Finance in Sport Final Review
True
The Gross Domestic Sports Product (GDSP) is the market value of a nation's output of sport-related goods and services in a given year.
False
The Single entity structure is used by MLB, NBA, NHL, and the NFL
Income Statement
The _____ shows the organization's income over a specified period of time.
Auction-Rate bonds
For this type of bond, the annualized interest rate on the bonds is reset at auctions held every 7 to 35 days.
False
Gift financing is a minor source of operating income for major collegiate sports programs.
Liquidity Premium
If it is expected that it will be hard to sell a security, which of the following will be added?
Greater Than
In general, the chances of receiving back an investment in a large market Major League Baseball team is _____ that for a small market team.
National Football League
In its policies regarding deferred salaries, which of the following leagues has stated that deferred payments must be placed by the team in a league fund for administration and future disbursement?
Market Value
An estimation of an organization's worth according to the stock market is.
False
Antitrust Law applies to single-entity sport leagues
True
Distributed club ownership model leagues are sometimes structured as non-profit organizations.
Capital Finance, Operating Budgets, League loan pools
One source of risk is current economic conditions. Of the following, which is impacted by changes in current economic conditionS?
Major League Baseball
Other than __________, sport leagues in the United States are subject to the Sherman Act
Risk of Time
Risk increases as the length of time funds are invested increases. What is this known as?
True
The largest grouping of sports businesses is within NAICS 71, the Arts, Entertainment, and Recreation segment.
St. Louis Spirits
The owners of which franchise agreed to a perpetuity when they negotiated to fold their team after the ABA and NBA merger.
True
The single entity structure is used by Major League Soccer.
False
The sport industry is classified as an industry by the U.S Census Bureau.
True
The sport industry relies on the discretionary income of spectators and participants.
Gift
This type of financing includes charitable donations, either cash or in-kind, made to an organization and is the primary source or operating and investing income for major collegiate sports programs.
Financial Management
Three interrelated sectors exist within finance. The goal or outcome of those working in which of the following sectors is to acquire and secure funds to maximize shareholder-wealth?
A) Money and Capital Markets B) Investments C) Financial Management D) Derivative Trading E) None of the Above B
Three interrelated sectors exist within finance. Which of the following sectors focuses on security choices made by individual and institutional investors as portfolios are being built?
Discount Rate
What is a measure of risk or uncertainty of time?
Level of Risk
What is determined by comparing the risk of one asset to another?
Debt
When an organization borrows money that must be paid back over time, usually with interest, what kind of financing is being used?
Maturity Risk Premium
When calculating the nominal interest rate, which of the following premiums is added to account for the risk of time and interest rate risk?
Statement of Cash Flows
Which financial statement tracks cash in and cash out of an organization over a specified period of time?
Balance Sheet
Which of the following is a picture or snapshot of the financial condition of an organization at a specific point in time?
Net Profit Margin
Which of the following is a profitability ratio that measures the percentage of an organization's total sales or revenues that was net profit or income?
Price-to-earnings ratio
Which of the following is an estimate of how much money investors will pay for each dollar of the organization's earnings?
A) Inflation Rate B) Interest Rate C) Business Activity Rate D) Development Rate E) Discount Rate A
Which of the following is calculated by investigating changes in the consumer Price Index (CPI)?
Taxation
Which of the following is not one of the three key components of a balance sheet?
The real-risk-free rate plus an inflation premium
Which of the following is the nominal or quoted risk-free-rate of interest?
Risk Premium
Which of the following is the rate of return required over and above the risk-free-rate?
Present Value
Which of the following is today's value of a future cash flow?
Return on Equity
Which of the following measures the return rate an organization's owners or shareholders are receiving on their investments?
Real Value
Which of the following refers to the purchasing power of a dollar?
Phoenix Coyotes
Which of the following was the first major professional sports team to declare bankruptcy in the middle of a long-term facility lease?
Current Ratio
Which ratio is an indication of whether an organization can meet its current liabilities---those due within a year---with its current assets?
Debt Ratio
Which ratio measures how an organization finances its operation with debt and equity?
Inventory Turnover Ratio
Which ratio measures how often an organization sells and replaces its inventory over a specified period of time?
False
Yankee Stadium was financed by the team using a form of equity financing.
