test 1
Everything else equal, when interest is paid more than once per year, the effective rate of return earned is _______ the effective rate that is earned when interest is paid only once per year.
A. less than Your Answer B. greater than C. equal to D. not related to
The role of a financial market is to bring together investors and _______.
A. savers B. lenders Your Answer C. borrowers D. those who have surplus funds
In recent times, the U.S. stock market has made up about ______ percent of all stock markets in the world.
Your Answer A. 80-85 B. 60-65 C. 45-50 Correct Answer D. 30-35 E. 10-15
In which financial market do corporations issue new securities to raise funds?
Your Answer A. primary market B. secondary market C. derivatives market D. futures market E. new issue market (NIM)
To earn a C- in this course, you must earn a minimum overall average--that is, the average of all of the exams and the assignment grade--that equals ________.
A. 72 B. 65 C. 70 D. 75 Your Answer E. 67
Suppose a student earned 96, 94, and 100 on the first three exams, respectively, and 98 for his assignments. Because the student is doing so well in the course, he decides not to take the final exam. What grade will this student receive in the course?
A. A B. A+ Your Answer C. F D. B- E. B The final exam is mandatory. Any student who does not take the final exam will receive an F in the course, regardless of what scores he or she earns on the first three exams and for the assignments.
_________ markets are the financial markets where equity instruments (stocks) are traded.
Your Answer A. Capital B. Money C. Debt D. Derivatives E. Stocks are traded in more than one of the markets listed here.
Which of the following would NOT be classified as a profitability ratio
Your Answer A. time-interest-earned (TIE) ratio B. net profit margin C. return on total assets (ROA) D. return on common equity (ROE)
________ exist when managers make decisions that are in their own best interests rather than the best interests of the owners of a firm.
A. Illegal trades B. Takeover difficulties C. Separation issues D. Goal anxieties Your Answer E. Agency problems
The_______ is defined as the rate of return on the best alternative investment of equal risk.
A. amortization rate B. risk percentage C. alternative return Your Answer D. opportunity cost rate
The three primary forms of business organizations described in the book are
Your Answer A. proprietorship, partnership, and corporation. B. partnership, business association, and corporation. C. multinational limited corporation, proprietorship, and partnership. D. corporation, limited association, and multinational limited corporation.
The _____________ schedule shows how much of the payment on a mortgage or an automobile loan that is allocated to principal and how much is allocated to interest.
A. payment breakdown B. allocation Your Answer C. amortization D. discounting E. compounding
According to the text, which of the following well-known companies is a member of an industrial group that would be called a chaebol?
Correct Answer A. Hyundai Your Answer B. Toyota C. Mitsubishi D. Toshiba E. General Motors
Following are the scores that a student earned for the three non-cumulative exams, the comprehensive final exam, and the assignments/quizzes: Exam 1 ................................ 75 Exam 2 ................................ 75 Exam 3 ................................ 74 Final exam .......................... 73 Assignment grade ............... 12 Incorrect Answer 5.1. What is the course average for this student?
A. 74.7 B. 61.6 Your Answer C. 61.8 D. 74.3 Correct Answer E. 65.0 Course average = 0.23(75) + 0.23(75) + 0.23 (74) + 0.16(73) + 0.15(12) = 65.0 Because it is lower than each of the scores on the first three exams, the final exam score does not substitute for any of the first three exam scores.
To avoid retaking this course, students who entered USF under the 2001-2002 or later catalog are required to earn a grade of ____ or better.
A. C+ Your Answer B. C- C. D+ D. C E. D
Following are the scores that a student earned for the three non-cumulative exams, the comprehensive final exam, and the assignments/quizzes: Exam 1 ................................ 75 Exam 2 ................................ 75 Exam 3 ................................ 74 Final exam .......................... 73 Assignment grade ............... 12 Incorrect Answer 5.2. If the student had earned a 80 on the final exam rather than a 73, what would be the course average for the student?
5.2. If the student had earned a 80 on the final exam rather than a 73, what would be the course average for the student? A. 76.7 Correct Answer B. 67.5 C. 76.0 D. 77.5 Your Answer E. 64.4 Course average = 0.23(75) + 0.23(75) + 0.23 (80) + 0.16(80) + 0.15(12) = 67.5 Because the score on the final exam (80) is higher than the score on Exam 3 (80), the score earned on the second exam is replaced by the score earned on the final exam.
Correct Answer 3. _______ is the process of converting a future value amount into a present (current) value amount by taking out the interest that the amount could earn during the period in question.
A. Compunding B. Depreciating C. Amortizing Your Answer D. Discounting
By definition, what type of annuity best describes the mortgage or rent that you have to pay at the beginning of each month?
Your Answer A. annuity due B. ordinary annuity C. delayed annuity D. annuity in arrears
Which of the following financial statements includes information about a firm's assets (investments) and how those assets are financed?
Your Answer A. Balance sheet B. Income statement C. Statement of retained earnings D. Statement of cash flows
When a stock is listed for trading on more than one stock market, it is said to be ______ listed.
Your Answer A. dual B. double C. multi-market D. mutually E. multiple
What is the term used to describe an annuity with an infinite life?
Your Answer A. perpetuity B. ininuity C. infinity due D. continuous anuity E. forannuity
_______ techniques are employed by firms that attempt to make their financial statements look better than they actually are.
A. Conservative accounting B. Illegal accounting C. Smoke-and-mirror accounting Your Answer D. Window dressing E. Rationally adjusted incomev
How many of the scores that you receive on the combination of the textbook assignments collected in class, the in-class problems, the quizzes administered on Aplia, and the Aplia graded assignments will be used to determine the grade that you earn for the assignments portion of the course?
Your Answer A. 85 percent of all assignment scores B. All of the assignment scores will be counted. C. 90 percent of all assignment scores D. 75 percent of all assignment scores
Which of the following statements about the quizzes that are administered on Aplia is correct?
A. There is no time limit for taking a quiz. Your Answer B. Once started, you have 30 minutes to complete a quiz. The 30-minute clock (time limit) runs consecutively from the time the quiz is started such that the ending time for a quiz that is started at 3 p.m. is 3:30 p.m., even if you log off Aplia during this time period. C. Once started, you have 30 minutes to complete a quiz. The 30-minute clock (time limit) runs only while you a logged on to Aplia, which means that the clock stops when you log off Aplia. As a result, you could possibly take a quiz over multiple days as long as the sum of the time you are logged on to Aplia does not exceed 30 minutes. D. After starting a quiz, answers can be changed at any time and as many times as you want so long as the due date (deadline) for taking the quiz has not passed. E. The questions given on the quizzes are quite similar to those that will be contained on the exams.
Which of the following financial intermediares was originally established to provide real estate mortgages to local residents?
A. commercial banks B. life insurance companies C. credit unions Your Answer D. savings and loan associations (thrifts) E. pension funds
When interest is earned on interest that is reinvested, we generally say that the investment earns __________ interest.
A. discounted B. double Your Answer C. compound D. simple E. less
Following are the scores that a student earned for the three non-cumulative exams, the comprehensive final exam, and the assignments/quizzes: Exam 1 ................................ 75 Exam 2 ................................ 75 Exam 3 ................................ 74 Final exam .......................... 73 Assignment grade ............... 12 Incorrect Answer 5.3. As it turns out, this student did not attend any of the class meetings, and she did not complete many of the Aplia assignments/quizzes. If she had put in a little effort and turned in a few more of the assigned problems from the book, the in-class problems, and completed more of the Aplia assignments/quizzes, she could have easily earned a minimum score of 30 for the assignment portion of her grade. If she had received a score of 30 rather than 12 for the assignment portion of her overall grade, what letter grade would she have earned in the course? Assume that all of the other scores that were originally given are the grades that she earned in the course (i.e., the score on the final exam is 73).
A. C Your Answer B. D Correct Answer C. C- D. D+ E. C+ Course average = 0.23(75) + 0.23(75) + 0.23(74) + 0.16(73) + 0.15(30) = 67.7, which is a C- in the course.
When conducting financial statement analysis, it is important that a firm complete two principal types of analyses, which are called ______ analysis and ______ analysis.
A. DuPont ratio; trend B. industry; comparative ratio Your Answer C. comparative ratio; trend D. Balance sheet; retained earnings
According to university policy, which of the following situations would be considered an excused absence (as opposed to an unexcused absence)?
A. Missing an exam because you (or a friend or relative) are getting married. B. Missing course work because you are a member of the USF Hockey Club and you have a practice to attend. Your Answer C. More than one of the reasons listed here represent excused absences. Correct Answer D. Missing class because you have jury duty. E. Missing class because you have to travel to New York for your job. Please read the policy on excused absences that is provided in the syllabus.
Given an amount to be received 15 years in the future, if interest rates increase, what would happen to the present value of the future amount? Assume that everything else constant.
A. The present value would increase. Your Answer B. The present value would decrease. C. The present value would not change. D. There is not enough information to answer this question. More interest would be earned, which means the amount needed today would be less.
The simple, or quoted, interest rate is also known as the ____________.
A. effective annual rate (EAR) Your Answer B. annual percentage rate (APR) C. periodic rate (PER) D. amortization interest rate (AIR)
Which of the following is not mentioned in the book as a method that can be used to solve time value of money problems?
A. equation solution B. spreadsheet solution C. financial calculator solution Your Answer D. interest table solution
Which of the following groups of financial ratios provides an indication as to how well the firm can meet its current (short-term) financial obligations (debt)?
A. market value ratios B. asset management ratios C. profitability ratios D. debt management ratios Your Answer E. liquidity ratios
The primary goal of the financial manager of a firm should be to
A. maximize the firm's net income. B. maximize the dividends paid to stockhloders. Your Answer C. maximize stockholder wealth (stock price). D. minimize the expenses incurred by the firm. E. minimize interest payments on the firm's debt
Large foreign firms generally have _________ stockholders than U.S. firms that are the same size.
A. more Your Answer B. fewer C. about the same number of D. Foreign firms do not have stockholders.
Treasury bills, which are considered short-term debt instruments because they have maturities less than one year, are traded in the _______ markets.
A. options B. private lending C. equity D. stock Your Answer E. money
The _________ market is the name given to the market that includes stocks of companies that have recently sold stock to the general investing public for the first time--that is, they have gone public for the first time.
A. rookie Your Answer B. initial public offering (IPO) C. seasoned equity D. public offering E. new money
If the current market prices of financial assets reflect all information that is publicly available to investors, but they do not reflect privately held information that is known by corporate insiders, the financial markets are said to be
A. weak-form efficient Your Answer B. semistrong-form efficient C. strong-form efficient D. in a bull market phase
______ are the costs that are associated with issuing new stocks and bonds.
Your Answer A. Flotation costs B. Offering expenses C. Issuing revenues D. Listing costs
Which of the following statements about the course is correct?
A. After the course has been completed and your final grade for the course has been computed at the end of the semester, you will be given an opportunity to improve a marginal grade, such as a D+, by completing a "special" term project. Your Answer B. Students do not need a hard (paper) copy of the textbook to complete all of the requirements for this course C. The score earned on the final exam will be counted only if it is higher than one of the scores earned on the first three non-cumulative exams (i.e., Exam 1, Exam 2, or Exam 3). D. Everyone who misses an exam will have the opportunity to take a make-up exam that includes only the material covered on the exam that was missed. For example, if Exam 1 is missed, each student who missed that exam will be able take a make-up exam that covers Chapters 1-4, regardless of the reason he or she missed the exam. The score earned on the final exam counts regardless of whether it is higher than any of the scores earned on the first three exams. The minimum the score on the final exam counts is 16 percent of the overall course grade. If the score on the final exam is higher than any of the scores on the first three exams, then it will effectively count 39 percent of the overall grade; that is, the score on the final exam will count 16 percent plus the 23 percent for the exam score that it replaces.
