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Ask unvrs Your Own Question

unvrs
unvrs, Master's Degree
Category: Business and Finance Homework
Satisfied Customers: 348
Experience:  CFA Level 2 Candidate
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Are you able to help me with multiple question on the topic

Customer Question

Are you able to help me with multiple question on the topic of Principles of Finance
Submitted: 2 years ago.
Category: Business and Finance Homework
Expert:  unvrs replied 2 years ago.

unvrs :

Hi, Thanks for requesting me.

Customer:

Yes, I seen that you had posted on my previous question about being able to help me with these questions?

Customer:

Do you have experience with finances?

unvrs :

Yes, but it also depends on the topics. What type of problems are they?

Customer:

I'm not able to actually open the questions...As soon as I open them they are timed. They are multiple choice questions. I could give you a book title and author if that would help?

unvrs :

Sure. What's the book title and author? Is it an introductory finance class?

Customer:

Block, S. A., Hirt, G. A., & Danielsen, B. R. (2009). Foundations of financial management (13th ed.). NY: The McGraw-Hill Companies, Inc

Customer:

the course is called Principles of Finance

unvrs :

Okay and which chapters or topics will the assignment be on?

Customer:

here are the objectives for the first section.

Customer:
  • Explain the scope of finance in business and assess the role of corporate finance in value creation.

  • List the goals of financial management and use them to evaluate financial decisions in profit-making organizations.

  • Assess the role and responsibilities of financial managers in a corporation.

  • Explain the importance of financial markets and institutions in an economy.

  • Analyze the information contained in financial statements for financial decision making.

  • Explain the principles of taxation of corporate and personal income.

  • Distinguish between income and cash flows and between book values and market values.

  • List various accounting malpractices and frauds, and assess the need for ethical conduct in wealth maximization
  • Customer:

    is that something u maybe able to help with

    unvrs :

    ok.

    unvrs :

    Do you have access to any electronic text of the book or is there any website accompany the book?

    Customer:

    not that i'm aware of. Sorry

    unvrs :

    That's fine. We can start.

    Customer:

    are you comfortable with this?

    unvrs :

    It should be fine.

    Customer:

    ok. Do you want me to post the questions in the chat?

    unvrs :

    Yes please.

    Customer:

    ok. let me pull them

    Customer:







































































    What is the primary goal of financial management?






























    A. Increased earnings







    B. Maximizing cash flow







    C. Maximizing shareholder wealth







    D. Minimizing risk of the firm

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    Proper risk-return management means that the firm:






























    A. should take as few risks as possible.







    B. must determine an appropriate trade-off between risk and return.







    C. should earn the highest return possible.







    D. should value future profits more highly than current profits.

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    One of the major disadvantages of a sole proprietorship is:






























    A. that there is unlimited liability to the owner.







    B. the simplicity of decision making.







    C. low organizational costs.







    D. low operating costs.

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    Corporate governance is the:






























    A. relationship and exercise of oversight by the board of directors of the company.







    B. relationship between the chief financial officer and institutional investors.







    C. operation of a company by the chief executive officer (CEO) and other senior executives on the management team.







    D. governance of the company by the board of directors with a focus on social responsibility.

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    Agency theory examines the relationship between the:






























    A. shareholders of the firm and the firm's investment banker.







    B. owners of the firm and the managers of the firm.







    C. board of directors and large institutional investors.







    D. shareholders and the firm's transfer agent.

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    The Sarbanes-Oxley Act was passed in an effort to:






























    A. protect small business from large corporations dominating the market.







    B. ensure that partnerships divide profits among partners in a fair manner.







    C. guarantee outside auditors can control corporate accounting practices.







    D. control corrupt corporate behavior.

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    Insider trading occurs when:






























    A. someone has information not available to the public which he or she use to profit from trading in stocks.







    B. corporate officers buy stock in their company.







    C. lawyers, investment bankers, and others buy common stock in companies represented by their firms.







    D. any stock transactions occur in violation of the Federal Trade Commission's restrictions on monopolies.

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    When a corporation uses the financial markets to raise new funds, the sale of securities is made in the __________ market.






























    A. primary







    B. secondary







    C. on-line







    D. third

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    The entity that is responsible for establishing the allocation and cost of capital is the:






























    A. corporation.







    B. economy.







    C. investors.







    D. customers.

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    Regarding risk levels, financial managers should:






























    A. pursue higher risk projects because they increase value.







    B. avoid higher risk projects because they destroy value.







    C. focus primarily on market fluctuations.







    D. evaluate investors' desire for risk.

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    Which of the following is NOT one of the three basic financial statements?






























    A. Income Statement







    B. Statement of Retained Earnings







    C. Statement of Cash Flows







    D. Balance Sheet

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    The residual income of the firm belongs to:






























    A. creditors.







    B. preferred stockholders.







    C. common stockholders.







    D. bondholders.

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    Consider the following information for Ball Corp. Selling and administrative expense $50,000 Depreciated expense $80,000 Sales $400,000 Interest expense $30,000 Cost of goods sold $150,000 Taxes $18,550 What is the Operating Profit for Ball Corp?






























    A. $71,450







    B. $90,000







    C. $120,000







    D. None of the above

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    Elgin Battery Manufacturers had sales of $900,000 in 2006 and their cost of goods sold represented 65 percent of sales. Selling and administrative expenses were 9 percent of sales. Depreciation expense was $10,000 and interest expense for the year was $8,000. The firm's tax rate is 30 percent. What is the dollar amount of taxes paid?






























    A. $51,200







    B. $45,800







    C. $51,800







    D. $64,800

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    If a firm has earnings per share of $5 and a price-earnings ratio of 15, what is the stock price?






























    A. $20







    B. $75







    C. $3







    D. The market assigns a stock price independent of EPS and the P/E ratio.

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    An item that may be converted to cash within one year or one operating cycle of the firm is classified as a:






























    A. current liability.







    B. long-term asset.







    C. current asset.







    D. long-term liability.

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    Which account represents the cumulative earnings of the firm since its formation, minus dividends paid?






























    A. Paid-in capital







    B. Common stock







    C. Retained earnings







    D. Accumulated depreciation

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    The primary disadvantage of accrual accounting is that it does NOT:






























    A. match revenues and expenses in the period in which they are incurred.







    B. appropriately measure accounting profit.







    C. recognize accounts receivable.







    D. adequately show the actual cash flow position of the firm.

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    Depreciation is a source of cash inflow because it:






























    A. is a tax-deductible non-cash expense.







    B. supplies cash for future asset purchases.







    C. is a tax-deductible cash expense.







    D. is a taxable expense.

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    Given the following, calculate free cash flow. Cash flow from operating activities $175,000 Capital expenditures $35,000 Dividends $25,000






























    A. $115,000







    B. $235,000







    C. $185,000







    D. $165,000


    unvrs :

    1. C

    unvrs :

    2. B

    unvrs :

    3. A

    unvrs :

    4 A

    unvrs :

    5. D

    unvrs :

    6. D

    unvrs :

    7. A

    unvrs :

    8. A

    unvrs :

    9. A

    unvrs :

    10. D

    unvrs :

    11. B

    unvrs :

    12. C

    unvrs :

    13. C

    unvrs :

    I need to come back to 14...
    15. B

    Customer:

    ok

    unvrs :

    16. C

    unvrs :

    17. C

    unvrs :

    18. D

    unvrs :

    19. A

    unvrs :

    20. A

    Customer:

    you still looking at 14?

    unvrs :

    yes.

    unvrs :

    14. C

    Customer:

    let me know and I will submit the next set. I will provide you with a bonus for the questions.

    Customer:







































































    In examining the liquidity ratios, the primary emphasis is the firm's:






























    A. ability to effectively employ its resources.







    B. overall debt position.







    C. ability to pay short-term obligations on time.







    D. ability to earn an adequate return.

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    Which two ratios are used in the DuPont system to create return on assets?






























    A. Return on assets and asset turnover







    B. Profit margin and asset turnover







    C. Return on total capital and the profit margin







    D. Inventory turnover and return on fixed assets

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    A firm has a debt to total assets ratio of 50%, debt of $300,000, and net income of $90,000. What is the return on equity?






























    A. 60%







    B. 15%







    C. 30%







    D. 45%

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    ABC Co. has an average collection period of 60 days. Total credit sales for the year were $3,000,000. What is the balance in accounts receivable at year-end?






























    A. $50,000







    B. $100,000







    C. $500,000







    D. $80,000

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    Investors and financial analysts wanting to evaluate the operating efficiency of a firm's managers would probably look primarily at the firm's __________ ratios.






























    A. debt utilization







    B. liquidity







    C. asset utilization







    D. profitability

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    If lease payments are reduced:






























    A. times interest earned goes up.







    B. fixed charges coverage goes up.







    C. fixed charge coverage stays the same.







    D. fixed charge coverage goes down.

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    If the company's accounts receivable turnover is increasing, the average collection period:






























    A. is going up slightly.







    B. is going down.







    C. could be moving in either direction.







    D. is going up by a significant amount.

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    The key initial element in developing pro forma statements is a(n):






























    A. cash budget.







    B. income statement.







    C. sales forecast.







    D. collections schedule.

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    A rapid rate of growth in sales may require:






























    A. higher dividend payments to shareholders.







    B. increased borrowing by the firm to support the sales increase.







    C. the firm to be more lenient with credit customers.







    D. sales forecasts to be made less frequently.

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    In order to estimate production requirements, we:






























    A. add beginning inventory to projected sales in units and subtract desired ending inventory.







    B. add projected sales in units to desired ending inventory and subtract beginning inventory.







    C. add beginning inventory to desired ending inventory and divide by two.







    D. add beginning inventory to desired ending inventory and subtract projected sales in units.

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    A firm utilizing FIFO inventory accounting would, in calculating gross profits, assumes that:






























    A. all sales were from current production.







    B. all sales were from beginning inventory.







    C. sales were from beginning inventory until it was depleted, and then use sales from current production.







    D. all sales were for cash.

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    The need for an increase or decrease in short-term borrowing can be predicted by:






























    A. ratio analysis.







    B. trend analysis.







    C. a cash budget.







    D. an income statement.

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    The difference between total receipts and total payments is referred to as:






























    A. cumulative cash flow.







    B. beginning cash flow.







    C. net cash flow.







    D. cash balance.

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    Firms that successfully increase their rates of inventory turnover will, among other things:






























    A. be able to reduce their borrowing needs.







    B. be able to reduce their dividend payments to stockholders.







    C. find it more difficult to be given credit by their resource suppliers.







    D. have a greater need for high balances in their cash accounts.

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    The concept of operating leverage involves the use of __________ costs to magnify returns at high levels of operation.






























    A. fixed







    B. variable







    C. marginal







    D. semi-variable

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    A highly automated plant would generally have:






























    A. more variable than fixed costs.







    B. more fixed than variable costs.







    C. all fixed costs.







    D. all variable costs.

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    If a firm has fixed costs of $20,000, variable cost per unit of $.50, and a breakeven point of 5,000 units, what is the price?






























    A. $2.50







    B. $5.00







    C. $4.00







    D. $4.50

    Reset Selection

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    A firm's break-even point will rise if:






























    A. fixed costs decrease.







    B. contribution margins increase.







    C. price per unit rises.







    D. variable cost per unit rises.

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    Firms with a high degree of operating leverage are:






























    A. easily capable of surviving large changes in sales volume.







    B. usually trading off lower levels of risk for higher profits.







    C. significantly affected by changes in interest rates.







    D. trading off higher fixed costs for lower per-unit variable costs.

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    If TechCor has fixed costs of $80,000, variable costs of $1.20/unit, sales price/unit of $6, and depreciation expense of $25,000, what is its cash breakeven in units?






























    A. 9,167







    B. 11,458







    C. 21,875







    D. 45,833


    unvrs :

    How many sets are there?

    Customer:

    total of 4. This is 2/4

    Customer:

    is that ok?

    unvrs :

    okay, can you give me a bonus per set?

    Customer:

    $5.00/per set?

    Customer:

    is that ok?

    unvrs :

    hmm.. What about $10 each?

    Customer:

    ok. If you do well on these 3 other sets. Would you be willing to do another 4 at some point today? for the same wage? 10.00/set?

    unvrs :

    I'll be available later today, like around 7pm Eastern time

    Customer:

    ok. I'm in central time. I believe you're an hour ahead?

    unvrs :

    ok.

    Customer:

    If you could complete this set of questions.I will then post the 3rd set and so on.

    unvrs :

    ok.

    unvrs :

    1. C
    2. B
    3. B

    unvrs :

    4. C
    5. C

    unvrs :

    6. B

    unvrs :

    7. B

    unvrs :

    8. C

    unvrs :

    9. B

    unvrs :

    10. C

    unvrs :

    11. B

    unvrs :

    12. C

    unvrs :

    13. C

    unvrs :

    14. A

    unvrs :

    15. A

    unvrs :

    16. B

    unvrs :

    17. D

    unvrs :

    18. D

    unvrs :

    19. D

    unvrs :

    20. B
    Would you please accept my answer first before we proceed to the next set?

    Customer:

    we agreed on 4 sets.

    Customer:

    there are a total of 8. You said you would do half now and half tonight?

    Customer:

    and that I would provide a bonus for each set.

    Customer:

    or am I not understanding

    unvrs :

    The additional sets are bonuses, right? You can put the bonuses when we finish but often, I have bad experience where after hours of hard work, the customers don't even accept my answer.

    Customer:

    I can promise you I'm not like that. I will tell you up front right now you are doing well on these questions and I wouldn't do that.

    Customer:

    I do understand that you'r worried but I am not that type of person. I'm am trusting

    unvrs :

    How about after the 4th set this morning?

    Customer:

    I will accept your answers after the 4th set and we can do the 5-8 later on this evening around 7

    unvrs :

    ok.

    Customer:

    I will send you the 3rd set. I will let you know that I need to be away from the computer for about 10-15 minutes. I need to take my wife to work quickly.

    unvrs :

    ok.

    Customer:







































































    The difference between the amount of cash on the firm's books and the amount credited to it by the bank is:






























    A. an overdraft.







    B. interest revenue.







    C. extended disbursement.







    D. float.

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    The problem in stretching out the maturity of marketable securities is that:






























    A. you are legally locked in until the maturity date.







    B. longer term securities are often not available.







    C. there is greater possibility of loss.







    D. interest rates are generally lower.

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    Probably the safest and most marketable instrument for short-term investment is:






























    A. commercial paper.







    B. large denomination certificates.







    C. Treasury notes.







    D. Treasury bills.

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    Eurodollars:






























    A. can only be redeemed at U.S. banks or their branches in European countries.







    B. are U.S. dollars that have been converted into several European currencies.







    C. may be borrowed by anyone who wishes to hold dollars.







    D. can only be redeemed at U.S. banks or their branches in any foreign country.

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    Money market funds are:






























    A. accounts that allow small investors to participate in buying large-denomination securities.







    B. extremely risky but high-yielding accounts used by large corporations to finance operations.







    C. accounts that allow small investors to buy shares in companies that then buy shares of common stock.







    D. pools of bonds held by large utility companies.

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    The most subjective and also significant segment of the 5 C's of credit for giving final approval is:






























    A. capacity.







    B. collateral.







    C. character.







    D. conditions.

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    Hedging:






























    A. is a way to protect your accounts receivable position.







    B. increases risk.







    C. is a legal agreement to buy or sell a financial futures contract.







    D. can be carried out with a futures contract.

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    Modos Company has deposited $2,000 in checks received from customers. It has written $1,400 in checks to its suppliers. The initial bank and book balance was $400. If $1,600 of its customer's checks have been cleared but only $600 of its own checks have cleared, calculate its float.






























    A. $200







    B. $400







    C. $300







    D. $700

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    We expect that we can receive annual incremental income after taxes of $15,000 which includes an adjustment for uncollectible accounts. What is the maximum commitment to A/R we should be willing to assume if our firm's minimum required after-tax return is 12%?






























    A. $18,000







    B. $125,000







    C. $168,000







    D. $180,000

    Reset Selection

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    The inventory decision model provides which type of information?






























    A. Optimal total inventory







    B. Optimal safety stock







    C. Optimal order size







    D. Optimal carrying cost per unit

    Reset Selection

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    Present value is __________ future value.






























    A. usually greater than







    B. the exact opposite of







    C. always 10% of







    D. sometimes equal to

    Reset Selection

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    In determining the future value of a single amount, one measures the __________ at a given interest rate.






























    A. future value of periodic payments







    B. present value of an amount discounted







    C. future value of an amount allowed to grow







    D. present value of periodic payments

    Reset Selection

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    An annuity may be defined as a:






























    A. payment at a fixed interest rate.







    B. series of payments of unequal amount.







    C. series of yearly payments.







    D. series of consecutive payments of equal amounts.

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    If you were to put $1,000 in the bank at 6% interest each year for the next ten years, which table would you use to find the ending balance in your account?






























    A. Present value of $1







    B. Future value of $1







    C. Present value of an annuity of $1







    D. Future value of an annuity of $1

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    XXXXX XXXXX will receive $1 million in 50 years. The discount rate is 14%. As an alternative, she can receive $2,000 today. Which should she choose?






























    A. $1 million dollars in 50 years







    B. $2,000 today







    C. She should be indifferent.







    D. Need more information to answer

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    A home buyer signed a 20-year, 8% mortgage for $72,500. Given the following information, how much should the annual loan payments be? Present value of $1 PVIF 0.215 Future value of $1 FVIF 4.661 Present value of annuity PVIFA 9.818 Future value of annuity FVIFA 45.762






























    A. $1,584







    B. $7,384







    C. $15,555







    D. $15,588

    Reset Selection

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    What is the future value of a $1000 investment today at 8% annual interest compounded semiannually for 5 years?






























    A. $1,469







    B. $1,480







    C. $1,520







    D. $1,555

    Reset Selection

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    Sydney saved $50,000 during her first year of work after college and plans to invest it for her retirement in 40 years. How much will she have available for retirement if she can make 8% on her investment?






























    A. $596,250







    B. $12,953,000







    C. $2,345,100







    D. $1,086,250

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    Jeff believes he will need $60,000 annual income during retirement. If he can achieve a 5% return during retirement and believes he will live 30 years after retirement, how much does he need to save by the time he retires?






























    A. $1,029,540







    B. $3,986,340







    C. $922,320







    D. $259,320

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    If Gerry makes a deposit of $1,500 at the end of each quarter for 5 years, how much will he have at the end of the 5 years assuming a 12% annual return and quarterly compounding?






























    A. $40,305







    B. $30,000







    C. $108,078







    D. $161,220


    Customer:

    are you still there

    unvrs :

    Yes.

    unvrs :

    There are a couple of them that I am not certain of the answers.

    Customer:

    i can't see the answers

    Customer:

    for the 3rd set that is

    unvrs :

    Here is my answer:
    http://wikisend.com/download/767132/finance mc 3.docx

    unvrs :

    the ones in green are the ones that I am not certain about.

    Customer:

    ok. I will complete those and then send the 4th set.

    unvrs :

    I have to go in 30 minutes.

    Customer:







































































    In a general sense, the value of any asset is the:






























    A. value of the dividends received from the asset.







    B. present value of the cash flows received from the asset.







    C. value of past dividends and price increases for the asset.







    D. future value of the expected earnings discounted by the asset's cost of capital.

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    Which of the following financial assets is likely to have the highest required rate of return based on risk?






























    A. Corporate bond







    B. Treasury bill







    C. Certificate of Deposit







    D. Common stock

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    A bond that has a yield to maturity greater than its coupon interest rate will sell for a price:






























    A. below par.







    B. at par.







    C. above par.







    D. that is equal to the face value of the bond plus the value of all interest payments.

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    A ten-year bond, with par value equals $1000, pays 10% annually. If similar bonds are currently yielding 6% annually, what is the market value of the bond? Use semi-annual analysis.






























    A. $1000.00







    B. $1127.50







    C. $1297.85







    D. $2549.85

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    A 14-year zero-coupon bond was issued with a $1000 par value to yield 12%. What is the approximate market value of the bond?






























    A. $597







    B. $205







    C. $275







    D. $482

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    If the inflation premium for a bond goes up, the price of the bond:






























    A. is unaffected.







    B. goes down.







    C. goes up.







    D. Need more information

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    If the yield to maturity on a bond is greater than the coupon rate, you can assume:






























    A. interest rates have decreased.







    B. the price is below the par.







    C. the price is above the par.







    D. risk premiums have decreased.

    Reset Selection

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    The return measure that an investor demands for giving up current use of funds, without adjusting for purchasing power changes or the real rate of return, is the:






























    A. risk premium.







    B. inflation premium.







    C. dividend yield.







    D. discount rate.

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    A ten-year bond pays 11% interest on a $1000 face value annually. If it currently sells for $1,195, what is its approximate yield to maturity?






























    A. 9.33%







    B. 7.94%







    C. 12.66%







    D. 8.10%

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    The longer the time to maturity the:






























    A. greater the price increase from an increase in interest rates.







    B. less the price increase from an increase in interest rates.







    C. greater the price increase from a decrease in interest rates.







    D. less the price decrease from a decrease in interest rates.

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    A bond pays 9% yearly interest in semi-annual payments for 6 years. The current yield on similar bonds is 12%. To determine the market value of this bond, you must find the interest factors (IFs) for:






























    A. 12 periods at 12%.







    B. 6 periods at 9%.







    C. 6 periods at 6%.







    D. 12 periods at 6%.

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    The price of preferred stock may react strongly to a change in Kp because:






























    A. preferred stock may be cumulative.







    B. preferred stock dividends have to be paid before common stock dividends.







    C. there is no maturity date.







    D. corporate recipients of preferred stock dividends may receive a partial tax exemption.

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    The value of a common stock is based on its:






























    A. past performance.







    B. historic dividends.







    C. current earnings.







    D. value of future benefits to the holder.

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    The dividend valuation model stresses the:






























    A. importance of earnings per share.







    B. importance of dividends and legal rules for maximum payment.







    C. relationship of dividends to market prices.







    D. relationship of dividends to earnings per share.

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    The dividend on preferred stock is most similar to:






























    A. common stock with no growth in dividends.







    B. common stock with constant growth in dividends.







    C. common stock with variable growth in dividends.







    D. a Certificate of Deposit.

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    If expected dividends grow at 8% and the appropriate discount rate is 12%, what is the value of a stock with an expected dividend of $2.33?






























    A. $62.88







    B. $19.41







    C. $29.12







    D. $58.25

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    Required return by investors is directly influenced by all of the following EXCEPT:






























    A. inflation.







    B. U.S. Treasury rates.







    C. dividends.







    D. risk.

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    Market Enterprises would like to issue bonds and needs to determine the approximate rate it would need to pay investors. A firm with similar risk recently issued bonds with the following features: a 7% coupon rate, 20 years until maturity, and a current price of $1,150. At what rate would Market Enterprises expect to issue its bonds, assuming annual interest payments?






























    A. 5.7%







    B. 5.9%







    C. 7%







    D. 7.1%

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    Star Corp. issued bonds 2 years ago with a 9% coupon rate. Its bonds are currently trading for $928 in the market. Which of the following most likely has occurred since the time of issue?






























    A. Interest rates decreased







    B. Inflation increased







    C. Risk decreased







    D. Real rates of return decreased

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    Doug has been approached by his broker to purchase a bond for $850. He believes the bond should yield 10%. The bond pays 7% annual coupon rate and has 12 years left until maturity. What should Doug's analysis of the bond indicate to him?






























    A. The bond is undervalued, purchase







    B. The bond is undervalued, do not purchase







    C. The bond is overvalued, purchase







    D. The bond is overvalued, do not purchase


    Customer:

    this is the last set before we continue this evening

    unvrs :

    ok.

    unvrs :

    1. B

    unvrs :

    2. D

    unvrs :

    3. A

    unvrs :

    4. C

    unvrs :

    5. B

    unvrs :

    6. B

    unvrs :

    7. B

    unvrs :

    8. D

    unvrs :

    9. D

    unvrs :

    10. B

    unvrs :

    11. D

    unvrs :

    12. C

    unvrs :

    13. D

    unvrs :

    14. C

    unvrs :

    15. A

    unvrs :

    16. D

    unvrs :

    17. C

    unvrs :

    18. A

    unvrs :

    19. B

    unvrs :

    20. D

    unvrs :

    Done.

    Customer:

    Ok. Thank you. I will accept your response

    unvrs, Master's Degree
    Satisfied Customers: 348
    Experience: CFA Level 2 Candidate
    unvrs and other Business and Finance Homework Specialists are ready to help you
    Customer: replied 2 years ago.
    Are you available to answer 10 finance questions?
    Expert:  unvrs replied 2 years ago.
    Yes, I am here.
    Customer: replied 2 years ago.
    I got it taken care of thanks though.
    Expert:  unvrs replied 2 years ago.
    Ok.
    Expert:  unvrs replied 2 years ago.
    Hi, I would like to follow up with you with the finance hw sets. Please let me know if you have any questions.
    Also, did you forget about the bonus for the first 4 sets? Thanks.

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