BFIN 300 MIDTERM REVIEW EXAM QUESTIONS WITH COMPLETE SOLUTIONS
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Course
BFIN 300
Institution
BFIN 300
BFIN 300 MIDTERM REVIEW EXAM QUESTIONS WITH COMPLETE SOLUTIONS
Which of the following ratios are market-based ratios? - Answer-P/E ratio and P/BV ratio
Which of the followings are the correct set of components of ROE? - Answer-Profit margin, asset turnover, equity multiplier
Find Current r...
BFIN 300 MIDTERM REVIEW EXAM
QUESTIONS WITH COMPLETE
SOLUTIONS
Which of the following ratios are market-based ratios? - Answer-P/E ratio and P/BV ratio
Which of the followings are the correct set of components of ROE? - Answer-Profit
margin, asset turnover, equity multiplier
Find Current ratio: Company A's balance sheet shows current assets of $6,300, fixed
assets of $32,000, total long-term liabilities of $16,200 and total equity of $18,100. -
Answer-1.58x
Interest earned on both the initial principal and the interest reinvested from the prior
periods is called - Answer-Compound interest
Don Lemon invested $2,000 six years ago at 4.5%. He spends his earnings as soon as
he earns any interest so he only receives interest on his initial investment. Which type of
interest is Mr. Lemon earning? - Answer-Simple interest
Alan Fishman just computed the present value of a $10,000 bonus he will receive in the
future. The interest rate he used in this process is referred to as which one of the
following? - Answer-Discount rate
The process of determining the present value of future cash flows in order to know their
worth today is referred to as - Answer-Discounted cash flow valuation
Interest earned on interest is referred to as the of interest - Answer-
compounding
Which is the best example of a perpetuity? - Answer-Pension plan with TIAA
Capital One is charging you 1.5% per month on your credit card. What is your Annual
Percentage Rate (APR)? - Answer-18.0%
During the Global Financial Crisis, Interest Only financial products were a significant
problem. Which is the best example of an I/O security? - Answer-Corporate bond
Which is the best definition of an annuity? - Answer-A cash flow stream where a fixed
amount is received every year
A bonds coupon rate is equal to the annual interest divided by which one of the
following? - Answer-Face Value
The bond principal is repaid on which one of these dates? - Answer-Maturity date
Protective covenants: - Answer-Are primarily designed to protect bondholders.
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