of lawyers and/or scholars; they become law only
after legislature enacts them.
Under the power of judicial review, courts cannot declare the actions of other governmental bodies
Congress cannot invalidate state laws that are passed pursuant to the state's police power.
The three requirements for a valid offer are: present intent to contract, definiteness and communication to
Strictly speaking, a contract has nothing to do with the personal intent of the parties.
The burden of proof in a tort case is a preponderance of the evidence.
A Tort is civil wrong which is also the same as breach of contract.
Generally speaking, statements made during judicial proceedings are absolute
629. Chapter 7: Planning the Audit: Identifying and Responding to the (1.0 poi
Materiality relates to the significance or importance of an item.
630. Chapter 7: Planning the Audit: Identifying and Responding to t 2 (1.0 poi
721. Chapter 8: Specialized Audit Tools: Sampling and Generalized Aud (1.0 poi
Audit sampling implies the gathering of evidence to use as a basis for making
valid inferences about the characteristics of the population as a whole withou
t examining eve
Chapter 9: Auditing the Revenue Cycle Question TF #1 (1.0 point)
The revenue cycle considered by auditors includes the sales process but not co
836. Chapter 9: Auditing the Revenue Cycle Question TF #2 (1.0 point)
OVERVIEW OF FINANCIAL REPORTING, FINANCIAL
STATEMENT ANALYSIS, AND VALUATION
1.1 Value Chain Analysis Applied to the Timber and Timber Products Industry. Exhibit 1.A
below contains a depiction of the value chain. The links in the value chain are
Chapters 6 and 8
On 1/1/14 Would Company leases manufacturing equipment to Should Corp. The equipment
has a book value of $55,000 and a fair value of $60,000. The capital lease agreement requires
Class Examples Free-Cash Flow Valuation
Common Equity Share Value
1. Use the following information adapted from P12.6 for Coca Cola Company:
The required rate of return for common equity is 8 percent.
Assume a steady growth rate of 3
51.4 Accountants Liability to Third Party
The one that best applies to Touche Ross and Company is the foreseeability standard. In this standard the
liability of the accountant is not dependent on their knowledge of the identity of either the user or the i
A contract is an agreement between two or more people. It is enforceable by law making it a
binding legal agreement. It is important to note that it is part of the broader law o
329. Chapter 4: Professional Liability and the Need for Quality Audit (1.0 poi
Under Common Law, liability concepts are developed through court decisions bas
ed on negligence, gross negligence, or fraud.
330. Chapter 4: Professional
225. Chapter 3: Internal Control over Financial Reporting: Management (1.0 poi
Internal control is a process designed to guarantee the achievement of the obj
ectives of reliable financial reporting, compliance with laws and regulations
417. Chapter 5: Professional Auditing Standards and the Audit Opinion (1.0 poi
The auditing standards issued by the PCAOB are identical to the auditing stand
ards issued by the AICPA.
418. Chapter 5: Professional Auditing Standards a
1. Chapter 1: Auditing: Integral to the Economy Question TF #1 (1.0 poi
The need for assurance services arises because the interests of the use
rs of information may be different from that of the interests of those
responsible for providing informatio
Tim was late for a client meeting and exceeded the speed limit on the road. He was caught for speeding and
was given a ticket. However, Tim denied the allegation. The case will now be scheduled for a trial at the
United States is a first to file nation.
Even though no one else had developed an invention like that of the patent applicant, the application will be
denied if, at the time of the invention, the invention would have been obvious
Adjusted R Square 0.716030661