Question 1
5 / 5 points
Which of the following items is NOT included in current assets?
Bonds.
Short-term, highly liquid, marketable securities.
Accounts receivable.
Cash.
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If a company owns bonds then they would be considered a long term ass
n1
5 / 5 points
If you randomly select stocks and add them to your portfolio, which of the following statements best
describes what you should expect?
Question options:
Adding more such stocks will increase the portfolio's expected rate of return.
Adding
ept
n1
5 / 5 points
Which of the following statements regarding a 20-year monthly payment amortized mortgage with a
nominal interest rate of 10% is CORRECT?
Exactly 10% of the first monthly payment represents interest.
The monthly payments will increase o
concept
stion 1
stion 3
5 / 5 points
If investors' aversion to risk rose, causing the slope of the SML to increase, this would have a greater
impact on the required rate of return on equity, r s, than on the interest rate on long-term debt, rd, for most
f
Question 1
0 / 5 points
Assume that the risk-free rate is 5%. Which of the following statements is CORRECT?
Question options:
If a stock's beta doubled, its required return under the CAPM would also double
If a stock's beta doubled, its required return un
nancialstatements
n1
5 / 5 points
The balance sheet is a financial statement that measures the flow of funds into and out of various accounts
over time, while the income statement measures the firm's financial position at a point in time.
True
False
Hide
ept
n1
5 / 5 points
Of the following investments, which would have the lowest present value? Assume that the effective
annual rate for all investments is the same and is greater than zero.
Investment A pays $250 at the end of every year for the next 10 ye
ncept
n1
8 / 8 points
One of the basic relationships in interest rate theory is that, other things held constant, for a
given change in the required rate of return, the the _ time to maturity, the the
_ change in price.
longer; smaller.
shorter; larger.
l
cept
n1
5 / 5 points
If Wolves Entertainment Company is acting in the best interests of stockholders (following
the primary goal of the firm), which of the following is the optimal (best) capital structure for
the firm?
Debt = 40%, Equity = 60%, EPS = $2.
bQuestion 1
5 / 5 points
Which one of the following is a source of cash?
increase in accounts receivable
decrease in common stock
decrease in inventory
decrease in accounts payable
decrease in long-term debt
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Sources of cash are decreases in
Question 1
5 / 5 points
Stocks A and B have the following data. The market risk premium is 6.0% and the risk-free rate is 6.4%.
Assuming the stock market is efficient and the stocks are in equilibrium, which of the following
statements is CORRECT?
Beta
A
Question 1
5 / 5 points
Match the Capital Budgeting Technique with the appropriate reinvestment rate assumption.
_3_ Payback Period
_2_ Modified Internal Rate of Return
_2_ Net Present Value
_1_ Internal Rate of Return
1. Internal Rate of Return
2. Weight
A bond that had a 20-year original maturity with 1 year left to maturity has more interest rate price risk
than a 10-year original maturity bond with 1 year left to maturity. (Assume that the bonds have equal
default risk and equal coupon rates, and they
Lewis_Amy
Financial and Operational Summary
Round 1
Finance Summary
After round 1 of operations Lewis_Amys financial position is moderately stable.
The current ratio and quick ratios both decreased significantly. The debt-to-equity increased and the asset
n1
n2
n3
5 / 5 points
Tracy invested $1,000 five years ago and earns 4 percent interest on her investment. By leaving her interest
earnings in her account, she increases the amount of interest she earns each year. The way she is handling
her interest inco
n1
5 / 5 points
The principle of diversification tells us that:
Question options:
concentrating an investment in two or three large stocks will eliminate all of the unsystematic risk.
concentrating an investment in three companies all within the same indu
ept
n1
n2
5 / 5 points
A U.S. Treasury bond will pay a lump sum of $1,000 exactly 3 years from today. The nominal interest
rate is 6%, semiannual compounding. Which of the following statements is CORRECT?
The PV of the $1,000 lump sum has a higher present
Lewis_Amy
Financial and Operational Summary
Round 3
Finance Summary
After round 3 of operations Lewis_Amys financial position is declining.
The current ratio and quick ratios both decreased significantly. The debt-to-equity and the assets-toequity ratios
Question 1
5 / 5 points
Which term relates to the cash flow which results from a firm's ongoing, normal business activities?
net working capital
cash flow from assets
cash flow to creditors
capital spending
operating cash flow
Question 2
5 / 5 points
Acco
Lewis_Amy
Financial and Operational Summary
Round 5
Finance Summary
After round 5 of operations Lewis_Amys financial position is rapidly declining.
The current ratio and quick ratios both decreased significantly. The debt-to-equity and the assets-toequity
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randomintro
Question 1
10 / 10 points
Which of the following factors would be most likely to lead to an increase in interest rates in the
economy?
Households reduce their consumption and increase their savings.
T
CH 1 1-3, 5-8
1) Define each of the following terms:
a. Proprietorship: an unincorporated business owned by one individual
Partnership: exists whenever two or more persons or entities associate to conduct a
noncorporate business for profit
Corporation: a
Chapter 3 Quiz Bank
Cavendish Company recently issued new common stock and used the proceeds to pay off some of its short-term
notes payable. This action had no effect on the company's total assets or operating income. Which of the
following effects would
Lewis_Amy
Financial and Operational Summary
Round 1
Finance Summary
After round 1 of operations Lewis_Amys financial position is moderately stable.
The current ratio and quick ratios both decreased significantly. The debt-to-equity increased and the
asset
CH 2 Q 1-4, 6-7, P 1-2, 4, 6, 10-11
Q1) Define each of the following terms:
a. Annual report: a report issued annually by a corporation to its stockholders. It contains basic
financial statements as well as managements opinion of the past years operations
CH 3 ALL
Q1) Define each of the following terms:
a. Liquidity ratios: a ratio that shows the relationship of a firms cash and other current assets to its
current liabilities
current ratio: indicates the extent to which current liabilities are covered by t
Lewis_Amy
Financial and Operational Summary
Round 6
Finance Summary
After round 6 of operations Lewis_Amys financial position is rapidly declining.
The current ratio and quick ratios both decreased significantly. The debt-to-equity decreased
significantly