Finance Test 1

The future value of a lump sum investment will increase if you

increase the time period

The systematic risk principle states that the expected return on a risky asset depends only on the asset's _____________blank risk.

market

Which one of the following is a capital structure decision?

Establishing the preferred debt equity level

Which one of the following will increase the present value of a lump sum future amount to be received 15 years?

a decrease in the interest rate

The shareholders of Qiang's Markets would benefit if the firm were to be acquired by Better Foods. However, Weil's board of directors rejects the acquisition offer. This is an example of:

an agency conflict

Which one of the following is a correct statement, all else held constant?

the future value is directly related to the interest rate