Sport Finance Quiz #2
The major disadvantages of forming a business under this structure is that there is double taxation of profits, and the cost of forming the business and operating the business is higher than other structures.
C Corporations
In general, the chances of receiving back an investment in a large market Major League Baseball team is __________ that for a small market team.
greater than
Which of the following is calculated by investigating changes in the Consumer Price Index (CPI)?
Inflation Rate
When calculating the nominal interest rate, which of the following premiums is added to account for the risk of time and interest rate risk?
Maturity Risk Premium
For this type of bonds, the annualized interest rate on the bonds is reset at auctions held every seven to 35 days.
Auction-Rate Bonds
What is determined by comparing the risk of one asset to another?
Level of Risk
The choices that individuals and organizations make regarding financial management are influenced by which of the following?
Demand, Scarcity, Price
One source of risk is current economic conditions. Of the following, which is impacted by changes in current economic conditions?
A, B, and C are all true
When the citizens of Hamilton County, Ohio, decided to raise their taxes to fund two new sports stadiums rather than to raise taxes for something like improving the educational system in the county, they missed a chance to improve the educational system. What is this known as?
An Opportunity Cost
A series of equal payments or receipts made at any interval of time is a(n) __________.
Annuity
If the demand for certain games or events increases and the demand curve shifts to the right, what should ticket managers do?
Charge more for those games or events
Measure of risk or uncertainty over time
Discount Rate
. Which of the following is the depreciation method that is most aggressive at allocating loss of useful life to the early years of the asset's use?
Double-Declining Method
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?
National Football League
Which of the following is the nominal or quoted risk-free rate of interest?
None of the above
Which of the following is a single cash flow per year forever into the future?
Perpetuity
Which of the following was the first major professional sports team to declare bankruptcy in the middle of a long-term facility lease?
Pheonix Coyotes
Which of the following is today's value of a future cash flow?
Present Value
The interest rate banks charge their best customers is referred to as the __________.
Prime Rate
The purchasing power of a dollar is referred to as its __________.
Real Value
Which of the following is the rate of return required over and above the risk-free-rate?
Risk Premium
Risk increases as the length of time funds are invested increases. This is known as __________.
Risk of time
When sports leagues do not expand into a market that can support a franchise, or when they create rules to limit the movement of existing franchises, which of the following economic concepts is being applied.
Scarcity
The vast majority of for-profit businesses in the United States operate as which of the following?
Sole Proprietership
The owners of which franchise agreed to a perpetuity when they negotiated to fold their team after the ABA and NBA merger.
St. Louis Spirits
This method of depreciation attempts to take the non-linear loss of a fixed asset's value into account with depreciation occurring late after purchase. Using this method, the denominator for a fixed asset with a useful life of five years is 15.
Sum of years digits, accelerating depreciation
This method of depreciation attempts to take the non-linear loss of a fixed asset's value into account with depreciation occurring quickly after purchase. Using this method, the denominator for a fixed asset with a useful life of five years is 15.
Sum of years digits, decelerating depreciation
