BUA

Principal amounts are usually exchanged in currency swaps in interest rate swaps In both currency swaps and interest rates And neither currency swaps or interest rates

currency swaps

Which one of the following is a source of cash? Increase in accounts receivable Decrease in notes payable Decrease in common stock Increase in inventory

(increase in accounts payable decrease in accounts receivable)

Suppose you purchase a put option on XYZ stock when the stock price is $40. The option premium is $2, and the strike price is $39. What is your net profit on the put option if the stock price is $41 at maturity? $-2 $-1 $0 $1 $2

-2 or 2

You bought a yen denominated corporate bond at the beginning of the year for ¥100.000. The bond paid 3% annual interest and was trading for ¥110.000 at year-end. The exchange rate was $1 = ¥100 at the beginning of the year and $1 = ¥122 at year-end. What holding period return, measured in US dollars, did you earn on the bond? -18.03% -7.38% -5.03%

-7.38%

What is the holding period return for the year on a bond with a par value of $1,000 and a coupon rate of 8.5% if its price at the beginning of the year was $1215 and its price at the end of the year was $1020? Assume interest is paid annually -11% -10.78% -9.05% 10.50%

-9.05%

Which of the following ratios are measures of a firm's liquidity? 1 Fixed asset turnover ratio 2. Current ratio 3. Debt-equity ratio 4. Acid test l and 3 only 2 and 4 only 3 and 4 only

2 and 4 only

Suppose you purchase a call option on XYZ stock when the stock price is $81. The option premium is $3, and the strike price is $85. What is your net profit on the call option if the stock price is $89 at maturity? $-7 $-3 $1 $4 $7

$1

JM Case Incorporation has a market value of $5 million with 500.000 shares outstanding. The book value of its equity is $1.750,000. What is JM Case's price per share? $3.50 $5.00 $10.00 $25.00

$10

Please refer to the financial data for Link, Incorporation above. What is Link's profit margin for 2021: -94%. 31%. 13% -57

-94

Which one of the following ratios identifies the amount of sales a firm generates for every $1 in assets? Current ratio Gross margin Retention ratio Asset turnover ratio

Asset turnover ratio

Which of the following securities has a purely fixed claim against a firm's cash flows? Bonds Options Common stock None of the above

bonds

Breakers Bay Incorporation has succeeded in increasing the amount of goods it sells while holding the amount of inventory on hand at a constant level. The firm's cost per unit and selling price per unit also remained constant. All else equal, how will this accomplishment be reflected in the firm's financial ratios? Decrease in the fixed-asset turnover ratio Decrease in the times-interest-earned ratio increase in the inventory turnover ratio

increase in the inventory turnover ratio

Individuals who continually monitor the financial markets seeking mispriced securities Earn excess profits over long-term Make the market increasingly more efficient Is never able to find a security that is temporary mispriced Are overwhelmingly, successful, and earning abnormal profits

make the markets increasingly more efficient.

The most popular yardstick of financial performance among investors and senior managers is the Profit margin Return on equity Return on assets Times burden covered ratio

return on equity

The price of a call option tends to be lower when which of the following is higher (all else equal)? The expected volatility of underlying stock Time to maturity Strike price The price of underlying stock

strike price

In March, with the spot price of wheat at $5.75 per bushel, Hollywood Bakery longs 100 July wheat futures contracts (5.000 bushels each) on the CME at a futures price of $5.90 per bushel. In June, Hollywood Bakery closes out its futures contracts when the futures price is $5.80 per bushel. What is Hollywood Bakery's gain (or loss) on the futures contracts? A loss of 50,000 A gain of 50,000 A loss of 25,000 A gain of 25,000

A loss of $50,000

Which of these ratios, or levers of performance, are the determinants of ROE? 1. Profit margin 2. Financial leverage 3. Times interest earned 4. Asset turnover 1 and 4 only 2 and 4 only 1, 2, and 4 only

1, 2, and 4 only

At the end of 2020, Crane Industries, Incorporated stock price was $30.75. A year later, it was $34.88. Per share dividends over the year were $0.55, while earnings per share were $1.33. What was Crane's dividend yield in 2021? 1.79% 4.33% 13.43% 15.22%

1.79%

A $1,000 par value bond with a fixed 10% rate of interest pays coupons semiannually. What amount will the bondholder receive on the bond's maturity date? 50 100 500 1000 1050

1050

At the end of 2020, Crane Industries, Incorporated stock price was $30.75. A year later, it was $34.88. Per share dividends over the year were $0.55, while earnings per share were $1.33. What was the percentage change in the share price in 2021? 1.79% 4.33% 13.43% 15.22%

13.43%

At the end of 2020, Crane Industries, Incorporated stock price was $30.75. A year later, it was $34.88. Per share dividends over the year were $0.55 while earnings per share were $1.33. What rate of return did the common stockholders earn in 2021? 1.79% 4.33% 13.43% 15.22%

15.22%

Please refer to the financial information for Foodtek, Incorporation above. Assuming the company neither sold nor salvaged any assets during the year, what were Foodtek's capital expenditures (in millions of dollars) during 2021? 40 105 170

170 Change in Net Fixed Assets + Depreciation 105 + 65 = 170

Please refer to the financial data for link. Incorporation above. What is the current ratio for Link at the end of 2021? 2.31 2.76 10.21 10.30

2.76

Suppose an acquiring firm pays $100 million for a target firm, and the target's assets have a book value of $60 million and an estimated replacement value of $70 million. What amount would be allocated to the acquiring firm's goodwill account? $1O million $20 million $3O million $70 million

20 mill

Please refer to the financial information for Foodtek, Incorporation above. During 2021, what was the cost of merchandise (in millions of dollars) produced by Foodtek? 194 218 223 228 252 None above

218 COGS - Change in Inventory 223 - 5 = 218

At the end of 2021, Stacky Corporation had $500.000 in liabilities and a debt-to-assets ratio of 0.5 For 2021, Stacky had an asset turnover of 3.0 What were annual sales for Stacky in 2021? $333,333 $1.200,000 $1,800.000 $3,000,000

3000000

Please refer to the financial information for Foodtek, Incorporation above. During 2021, how much cash (in millions of dollars) did Foodtek collect from sales? 277 324 364 404 451

324 Net sales - change in A/R 364 - 40 = 324

Carbon8 Corporation wants to raise $120 million in a seasoned equity offering, net of all fees. Carbon8 stock currently sells for $28.00 per share. The underwriters will require a fee of $1.25 per share and indicate that the issue must be underpriced by 7.5%. In addition to the undervriter's fee the firm will incur $785.000 in legal administrative, and other costs. How many shares must Carbons sell in order to raise the desired amount of capital: 4.3 mill 4.5 mill 4.6 mill 4.9 mill

4.9 million

What would be the carried interest (at 20%) on a private equity portfolio with an initial value of $500 million that was subsequently liquidated for $750million $50 mill $100 mill $150 mill $250 mill

50 million

You bought a yen-denominated corporate bond at the beginning of the year for ¥100.000. The bond paid 2.5% annual interest and was trading for ¥105.000 at year-end. What holding period return, measured in yen, did you earn on the bond? 2.5% 5% 7.5% 10.0%

7.5%

Please refer to the income statement for VGA Associates below. Assuming that cost of goods sold are variable and operating expenses are fixed, what was VGA Associates' breakeven sales volume in 2021? $20.000 $80.000 $150.000 $180,000 None of the above

80,000

Which one of the following is the financial statement that shows a financial snapshot, taken at a point in time, of all the assets the company owns and all the claims against those assets? Income statement Creditors statement Balance sheet Cash flow statement

Balmce sheet

A company sells used equipment with a book value of $100.000 for $250.000 cash. How would this transaction affect the company's balance sheet? Equity rises $250.000, net plant and equipment falls $250,000. Cash rises $250.000, net plant and equipment felis $100.000, equity rises $150.000 Cash rises $250,000, accounts receivable falls $100,000, goodwill rises $150.000 Cash rises $250.000, net plant and equipment falls $250 000

Cash rises $250.000, net plant and equipment falls $100.000, equity rises $150.000

Which one of the following accurately orders the average rate of return on financial securities from highest to lowest over most of recorded market history (the 1928-2020 period): Short term, government bills, long-term, corporate bonds, long-term government bonds, common stock Long-term corporate bonds, long-term government bonds, common stocks, short-term government bills Common stocks, long-term government bonds, long-term corporate bonds, short term, government bills Common stocks, long-term corporate bonds, long-term government bonds, short term government bills

Common stocks, long-term corporate bonds, long-term government bonds, short-term government bills

Maria just purchased a bond which pays $40 in interest every six months. The $40 interest payment is also called the Coupon Par value Discount Call Premium

Coupon

Elisbury corporation has a goal to reduce its cash conversion cycle. Which of the following actions, holding all the else equal, is likely to accomplish this goal? Elisbury changes the credit terms it offers to customers, allowing them to pay in 45 days instead of 30 Elisbury increases the efficiency of its production process, reducing by 10% the average time it takes to convert raw materials into finished products Elisbury, starts paying off all outstanding invoices to suppliers twice a month instead of once a month Elysburg increases its cash/assets ratio from 12% to 15%

Elisbury increases the efficiency of its production process, reducing by 10% the average time it takes to convert raw materials into finished products

Which of the following statements is true? Equity securities offer fixed claims on future cash payouts Unlike bondholders, stockholders rely entirely on price appreciation for their returns In theory, common stockholders exercise little control, over company decisions Historically common stockholders have earned a risk premium as compensation for risk born in excess of government bonds

Historically common stockholders have earned a risk premium as compensation for risk born in excess of government bonds

Which one of the following is a use of cash? Increase in notes payable increase in inventory increase in long-term debt Decrease in accounts receivable

Increase in inventory

in comparison to industry averages, Okra Corporation has a low inventory turnover, a high current ratio, and an average quick ratio. Which of the following would be the most reasonable inference about Okra Corporation? its current labilities are too low. its cost of goods sold is too low, Its cash and securities balance is too low Its inventory level is too high

Its inventory level is too high

Which of the following formulas describes the calculation of cash flow from operating activities? Net income + Noncash charges - Net increase in current assets + Net increase in current liabilities Net income + Capital expenditures - Dividends paid Net income - Capital expenditures - Dividends paid Net income + Net increase in current assets - Net increase in current labilities

Net income + Noncash charges - Net increase in current assets + Net increase in current liabilities

A company purchases a new $10 million building financed half with cash and half with a bank loan. How would this transaction affect the company's balance sheet? Net plant and equipment rises $10 million; cash falls $10 million; bank debt rises $5 million. Net plant and equipment rises $5 million: cash falls $10 million; bank debt rises $5 million. Net plant and equipment rises $5 million; cash falls $5 million; bank debt rises $5 million Net plant and equipment rises $10 million; cash falls $5 million; bank debt rises $5

Net plant and equipment rises $10 million; cash falls $5 million; bank debt rises $5

: Please refer to the financial data for Link, Incorporation above. What is Link's inventory turnover for 2021? 5.2 24.3 28.8 35.7 None of the options are correct

None above (5.17 is answer)

Which of the following variables does NOT affect the value of a stock option: The predicting future price of the underlying stock The current price of the underlying stock The options time to maturity The option strike price

The predicted future price of the underlying stock

Which of the following factors, when increased, will tend to cause the value of a put to decrease (all else equal)? The expected volatility of underlying stock Time to maturity Strike price The price of underlying stock

The price of the underlying stock

Assume you are a banker who has loaned money to a firm. but that firm is now facing increased competition and reduced cash flows. Which one of the following ratios would you most closely monitor to evaluate the firm's ability to repay its loan? Current ratio Debt-to-equity ratio Times.interest-earned ratio Times-burden covered ratio

Times-burden covered ratio

On a common-size balance sheet, all accounts are expressed as a percentage of sales profits Equity total assets

Total assets for current year

What type of financial instrument is depicted in the position diagram shown below? Forward sale Forward purchase Call option Put option

call option

Which of the following securities has a purely residual claim against a firm's cash flows: Preferred stock Callable bonds Common stock Non-callable bonds

common stock

Which of the following would NOT be considered a use of cash? Dividends paid A decrease in accounts payable Depreciation An increase in the cash and marketable securities account

depreciation

A times-interest-earned ratio of 4.3 indicates that the firm pays 4.3 times its earnings in interest expense. has EBIT equal to 4.3 times its interest expense. has interest expense equal to 4.3% of EBIT. Has interest expense equal to 4.3% of net income

has EBIT equal to 4.3 times its interest expense