BFIN 300 MIDTERM EXAMINATION QUESTIONS WITH CERTIFIED ANSWERS – UPDATED!!!!
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Course
BFIN 300
Institution
BFIN 300
BFIN 300 MIDTERM EXAMINATION QUESTIONS WITH CERTIFIED ANSWERS – UPDATED!!!!
Which is the best definition of an annuity?
A. A cash flow stream which arises when the stream of consistent cash flows continues forever
B. Preferred shares
C. A cash flow stream where a fixed amount is received ev...
BFIN 300 MIDTERM EXAMINATION
QUESTIONS WITH CERTIFIED
ANSWERS – UPDATED!!!!
Which is the best definition of an annuity?
A. A cash flow stream which arises when the stream of consistent cash flows continues
forever
B. Preferred shares
C. A cash flow stream where a fixed amount is received every year
D. Effective annual rate - Answer-C. A cash flow stream where a fixed amount is
received every year
What is a financial security?
A. Ease with which an owner of an asset can sell it
B. A claim against assets of cash flows of a company
C. Dow Jones Industrial average
D. Voting rights to elect firm directors - Answer-B. A claim against assets of cash flows
of a company
Who is the primary regulator of the US securities markets?
A. Federal Reserve Bank of NY
B. Chicago Board of Options Exchange
C. Securities and Exchange Commission
D. NY Stock Exchange - Answer-C. Securities and Exchange Commission
The Securities and Exchange Commission does all of the following except
A. Licensing securities professionals
B. Provide investors with complete disclosure of material information on listed securities
C. Regulates US Stock Exchange
D. Regulates all national banks in the US - Answer-D. Regulates all national banks in
the US
Which of the following is a security traded in the US money market?
A. Mortgage-backed securities
B. Treasury Bills
C. Preferred Stock
D. Corporate Bonds - Answer-B. Treasury Bills
What is the best definition of a derivative in the context of securities markets?A. The
degree to which an asset or security can be bought or sold in the market without
affecting its price
B. Buying or selling a stock at the current market price
C. Financial decisions and their impact on the value of a company
D. A security where the value is based on the value of another security - Answer-D. A
security where the value is based on the value of another security
, A Johnson & Johnson bond pays an 8% coupon rate on a bond provided that its
earnings exceed an ROE of 8%. What type of security is this?
A. Perpetual bond
B. Equity
C. Dividend
D. Income bond - Answer-D. Income bond
Which security has the greatest preference in liquidation?
A. Equity
B. Preferred shares
C. Subordinated debt
D. Senior debt - Answer-D. Senior debt
Which two cash flows are received by a typical bond?
A. Dividends and Interest
B. Share sale and principal at maturity
C. Dividends and share sale
D. Interest and principal at maturity - Answer-D. Interest and principal at maturity
Which best explains a fixed coupon bond?
A. Sukuk
B. Fixed coupon paid until maturity, and lump sum returned at maturity
C. Fixed coupon paying bond with no maturity
D. A debt security that promises one payment in the future. - Answer-B. Fixed coupon
paid until maturity, and lump sum returned at maturity
A bond coupon rate is equal to the annual interest divided by which of the following?
A. Call Price
B. Current Price
C. Face Value
D. Clean Price
E. Dirty Price - Answer-C. Face Value
Which of the following is an example of an indirect agency cost?
A. Unnecessary corporate expenditure
B. Management auditing expense
C. A lost opportunity
D. All of the above - Answer-C. A lost opportunity
Which of the following forms of business organization is subject to double taxation?
A. Corporation
B. Partnership
C. Limited Partnership
D. Sole Proprietorship - Answer-A. Corporation
Control of a firm ultimately rests with
A. The CEO
B. The SEC
C. The Stockholders
D. The Founder - Answer-C. The Stockholders
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