fin 320 71 final exam Questions Correctly Solved|2024
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Course
Fin 320
Institution
Fin 320
a call provision grants the bond issuer the: - ️️option of repurchasing the bonds prior to maturity at a pre-specified price
a corporation - ️️is a legal entity separate from its owners
a protective covenant - ️️limits the actions of the borrower
a risky security has less risk than t...
fin 320 71 final exam Questions
Correctly Solved|2024
a call provision grants the bond issuer the: - ✔ ✔ option of repurchasing the bonds prior to maturity
at a pre-specified price
a corporation - ✔ ✔ is a legal entity separate from its owners
a protective covenant - ✔ ✔ limits the actions of the borrower
a risky security has less risk than the overall market. What must the beta of this security be? - ✔ ✔ >
0 but < 1
a specialist is an - ✔ ✔ NYSE member who functions as a dealer for a limited number of securities
an efficient capital market is best defined as a market in which security prices reflect which one of the
following - ✔ ✔ available information
an income statement prepared according to GAAP - ✔ ✔ records expenses based on the matching
principle
builders outlet just hired a new chief financial officer. to get a feel for the company she wants to
compare the firms sales and cost over the past 3 years determine if any trends are present and also
determine where the firm might need to make changes. which one of the following statements will best
suit her purpose. - ✔ ✔ common size income statement
by definition, a bank that pays simple interest on a savings account will pay interest - ✔ ✔ only on
the principal amount originally invested
cash flow from assets is defined as - ✔ ✔ operating cash flow minus the the change in net working
capital minus net capital spending
depreciation does which one of the following for a profitable firm - ✔ ✔ lower taxes
Dexter inc. has a bond issue outstanding. the issues indenture provision prohibits the firm from
redeeming the bonds during the first three years. this provision is referred to as the _ provision - ✔ ✔
deferred call
financial leverage - ✔ ✔ increases the potential return to the shareholders
if the financial markets are efficient then - ✔ ✔ stock prices should only respond to unexpected
news and events
, if the financial markets are semi strong form efficient then - ✔ ✔ only individuals with private
information have a market place advantage
investors require a 4 percent return on risk free investments. on a particular risky investment, investors
require an excess return of 7 percent in addition to the risk free rate of 4 percent. what is the excess
return called - ✔ ✔ risk premium
jenny needs to borrow 16000$ for 3 years. the loan will be repaid in one lump sum at the end of the
loan term. which one of the following interest rates is best for jenny - ✔ ✔ 8% simple interest
lee pays one percent per month interest on his credit card account. when his monthly rate is multiplied
by 12, the resulting answer is referred to as - ✔ ✔ annual percentage rate
limited liability companies are primarily designed to - ✔ ✔ provide limited liability while avoiding
double taxation
Lisa has 1000$ in cash today. which of the following investment options is most apt to double her
money - ✔ ✔ 8% interest for 9 years
miller farm products is issuing a 15 year, unsecured bond. based on this information you know this debt
can be described as a - ✔ ✔ debenture
on which one of the following dates do dividends become a liability of the issuer for accounting
purposes - ✔ ✔ on the declaration date
over the period of 1926-2008, which one of the following investment classes had the highest volatility of
returns - ✔ ✔ small company stocks
over the period of 1926-2008: - ✔ ✔ the risk premium on stocks exceeded the risk premium on
bonds
portfolio diversification eliminates which one of the following - ✔ ✔ unsystematic risk
Sara is investing 1000 today. which one of the following will increase the future value of that amount -
✔ ✔ increasing the interest rate
Steve opened a used book store and is both the 100 percent owner and the stores manager. which type
of business entity does Steve own if she is personally liable for all the stores debts? - ✔ ✔ sole
proprietorship
the accounting statement of which measures the revenues, expenses, and net income of a firm over a
period of time is called the - ✔ ✔ income statement
the higher the standard deviation of returns on a security, the _ the expected rate of return and the _
the risk - ✔ ✔ higher;higher
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