Financial literacy

1) What is the price of a bond that matures in 13 years and 7 months, has an int

1) What is the price of a bond that matures in 13 years and 7 months, has an interest rate of 3 1/5%, when current market yields are also about 3 1/5%? 2) A broker has called you …

1) What is the value of a put option if the underlying stock price is $38, the s

1) What is the value of a put option if the underlying stock price is $38, the strike price is $31, the underlying stock volatility is 43 percent, and the risk-free rate is 4.4 pe…

1) What is the yield to maturity of the following bond? Coupon 9% Maturity date

1) What is the yield to maturity of the following bond? Coupon 9% Maturity date 2027 Interest paid semiannually Par Value $1000 Market price $955.00 What is the exc…

1) What is your opinion on creating shareholders value with divestures (Explain)

1) What is your opinion on creating shareholders value with divestures (Explain)? 2) Give me a real world example of creating shareholders values with divestures? 3) W…

1) What rate of return should an investor expect for a stock that has a beta of

1) What rate of return should an investor expect for a stock that has a beta of 1.0 when the market is expected to yield 10% and Treasury bills offer 2%? 2)A stock is expected to …

1) What type of economic system lies between capitalism and communism? Explain w

1) What type of economic system lies between capitalism and communism? Explain why it is more effective than other economic systems 2) Discuss the positive aspects of globalizatio…

1) When comparing levered versus unlevered capital structures, why does leverage

1) When comparing levered versus unlevered capital structures, why does leverage work to increase EPS for very high levels of earnings before interest and tax (EBIT)? Because inte…

1) When the liabilities of a bank decline in value but the asset value remains t

1) When the liabilities of a bank decline in value but the asset value remains the same the value of the bank’s equity must decline. True or False? 2)A bank has borrowed $10 milli…

1) Which component of a marketing audit includes major developments in income, p

1) Which component of a marketing audit includes major developments in income, prices, savings, and credit that affect the company? Economic Cultural Political Technological 2) …

1) Which is not a personal-finance life stage? a)Age < 18 b)Age 1624 c)Age > 65

1) Which is not a personal-finance life stage? a)Age < 18 b)Age 1624 c)Age > 65 d)Age 4165 2) Which of the following does the textbook say is a major factor in your happines…

1) Which of the following capital-budgeting decision criteria are correct? a. Ac

1) Which of the following capital-budgeting decision criteria are correct? a. Accept projects that have a positive NPV. b. Accept projects that generate an IRR that is greater tha…

1) Which of the following categories of owners have limited liability? A. Genera

1) Which of the following categories of owners have limited liability? A. General partners B. Sole proprietors C. Shareholders of a corporation D. Both a and b 2) In terms of orga…

1) Which of the following is considered a capital component for the purpose of c

1) Which of the following is considered a capital component for the purpose of calculating the weighted average cost of capital (WACC)? A) Accounts receivables. B) Accruals. C) Ac…

1) Which of the following is false conerning relevant costs and relevant renuves

1) Which of the following is false conerning relevant costs and relevant renuves? A) Every decision deals with the future B) Historical costs in themselves are irrelevant to a dec…

1) Which of the following is not a source of unsecured short-term credit? a. tra

1) Which of the following is not a source of unsecured short-term credit? a. trade credit b. a line of credit c. floating lien d. commercial paper 2) Which of the following action…

1) Which of the following is the length of collection period if half of current

1) Which of the following is the length of collection period if half of current sales are collected in the current quarter, and half of the previous quarter are collected in the c…

1) Which of the following is true of unit banking? a. It is the dominant form of

1) Which of the following is true of unit banking? a. It is the dominant form of banking in the United Sates. b. It occurs when national banks open interstate branch offices…

1) Which of the following is/are an advantage of incorporation? A) Access to cap

1) Which of the following is/are an advantage of incorporation? A) Access to capital markets B) Unlimited life C) Limited liability D) All of the above 2) You own 100 shares of a …

1) Which of the following statements about flotation costs is incorrect: a. Flot

1) Which of the following statements about flotation costs is incorrect: a. Flotation costs for debt is typically lower than flotation costs for equity. b. As a company issues m…

1) Which of the following statements about project cash flow estimation is incor

1) Which of the following statements about project cash flow estimation is incorrect? a). inflation effects should be included b). the effects on a business's other projects shoul…

1) Which of the following statements is correct? a) increasing a company\'s debt

1) Which of the following statements is correct? a) increasing a company's debt ratio will decrease its WACC up to the point where risk outweighs return. b) since debt financing i…

1) Which of the following statements is most correct concerning diversification

1) Which of the following statements is most correct concerning diversification and risk? a) Diversification is mainly achieved by the selection of individual securities for each …

1) Which of the following will decrease the price sensitivity of a bond to chang

1) Which of the following will decrease the price sensitivity of a bond to changes in interest rates? I. decrease in coupon rate II. increase in coupon rate III. increase in inves…

1) Which of the following would your client be better off choosing if the discou

1) Which of the following would your client be better off choosing if the discount rate if 8%? $5,000 today $5,350 received at the end of the year $6,250 received at the end of th…

1) Which one of the following situations is most apt to create an agency problem

1) Which one of the following situations is most apt to create an agency problem? Select one: a. A company researcher is paid a bonus whenever she develops a new method of product…

1) Why are stock markets the most watched and reported of the financial security

1) Why are stock markets the most watched and reported of the financial security markets? 2) What is a market order? What is a limit order? How are each executed? 3) Suppose a fir…

1) Why is global marketing important? 2) What is meant by having a global vision

1) Why is global marketing important? 2) What is meant by having a global vision? 3) How different is the external environment of the global market versus the domestic market? Wha…

1) Why is health care in USA so expensive compare to other countries? 2) What\'s

1) Why is health care in USA so expensive compare to other countries? 2) What's the difference between community rated and experience rated health insurance? 3) what where the maj…

1) Why is it general difficult to determine the market price of a private corpor

1) Why is it general difficult to determine the market price of a private corporation's shares at any point in time? A. The price of its shares is fixed by the owners. B. It has a…

1) Williamson Inc. has a debt-to-equity ratio of 2.5. The firm’s weighted averag

1) Williamson Inc. has a debt-to-equity ratio of 2.5. The firm’s weighted average cost of capital (WACC) is 14%, and its pretax cost of debt is 8%. The corporate tax rate is 40%. …

1) Wilson Machine Tools is considering purchasing a high-tech computer-controlle

1) Wilson Machine Tools is considering purchasing a high-tech computer-controlled milling machine at a cost of $95,000. The cost of installing the machine, preparing the site, wir…

1) Wilson Wonders\'s bonds have 12 years remaining to maturity. Interest is paid

1) Wilson Wonders's bonds have 12 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 10%. The bonds sell at…

1) Winnebagel Corp. currently sells 29,300 motor homes per year at $79,500 each

1) Winnebagel Corp. currently sells 29,300 motor homes per year at $79,500 each and 8,300 luxury motor coaches per year at $121,500 each. The company wants to introduce a new port…

1) XYX corporations capital structure calls for 60% debt and 40% common equity.

1) XYX corporations capital structure calls for 60% debt and 40% common equity. The companys cost of debt is 8%. Retained earnings are estimated to be $160 million. The companys …

1) XYZs bonds have 3 years remaining to maturity. The bonds have a face value of

1) XYZs bonds have 3 years remaining to maturity. The bonds have a face value of 10%. They pay interest annually and have 8% coupon rate. What is their current yield? 2) Diesel co…

1) Ye Yuan is in retirement and is considering investing in one of the following

1) Ye Yuan is in retirement and is considering investing in one of the following two money market securities: A Bank CD offering a quoted yield of 7.08% A Massachusetts Municipal …

1) You are a manager at Percolated Fiber (PF) which is considering expanding its

1) You are a manager at Percolated Fiber (PF) which is considering expanding its operations in synthetic fiber manufacturing. Your boss comes into your office and asks you to…

1) You are given the following information for Lightning Power Co. Assume the co

1) You are given the following information for Lightning Power Co. Assume the company’s tax rate is 40 percent. 5,000 7.2 percent coupon bonds outstanding, $1,000 par value, 30 ye…

1) You are given the following information: • r* = 1.5% • Investors expect infla

1) You are given the following information: • r* = 1.5% • Investors expect inflation to average 3% per year into the foreseeable future • The MRP on 200 year bonds = 2% • The LP o…

1) You are in charge of a project that has a degree of operating leverage of 1.0

1) You are in charge of a project that has a degree of operating leverage of 1.09. What will happen to the operating cash flows if the number of units you sell increase by 6.2 per…

1) You are offered a contract with a signing bonus. If they offered you either $

1) You are offered a contract with a signing bonus. If they offered you either $215,000 in cash or $2,000 a month for 15 years, guaranteed, which do you take (based strictly on th…

1) You are offered an annuity that will pay you $9,000 at the end of each of the

1) You are offered an annuity that will pay you $9,000 at the end of each of the next 10 years. What is the maximum amount you would be willing to pay today for this annuity? (…

1) You are ready to buy a house and you have $20,000 for a down payment and clos

1) You are ready to buy a house and you have $20,000 for a down payment and closing costs. Closing costs are estimated to be 4% of the loan value. You have an annual salary of $36…

1) You are the practice manager of a 8-physician primary care group, in a metrop

1) You are the practice manager of a 8-physician primary care group, in a metropolitan area, that is just beginning to experience capitated reimbursement from managed care compani…

1) You are the president and chief executive officer of a family owned manufactu