FIN 2000 Certification Review Exam Questions And Verified Correct Answers.
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Course
FIN.
Institution
FIN.
The market risk premium is - correct answer the difference between the return on the market and the risk-free rate of return.
Which one of the flowing risks of a stock is not likely to be an unsystematic, diversifiable risk?
A. The risk that the founder and ...
The market risk premium is - correct answer the difference between the return on
the market and the risk-free rate of return.
Which one of the flowing risks of a stock is not likely to be an unsystematic, diversifiable risk?
A. The risk that the founder and CEO retires
B. The risk that a product design is faulty, and the product must be recalled
C. The risk that your best employees will be hired away
D. The risk that the new product you expect your R&D division to produce will not materialize
E. The risk that oil prices rise, increasing production costs - correct answer E. The
risk that oil prices rise, increasing production costs
If the line measuring a stock's historic returns against the market's historic returns has a slopegreater
than 1.0, then the: - correct answer stock has a beta exceeding 1.0
An implicit cost of increasing the proportion of debt in a firm's capital structure is that - correct answer
equityholders will demand a higher rate of return
When determining the cost of capital for a new project, the firm should use the - correct answer
firm's weighted-average cost of capital
Which of the following is a problem with payback period that is not a problem with discountedpayback?
A. Cash flows beyond the payback year are ignored.
B. Worthwhile long-lived projects may be rejected.
C. The cut-off period is arbitrary.
D. Negative net present value projects may be accepted.
E. All of these are problems with both payback and discounted payback - correct answer
E. All of these are problems with both payback and discounted payback
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