Corporate Finance CFA Exam Questions
with Correct Verified Answers, Already
Passed! (Complete & Accurate)
1. Assuming no changes in other variables, which of the following
would decrease ROA? - ANS ✓An increase in average assets.
2. Based only on the information above, the most appropriate
conclusion is that, over the period FY13 to FY15, the company's:
- ANS ✓net profit margin has decreased but its financial leverage has
increased.
3. What does the P/E ratio measure? - ANS ✓The "multiple" that the
stock market places on a company's EPS
4. A creditor most likely would consider a decrease in which of the
following ratios to be positive news? - ANS ✓Debt-to-total assets.
5. When developing forecasts, analysts should most likely: - ANS
✓use the results of financial analysis, analysis of other information,
and judgment.
6. Suppose a company has a current ratio of 2.5 times and a quick
ratio of 1.5 times. If the company's current liabilities are €100
million, the amount of inventory is closest to: - ANS ✓€100
million.
CFA Exam
, 2
CFA
7. The net operating cycle of this company is closest to: - ANS ✓3.8
days
8. A company increasing its credit terms for customers from 1/10,
net 30 to 1/10, net 60 will most likely experience: - ANS ✓an
increase in the average collection period.
9. Suppose a company uses trade credit with the terms of 2/10, net
50. If the company pays its account on the 50th day, the effective
borrowing cost of skipping the discount on day 10 is closest to: -
ANS ✓20.2%.
10. Which of the companies had the highest number of days of
receivables for the year 20X1? - ANS ✓Company B.
11. Which of the companies has the lowest accounts receivable
turnover in the year 20X2? - ANS ✓Company B.
12. The industry average receivables collection period: - ANS
✓decreased from 20X1 to 20X2.
13. Which of the companies reduced the average time it took
to collect on accounts receivable from 20X1 to 20X2? - ANS
✓Company B.
14. The cost of equity is equal to the: - ANS ✓Rate of return
required by stockholders
CFA Exam
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller DoctorKen. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $10.99. You're not tied to anything after your purchase.
