FIN 3430
you are currently holding a call option on a stock with an exercise price of 100
$(10)
if two projects are completely and positively linear
+1
the coefficient of correlation that indicates
-0.11
listed below are four numbers
-1.0
a company has cash of 100 million
0.78
at the end of the current year, B Co.
1.0
if the return on the market portfolio is 10% and the risk free rate is 5%
1.5% increase
the following information pertains to a company's potential investment
10%
beginning January 2, year 1, a company
10,500
using the capital asset pricing model (CAPM) with beta of 1.5
11%
what is the weighted average cost of capital for a firm using 65%
11.725%
dividends are equal to $5
12.2%
what is the after-tax cost of preferred stock that sells for $5 per share
15%
an analysis covering Guilderland Mining Co.
15.4%
using the capital asset pricing model (CAPM) with beta of 1.25
16%
this year, Nelson Industries increased earnings
2.47
a stock priced at $50 per share
30%
a corporation has 50,000 in equity
30,000
Sharif Co. has a total debt of 420,000
330,000
Konstans Corp.
4%
a vendor offered Wyatt Co.
4,000 loss
at the beginning of year 1, 100,000 is invested at 5% interest
5,250.00
Aaron Co's vendor will be offering discounts
5/20 , net 60
a company has equity of 9,000
6,200
during the current year, Rand Co.
6.0
the following information was take from Culver Co's
60%
City Development Inc,
7.5%
selected information from the accounting records of Bolingbroke company follows
78
Bates Corp. has 100,000
80,000
what is the price of a 10 year, 10% coupon bond
887.00
a company purchased 10,000 of merchandise inventory on may 1
9,800
Scrunch-Tech Inc,
9.36%
because of the large number of factors that could affect the demand
Monte Carlo simulation
which of the following classes of securities
US treasury bond;
an investor is currently holding income bonds
US treasury bonds
each of the following financial instruments is a derivative except
a fixed interest, 5 year note payable
which of the following corporate characteristics would favor
a high tax rate
which of the following is considered a corporate equity security
a share of callable preferred stock
each of the following business functions is considered part of a company's value chain except
accounting
a measure that describes the risk of an investment project relative to other investments
beta coefficient
the main reason that a firm would strive to reduce the number of days sales
cash
Bander Co.
common stock
one type of risk to which investment securities
company unique risk
all of the following are alternative marketable securities
convertible bonds
Global companies that deal with the political
country risk
the relationship of the total debt to the total equity if a corporation is a measure of
creditor risk
net working capital is the difference between
current assets and current liabilities
if a firm is considering the use of learning curve analysis
decreases
prior to the introduction of the euro
exchange-rate risk
the risk of loss because of fluctuations
exchange-rate risk
an analysis of a company's planned equity financing
expected market earning, the risk free rate, and the beta coefficient
if Dexter Industries
expected return should approximate the overall market
which of the following is most useful when risk is being prioritized
expected value
which one of the following is not a determinant in valuing a call option
forward contract price
an investment security with high risk will have a
high standard deviation
many assumptions and factors may be considered to determine the fair value except
historical cost
given demand in excess of capacity, no spoilage or waste
increase for successive periods
as a company becomes more conservative
increase in the ratio of current assets
During the year, Mason Company's
increased by 170,000
if Brewer Coporation's bonds are currently
interest is deductible for tax purposes
in general, it is more expensive for a company to finance with equity capital
investors are exposed to greater risk with equity capital
serial bonds are attractive to the investors because
investors can choose the maturity
the expected monetary value of an event
is equal to the payoff
if a call option is "out-of-the-money"
it is not worth excreting because the value of the underlying asset is less than the exercise price
when managing cash and short-term investments
liquidity and safety
when purchasing temporary investments
liquidity risk
the yield curve shown implies that the
long-term interest rates have a higher annualized yield than short-term rates
a financial institution looking to assess its investment portfolio's
market value at risk analysis
Osgood Products
maximize the net worth of the firm
from an investor's viewpoint, the least risky
mortgage bond
an organization would usually offer credit terms of 2/10, net 30 when
most competitors are offering
which of the following may be used to estimate how inventory
multiple regression analysis
which of the following statements are correct regarding corporate debt
neither
the use of derivatives to either hedge of speculate results in
offsetting risk when hedging and increases risk when speculating
a forward contract involves a commitment today
on a specific future date at a price determined today
if a CPA's client experienced
precious metals
which one of the following statements is correct regarding the effect preferred stock has on a company
preferred shareholders' claims take precedence
the following excerpt was taken from a company's financial statements
preferred stock
preferred and common stock differ in that
preferred stock has a higher priority
management's financial estimates are based on all of the following except
prespecifications, known outcomes, irrelevance
the difference between the required rate of return on a given risky investment
risk premium
a put is an option that gives its owner the right to do which of the following
sell a specific security at fixed conditions of price and time
a widely used approach that managers use to
sensitivity analysis
through the use of decision models, managers thoroughly
sensitivity analysis
when the US dollar is expected to rise in value against foreign currencies
speed up collections and slow down payments
if a bond sells at a premium, the
stated coupon rate must be more
in decision theory, those
states of nature
the expected monetary value of an act is
sum of the conditional profit (loss) for each event times
a market analyst has estimated the equity beta of Modern Homes
systematic risk is higher
to assist in an investment decision, Gift Co.
the greatest probability
according to the capital asset pricing model (CAPM) with beta of 1
the required rate of return is equal to the market return
what does beta measure in the capital asset pricing model
the volatility of a stock relative to the market
if the ratio of total liabilities to equity increases, a ratio that must also increase
total liabilities to total assets
a Chinese conglomerate owns a construction subsidiary
translation exposure
which security is most often held as substitute for cash
treasury bills
the risk of a single stock is
unsystematic risk
short-term interest rates are
usually lower than long-term rates
in decision making under conditions of uncertainty
weighted average
