Finance F-100
Which of the following is NOT one of the three big corporate finance questions? a) What should we buy (Capital Budgeting)? b) How should we pay for it (Capital Structure)? c) How much should be pay managers (Executive Compensation)? d) What should we do with any profits (Reinvest vs. Dividends)?
How much should be pay managers (Executive Compensation)?
According to F100 class sessions, there are three big questions for finance professionals to answer. We've addressed these in multiple class sessions, most recently during Week #10. What are those three big questions? a) What are the company's future cash flows, what is the weighted average cost of capital (WACC), and what is the resulting present value of this cash flows? b) What should the company invest in, what proportion of debt and equity should the company use, and what is the best arrangements for the company's on-hand cash? c) What businesses should the company be in, how much capital should be allocated to each of its business divisions, and how should the resulting cash be invested? d)What should the company invest in, how should the company finance its investments, and how should the free cash flows be allocated (or distributed)?
d)What should the company invest in, how should the company finance its investments, and how should the free cash flows be allocated (or distributed)?
Interest rates and bond prices are... a) unrelated. b) set by the Federal Reserve. c) closely linked, so that bond prices rise if interest rates rise. d)inversely related.
d)inversely related.
Ensuring the company's ability to meet current and future financial obligations in a timely and cost-effective manner is related to which of the following treasury management objectives? a) Maintain liquidity b) Optimize cash resources c) Maintain access to short-term financing d) Maintain investments
a) Maintain liquidity
The two financial economists who researched and published on capital structure are... a) Modigliani and Miller (M&). b) Merton and McKenzie (M&M) c) Fama and Roll. d) Fama and Jensen.
a) Modigliani and Miller (M&).
The Check 21 Act of 2003 was legislation that primarily focused on what area? a) Payment systems and instruments b) Protection of consumers c) Regulation and supervision of financial institutions d) Financial crimes & money laundering
a) Payment systems and instruments
The finance professional who is primarily responsible for arranging external financing and managing relationships with banks and other financial institutions is the a) Treasurer b) CFO c) Cash Manager d) Controller
a) Treasurer
Handshake is... a) a platform for connecting Kelley students with recruiters. b) a networking platform for connecting Kelley students with Kelley alumni. c) a site sponsored by the Undergraduate Career Services packed with various resources related to careers.
a) a platform for connecting Kelley students with recruiters.
Kelley Connect is... a) a site of many resources available for Kelley students. b) a series of networking opportunities for Kelley students and Kelley alumni. c) a platform for connecting Kelley students with recruiters.
a) a site of many resources available for Kelley students.
Inflation throughout the 1970s averaged... a) about 7%. b) about 14%. c) about 10%. d) about 5%.
a) about 7%.
According to class session, the basic job responsibilities of a financial analysts consist of... a) analyzing the financial status pf the company by collecting, monitoring and studying data, as well as by recommending actions. b) working with the company's bankers in order to properly analyze how well the firm is meeting loan obligations. c) analyzing the financial performance of the company by conducting ratio and trend analysis on the company's quarterly and annual financial statements. d) analyzing the financial performance of competitors and publishing competitor analysis reports.
a) analyzing the financial status pf the company by collecting, monitoring and studying data, as well as by recommending actions.
Credit default swaps (CDS) contributed significantly to the 2007-2008 financial crisis... a) because they fueled the MBA pipeline as many banks with large portfolios of MBSs began to treat them as in the same risk class as US Treasuries. b) when the US government declared CDSs risk-free. c) when they began to be used as currency, very similar to how cryptocurrency is used today. d) because the US Treasury kept buying nearly all of them prior to the crisis.
a) because they fueled the MBA pipeline as many banks with large portfolios of MBSs began to treat them as in the same risk class as US Treasuries.
US government T-bills are priced at a discount. For example, if a one-year T-bill worth $1,000 is priced at a 5.0% discount, an investor would... a) buy it for $950. b) sell it when it matures at $950. c) receive a profit only if the government keeps the T-bill outstanding for more than a year. d) receive a profit only if it can be sold for more than $1,000.
a) buy it for $950.
Say that Apple buys Netflix. This would be an example of... a) company growing inorganically. b) a target capital structure. c) a pure ego-based acquisition. d) a company growing organically.
a) company growing inorganically.
Which of the following careers was noted during class sessions as hiring the largest number of Kelley finance majors? a) corporate finance b) investment banking c) accounting d) consulting
a) corporate finance
US Government T-Bills are securities bought and sold... a) in the commercial paper market. b) in the stock market. c) in the money market. d) only by the Federal Reserve.
a) in the commercial paper market.
Clients of investment management firms are typically... a) institutional investors and individual investors - usually high net worth individuals but also many normal net worth individuals. b) insurance companies and pension plan companies. c) individuals with wealth of at least $1 million. d) educational institutions and foundations.
a) institutional investors and individual investors - usually high net worth individuals but also many normal net worth individuals.
An asset bubble... a) is any unusual and extended rise in asset prices. b) happens when any prices rise more than 10% a year. c) is always a stock market phenomenon.
a) is any unusual and extended rise in asset prices.
According to class presentation, stand-alone risk consists of... a) standard deviation + diversifiable risk. b) market risk + diversifiable risk. c) market risk + the company's standard deviation. d) market risk + inflation risk.
a) standard deviation + diversifiable risk.
Which of the following was not one of the examples discussed in class of commercial real estate projects? a) the renovation of Penn Central Station in New York b) Bloomington's new public parking garage c) a public parking garage in Miami d) The Avenue apartment building in Bloomington
a) the renovation of Penn Central Station in New York
It's important for your resume to demonstrate you have some kind of engagement at IU, even though you will have been on campus for only a few weeks. In class sessions, we further explained that... a) you don't have to join just a business or finance club. Exploring other kinds of groups at IU will be just fine. b) you must join the Financial Services Club first before considering other clubs or organizations. c) recruiters are only going to care about clubs or organizations that are finance or business-related. d) you should choose something only in finance or business.
a) you don't have to join just a business or finance club. Exploring other kinds of groups at IU will be just fine.
Defining just what investment management firms are and do is difficult. Which of the following are some reasons for this presented in class session? Choose all that apply. a) Some IM firms offer their own products, such as mutual funds, while others don't. b) Some IM professionals work alongside investment banking professionals under the same corporate umbrella. c) There are very large IM firms and very small ones. d) There is often overlap in functions with investment banking firms. e) There are large generalists in IM and small specialists.
a,c,d,e
The current asset financing strategy that must continually roll-over short-term sources to finance some portion of permanent assets is known as what? a) Maturity Matching Policy b) Aggressive Policy c) Relaxed Policy d) Conservative policy
b) Aggressive Policy
The largest investment manager according to assets under management is... a) Vanguard Group b) BlackRock c) JP Morgan Chase d) Blackstone
b) BlackRock
This important credential for finance professional s requires completing three, six-hour exams. a) CPA b) CFA c) CFP d) CFMA
b) CFA
If you become a finance major, how many courses are the minimum required for electives? a) Three typical courses, worth at least 9 credits. b) Four typical courses, worth at least 12 credits. c) Six typical courses, worth at least 18 credits. d) The finance major does not include any electives.
b) Four typical courses, worth at least 12 credits.
Which of the following items are included in the traditional 3-way match of the A/P vouchering process? I. Purchase Order II. Shipping Manifest III. Receiving AdviceI V. Catalog Pricing V. Invoice VI. Remittance Information a) II, IV and V b) I, III and V c) I, II and VI d) I, V and VI
b) I, III and V
What are the key services that a commercial bank must provide? I. Charge high fees for accounts II. Accept deposits III. Provide safety deposit boxes IV. Make commercial loans V. Have both a lobby and a drive-through a) I, II, III, IV & V b) II & IV c) I, II and III d) I, III and V
b) II & IV
Which stage of money laundering involves a series of financial transactions designed to separate cash proceeds from their criminal or terrorist origins? a) Inegration b) Layering c) Taxation d) Placement
b) Layering
When a corporation decides that it wants to buy another company, no matter what the cost, this is usually an example of what? a) The company has done a full discounted cash flow analysis to determine the right price b) Management ego or hubris c) The company has done a careful analysis of all similar deals to determine the right price d) The company has done careful analysis of all similar companies to determine the right price
b) Management ego or hubris
The difference between the interest rate at which a bank lends to borrowers and the interest rate the bank pays to depositors is known as: a) Gross Profit Margin b) Net Interest Margin c) Default Margin d) Deposit Insurance Margin
b) Net Interest Margin
Economies of scale are designated as what kind of synergy? a) Diversification b) Operations c) Financial d) Management
b) Operations
Should you consider a minor to accompany your finance or real estate major? a) The only minor finance or real estate majors will have time to fit in their schedules in accounting. b) Sure. But as a Kelley major, you must minor in a subject outside the business school. c) Sure. Good minors for you might be international business, accounting, management, and entrepreneurship. d) No. The business major requirements are extensive, and most students will not have enough time in four5 years to pick up a minor.
b) Sure. But as a Kelley major, you must minor in a subject outside the business school.
Which of the following is not a feature of the US Federal Reserve system, as noted in the video available in the class slides? a) The Fed plays a role in supervising US banks. b) The Board of Governors is based in New York. c) The Fed manages the money supply. d) There is a 7-member Board of Governors and 12 regional Federal Reserve banks.
b) The Board of Governors is based in New York.
Which of the following factors will have an impact on a company's days' receivables? a) The average number of days needed to convert raw materials into finished goods b) The average number of days required to convert a credit sale into a collection c) The average number of days finished goods remain in inventory d) The average number of days raw materials remain inventory
b) The average number of days required to convert a credit sale into a collection
Financial managers generally demand that anything their company invests in must return at least some minimally acceptable rate. According to a recent class session, the rate that must be met or surpassed is also called... a) a minimum rate. b) a hurdle rate. c) a benchmark rate. d) a demand rate.
b) a hurdle rate.
To simplify what an investment management career is all about, it might be helpful to consider it as... a) analyzing industry trends in order to recommend acquisition opportunities. b) helping clients invest their money or wealth. c) helping companies restructure. d) helping clients bring stocks or bonds to market to raise needed capital.
b) helping clients invest their money or wealth.
The investment management firm, Guggenheim was used in class session to... a) illustrate the breadth of entry-level investment management jobs. b) illustrate portfolio management. c) illustrate equity analysis. d) illustrate internships at a small investment management firm.
b) illustrate portfolio management.
According to class presentation, stocks have two kinds of investment risk. These are stand-alone risk and... a) bankruptcy risk. b) portfolio risk. c) standard deviation. d) price risk.
b) portfolio risk.
According to class session on the D'Leon case, financial statements that project details into the next year or so are called... a) pending financials. b) proformas. c) accruals. d) Doppler forecasts.
b) proformas.
A normal yield curve is one in which... a) long-term rates are falling if inflation is rising. b) short-term interest rates are lower than long-term interest rates. c) short-term rates are higher than long-term rates. d) junk bonds are in higher demand than US Treasuries.
b) short-term interest rates are lower than long-term interest rates.
One of the bright spots in attempts to improve diversity in financial services is... a) the appointment of a woman to head up JP Morgan Chase. b) the appointment of Jane Fraser as CEO of Citi. c) a statistic showing that 40% of all entry-level positions are now held by women.
b) the appointment of Jane Fraser as CEO of Citi.
In F100 class sessions, we saw how it was possible to buy an iPhone in LA and sell it in Nagoya, Japan and end up with a profit due to exchange rates. The profit seemed relative small, however, especially when transactions costs are considered. This example in class was meant to illustrate.. a) the law of FOREX trading. b) the law of one price. c) the principle of pegged exchange rates. d) the principle of managed float exchanged rates.
b) the law of one price.
The stock market crash in 1929 is dramatic because... a) the market fell 25% on Black Thursday in October 1929. b) the market fell 25% across four days. c) the market did not recover from its 1929 high until five years later. d) the market did not recover from its 1929 high until 10 years later.
b) the market fell 25% across four days.
The short video played in class framed the idea of entrepreneurship as... a) the process of identifying pain points that can then be addressed with new products or services. b) the process of identifying unhappiness and developing a business to make some people happier. c) the process of identifying innovations that can help solve business and social problems.
b) the process of identifying innovations that can help solve business and social problems.
Mortgage backed securities usually had various tiers related to... a) the geographic area in the US of the homes financed with mortgages. b) the risk of the mortgages included in the pool. c) an arbitrary ranking determined by the US Treasury. d) the type of lender which originated the mortgage.
b) the risk of the mortgages included in the pool.
Companies return cash to shareholders whenever... a) company growth falls below 10.0%. b) there is more cash than is needed to invest in growth opportunities. c) it needs to reduce its tax rate. d) it has too many positive net present value projects.
b) there is more cash than is needed to invest in growth opportunities.
During multiple class sessions, instructors noted that the most important step freshman should take right now is... a) to join the Financial Services Club and try to become an officer or committee chair. b) to learn how to study at IU and make good grades. c) to enroll in the online version of F210 for the summer semester.
b) to learn how to study at IU and make good grades.
Which of the following items below is a description of the difference between accounting and finance as addressed in F100 class sessions? a) Accounting is about matching revenues with key investments; finance is about documenting cash flows. b) Accounting is about depreciation and amortization; finance is much more about cash flow from investments. c) Accounting is about documenting past activities and performance; finance is about plans and decisions for the future. d) Accounting is about preparing financial statements; finance is about finding profit.
c) Accounting is about documenting past activities and performance; finance is about plans and decisions for the future.
According to class session, what was one of the signs of a potential bubble in commercial real estate in the early and mid 2000s? a) Effective tax rates on property income had risen to historic highs. b) Cap rates were rising. c) Cap rates were falling. d) Effective tax rates on property income had fallen to historic lows.
c) Cap rates were falling.
The business bankruptcy chapter that is used if a business is considered to be worth more alive than dead is: a) Chapter 7 b) Chapter 9 c) Chapter 11 d) Chapter 13
c) Chapter 11
All of the following are typical uses for ACH debits, EXCEPT: a) Tax payments b) Utility payments c) Direct deposit of payroll d) Cash concentration
c) Direct deposit of payroll
Which of the following would be considered an External Collaboration for the finance and treasury areas? I. Internal Audit II. Accounts Receivable III. Financial Markets IV. Suppliers and Customers V. Regulatory Agencies a) II and IV only b) I, II and IV only c) III, IV and V only d) All would be considered external
c) III, IV and V only
This person founded the first investment bank in Philadelphia in order to help fund the American Civil War. a) John Pierpont Morgan b) Cornelius Vanderbilt c) Jay Cooke d) Bejamin Franklin
c) Jay Cooke
What was the game used in the clip from the Big Short to illustrate the problems in the real estate and mortgage-back securities market? a) Hungry Hippo b) Pick-Up-Sticks c) Jenga d) Operation
c) Jenga
According to the discussion in class, the worst merger of two large companies is considered to be... a) Citibank and Traveler's Insurance b) AOL and Time Warner c) Kmart and Sears d) Amazon and Whole Foods
c) Kmart and Sears
All of the following statements are true, EXCEPT: a) A shared services center is a department or operation within a multi-unit organization what supplies multiple business units with specialized services. b) Few companies operate a fully decentralized treasury operation. c) Most treasury functions are set up as a profit center. d) In-house Banks are typically most beneficial for complex, multinational organizations.
c) Most treasury functions are set up as a profit center.
Which of the following statements regarding billing and collection methods is FALSE? a) Effective A/R management includes increasing invoicing float as much as possible b) The major objective of collection policy is to convert A/R into cash quickly while minimizing collection expense and bad debt loss. c) None of the statements listed here are false d)Clear collection policies should be established and enforced
c) None of the statements listed here are false
According to class sessions, which of the following is the best (of those available) explanation of one of the key strategies for helping the D'Leon company have a better year in 2020? You Answered a) Change the recent long-term debt issues into short-term debt, since short-term debt usually has lower interest rates. b) Sell the pecan stores the company had opened and use the funds from those sales rot invest back into the company. c) Obtain more equity capital from shareholders in order to pay down some of the debt capital that had increased recently. d) Expand the product line from pecan-based snacks and into other popular snacks such as cakes, Cajun chips, and nachos.
c) Obtain more equity capital from shareholders in order to pay down some of the debt capital that had increased recently.
Which of the following statements is NOT correct regarding the information provided in an aging schedule? a) The report separates accounts receivables into current and past-due receivables using set period. b) The report identifies past due accounts which may become less collectible with the passage of time. c) The report is calculated by dividing outstanding accounts receivable at the end of period by the average daily sales for that period. d) Allows for accounts receivables to be analyzed by either time categories (aggregate) or by individual customer.
c) The report is calculated by dividing outstanding accounts receivable at the end of period by the average daily sales for that period.
Angel investors are usually... a) part of a hedge fund. b) part of a venture capital firm. c) an individual investor. d) family and friends of the startup founders.
c) an individual investor.
What are the three basic choices for investments, according to class presentation? a) stocks, bonds, and commodities b) stocks, capital markets, and cash c) cash, bonds, stocks d) capital markets, currencies, and commodities
c) cash, bonds, stocks
The role of the commercial real estate developer was defined in class session as... a) supervising the commercial real estate construction. b) primarily devoted to finding investors in a project. c) creating and executing the vision of making a property productive. d) primarily devoted to financing a project.
c) creating and executing the vision of making a property productive.
There are only two sources of capital. These are... a) debt and cash. b) equity and US government securities. c) debt and equity. d) common stock and preferred stock.
c) debt and equity.
It makes good sense that a company's basic return on assets should be greater than... a) its return on free cash flow. b) its operating profit margin c) its return on equity. d) its cost of capital.
c) its return on equity.
A simple way to think about accrual accounting is that... a) determining the free cash flow generated by a company's operations. b) depreciation is determined based on how many years a piece of equipment is likely to be used. c) revenues are matched up with the relevant costs. d) leading to a calculation of free cash flow.
c) revenues are matched up with the relevant costs.
The returns paid to investors are effectively... a) costs of capital to the company. b) higher only if the company is mature and well established. c) risk free. d) he same returns made by the market overall.
c) risk free.
According to the class presentation, asset allocation is about... a) thinking of your wealth portfolio not only in terms of your savings and investments, but also in terms of all your assets, such as cars, homes, and household items. b) creating portfolios that have about 60% stocks, 20% bonds, and 20% commodities. c) selecting a mix of investments appropriate for your risk tolerance, financial goals, and time horizon. d) selecting a mix of investments equally allocated to bonds, stocks, and cash.
c) selecting a mix of investments appropriate for your risk tolerance, financial goals, and time horizon.
Earnings per share (EPS) indicates... a) the amount of company cash flow per share of common stock. b) EBIT / shares outstanding of common stock. c) the amount or company profit per share of common stock. d) net investment from each shareholder and per share of common stock.
c) the amount or company profit per share of common stock.
If British consumers and/or businesses increase their demand for the US dollar - and little else of significance changes - then it is likely that... a) the value of the dollar relative to the British pound will weaken. b) the price of the US dollar in euros will rise. c) the value of the dollar relative to the British pound will strengthen. d) the price of the US dollar in euros will fall.
c) the value of the dollar relative to the British pound will strengthen.
REITS are especially popular among some kinds of investors because... a) they are one of the few convenient investments with dividends that are taxed at low rates in order to encourage real estate development. b) they have a track record of steady price appreciation. c) they pay a substantial portion of profits to shareholders as dividends. d) they experience one of the highest growth rates outside of the tech industry.
c) they pay a substantial portion of profits to shareholders as dividends.
One of the aspirational goals of the commercial real estate broker in Denver was... a)to be recognized as one of the top real estate brokers in Denver. b) to establish his own commercial real estate company so that he can hire and train young professionals c) to earn enough to invest in his own properties and earn passive income. d) to succeed well enough that he might have his own name on his developments, as Donald Trump does.
c) to earn enough to invest in his own properties and earn passive income.
According to class presentation, the primary role of financial institutions is... a) to help investors choose the right investment product. b) to bring company bonds and equity to market. c) to intermediation of funds. d) to provide loans and other services to consumers.
c) to intermediation of funds.
Say the Thailand government was concerned about the weakening of its currency, the baht. To boost the price of the baht, the Thai government would mostly likely... a) use baht to buy the US dollars, increasing demand and price of the baht. b) use the Japanese yen to buy the baht, increasing demand and the price of the baht. c) use US dollars to buy the baht, increasing demand and price for the baht. d) sell the baht in foreign exchange markets, increasing demand and price of the baht.
c) use US dollars to buy the baht, increasing demand and price for the baht.
How did the US government effectively bailout the big banks? a) According to the video clip played in class, the US Federal Reserve acted in the last minute to buy shares in all the major banks and become a secret partner. b) According to the video clip played in class, the US government created a separate agency to buy up all of the mortgages owned by the nine biggest banks. c) According to the video clip played in class, the US government forced all the big banks to take a large injection of capital, whether or not the banks were actually in trouble. d) According to the video clip played in class, the US government forced 12 major banks to consolidate into just eight.
c)According to the video clip played in class, the US government forced all the big banks to take a large injection of capital, whether or not the banks were actually in trouble.
According to the class lecture on the 2007/08 financial crisis, what government agency was an early developer of the straight pass through pools of conforming mortgages? a) Office of the Comptroller of the Currency b) Consumer Financial Protection Bureau c)Federal Reserve d) Government National Mortgage Association (Ginnie Mae)
d) Government National Mortgage Association (Ginnie Mae)
Probably somewhat surprising from the class session in entrepreneurial finance was this: a) Less than 1.0% of startups succeed after the first two years. b) Only about 1 in 10 startups receive funding from angel investors. c) About 15.0% of startups begin in dorms rooms. d) Less than 1.0% of startups raise venture capital.
d) Less than 1.0% of startups raise venture capital.
The local startup covered in class that uses an app to help small businesses stay in touch with their customers is... a) Doriot b) Townee c) Civic Champs d) Local Networks
d) Local Networks
Large payments that are time-sensitive are typically paid via what type of system? a) ACH b) Checking c) Cash d) RTGS
d) RTGS
Which of the following is not an important advantage of debt financing? a) The firm owner retains complete ownership. b) The cost of debt is less than the cost of equity. c) Lenders can provide value-added services and advice. d) The firm owner can cancel the debt within six months with no penalty.
d) The firm owner can cancel the debt within six months with no penalty.
What was the biggest acquisition made by Amazon? a) Ring b) Zappos c) Metro-Goldwyn-Mayer d) Whole Foods
d) Whole Foods
The primary business-to-business payment system in most countries outside of the U.S. is: a) Cash at time of purchase b) Check in the mail c) Credit card d) Wire transfer
d) Wire transfer
Which of the following is not one of the specific job responsibilities of the financial analyst, as covered in an F100 class session? a) determines cost of operations b) analyze actual results versus plans and forecasts c) protects confidentiality of company information d) acts as liaison with the company's commercial bank e) works with databases and models
d) acts as liaison with the company's commercial bank
A typical liquidity event for investors in a growing company is... a) obtaining a 2.0 or greater current ratio. b) reaching prototype stage. c) reaching $100,000 in revenues. d) an IPO.
d) an IPO.
If you can buy an asset in one market and sell it right away for a higher price in another market, then you may have made... a) a eurotrade. b) a portfolio profit. c) a market rate of return. d) an arbitrage profit.
d) an arbitrage profit.
The mix between fixed-income (debt) and equity (stock) is a key decision in the management of a long-term portfolio and is known as (according to class presentations)... a) blended investing. b) preferred stock. c) portfolio assessment. d) asset allocation.
d) asset allocation.
The accounting identity or equation is... You Answered a) assets = liabilities + cash flow. b) cash flow in one year = cash flow from previous period + changes in cash flow from the current period. c) shareholders' equity = assets + liabilities. d) assets = liabilities + equity.
d) assets = liabilities + equity.
Both the career plan and resume assignments should be submitted... a) in only a .docx format. b) in any of the several popular formats. c) via email to your course TA. d) in .pdf file format.
d) in .pdf file format.
According to class sessions, inflation... a) is created when central banks let the money supply shrink. b) is a result of an imbalance between imports and exports. c) is a result of companies and consumers creating too high a demand for goods and services. d) is a monetary phenomenon: too many dollars.
d) is a monetary phenomenon: too many dollars.
Anyone can make good investments and end up with positive returns - with profits. The thing about arbitrage profit is that it is... a) not enough to cover transactions costs. b) mostly limited to the risk-free rate. c) dependent on the Fed funds rate. d) mostly guaranteed due to differences in prices.
d) mostly guaranteed due to differences in prices.
Venture capitalists are usually... a) the providers of initial seed capital. b) startup founders looking for initial funding. c) individual investors. d) professionals collaborating inside a formal venture capital firm.
d) professionals collaborating inside a formal venture capital firm.
Which of the following was presented in class as, typically, having access to greater investment management resources and opportunity to specialize? a) buy side analysts b) BlackRock analysts c) M&A consultants d) sell side analysts
d) sell side analysts
Government T-Bills are considered to be... a) are priced at a premium, or priced at something greater than $1,000. b) riskier than money market funds. c) risky because in the short-term the US government could decide to not pay the interest due. d) the benchmark for risk-free rates
d) the benchmark for risk-free rates
Companies return cash to shareholders whenever... a) it has too many positive net present value projects. B) it needs to reduce its tax rate. C) company growth falls below 10.0%. d) there is more cash than is needed to invest in growth opportunities
d) there is more cash than is needed to invest in growth opportunities
If you negotiate a deal with a fledging new business for a loan qualified as senior debt, then... a) you have authority to shut the company down if the product or service doesn't meet your business standards. b) you must be an older investor. c) you probably play golf in Florida during winters. d) you will get paid before any other debt the young company might have.
d) you will get paid before any other debt the young company might have.
The key step in the payment process where banks or other parties exchange the payment information in order to transfer money between themselves is know as what? a) Clearing b) Settlement c) Payment Instructions d) Payment Generation
a) Clearing
Which of the following regulatory bodies was created after the financial crisis of 2007-2008? a) Consumer Financial Protection Bureau (CFPB) b) Federal Reserve (FED) c) Federal Deposit Insurance Corporation (FDIC) d) Office of the Comptroller of the Currency (OCC)
a) Consumer Financial Protection Bureau (CFPB)
Which of the pairs of courses listed below are important finance courses required of all majors after I-Core? a) F303 and F305 b) F311 and F312 c) F370 and F371 d) F210 and F310
a) F303 and F305
In our discussion of the Timken case, what was the rating on their bonds at the time of the acquisition? a) BBB b) B c) A d) AA
a) BBB
A combination of two firms that produce the same products and/or services is known as what kind of merger? a) Horizontal b) Conglomerate c) Vertical d) Congeneric
a) Horizontal
