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| 3. Multiple Choice. (1\'*10-10) (1) Which of the following are both a A. Mutua

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Question

| 3. Multiple Choice. (1'*10-10) (1) Which of the following are both a A. Mutual funds C. Pension funds B. Insurance companies D. Hedge funds (2) A balance sheet portrays the value of a firm's assets and liabilities: A. over an annual period. B. over any stated period of time. C. at any stated point in time. D. only at the end of the calendar year A firm with no leases has a long-term debt ratio of 50%. This means that the book value of equity: A. equals the book value of long-term debt. B. is less than the book value of long-term debt. C. is greater than the book value of long-term debt. D. is unknown in relation to the book value of long-term debt. (3)

Explanation / Answer

1) b) Insurance companies.

2) c) At any stated point in time.

3) a) Equals the book value of long-term debt.

4) d) This is not possible with positive interest rates.

5) a ) Its yield to maturity.

6) c) Liquidation value.

7) c) Accept all projects with positive net present value.

8) d) Performance during a period.

9) a) Inflation increase more than the real return.

10) b) Tuesday, May 6