SPRING 2022 BUS 498 EXIT

ASSESSMENT TEST
alfaz.aquib@northsouth.edu Switch account
 
Your email will be recorded when you submit this form
* Required

Finance major
Enter your name *

Your answer

Enter your Student ID *

Your answer

1. A 30-year bond issued by Gary's Plaid Pants Warehouse, Inc., in 2010 would now
trade in the *
A) Primary money market
B) Euro currency market
C) Derivative market
D) Secondary capital market

2. NASDAQ is a(n) ...... *

A) Auction market
B) Euro currency market
C) Derivative market
D) Secondary capital market

3. Investment bankers *
A) Accepts deposits from savers and lend them out to companies
B) Act as intermediaries between issuers of stock and investors
C) both (A) and (B)
D) None of the above

4. A 10-year corporate bond has an annual coupon payment of 9 percent. The bond is
currently selling at par ($1,000). Which of the following statements is most correct? *
A) The bond’s yield to maturity is 9 percent.
B) The bond's current yield is 9 percent
C) If the bond's yield to maturity remains constant, the bond's price will remain at par
D) all of the above

5. Which of the following software can you use to calculate the risk of a stock? *
A) Microsoft Access
B) Microsoft Word
C) Microsoft Excel
D) Microsoft Visio

5. Usury laws put a cap on the: *

A) interest rate credited by banks.
B) amount of loan that can be offered by banks.
C) interest rate charged by banks
D) none of the answers are correct

6. What was the significance of the Basel Accord? *

A) Risk-adjusted FDIC insurance premiums
B) Elimination of Regulation Q.
C) Standardizing capital requirements for banks
D) Increasing competition among banks

7. Considering the “Price” column of the following table, which type of chart would be
best to use if you want to visually represent the contribution of each item as part of the
total? Table is provided below (see image) *
A) Column chart
B) Line chart
C) Pie chart
D) Area chart

Table for Question 7

8. Which of the following is a problem using the dividend discount model to value
common stock? *
A) The model does not account for the risk of the stock.
B) The model does not consider the present value of the dividends.
C) The model does not consider that dividends may not be paid
D) The model does not account for small dividends.
9. The capital market line (CML) uses ____ as a risk measurement, whereas the
capital asset pricing model (CAPM) uses ____. *
A) Beta; total risk
B) Standard deviation; total risk
C) Standard deviation; systematic risk
D) Unsystematic risk; total risk

10. Lee Sun’s has sales of $3,000, total assets of $2,500, and a profit margin of 5%.
The firm has a total debt ratio of 40%. What is the return on equity? *
A) 6%
B) 8%
C) 10%
D) 12%

11. Which one of the following terms is defined as dividends paid expressed as a
percentage of net income? *
A) dividend retention ratio
B) dividend yield
C) dividend payout ratio
D) dividend portion

12. Monamy invested $9,250 in an account that pays 6 percent simple interest. How
much more could he have earned over a 7-year period if the interest had compounded
annually? *
A) $741.41
B) $773.58
C) $802.16
D) $833.33

13. You are getting ready to prepare pro forma statements for your business. Which
one of the following are you most apt to estimate first as you begin this process? * *
A) sales forecast
B) fixed assets
C) current expenses
D) projected net income

14. The beta of the market __________ *

A) is greater than 1
B) is less than 1
C) is 1
D) cannot be determined

15. If a firm has a debt-equity ratio of 1.0, then its total debt ratio must be which one of
the following? *
A) 2
B) 0.5
C) 1.5
D) 1

16. Unique Industries is investing in a new project. The minimum rate of return the firm
requires on this project is referred to as the: *
A) market rate of return
B) internal rate of return
C) cost of capital
D) none of the above

17. The proposition that a firm borrows up to the point where the marginal benefit of
the interest tax shield derived from increased debt is just equal to the marginal
expense of the resulting increase in financial distress costs is called: *
A) the static theory of capital structure
B) M&M Proposition I
C) M&M Proposition II
D) the capital asset pricing model

18. If an employee deposits TK 20 at the end of each month into his company's plan
which pays 6% interest compounded monthly, how much will he have in the account at
the end of 5 years? *
A) TK 1,301.01
B) TK 101.01
C) TK 112.74
D) TK 1,395.40

19. Dividend per share is equal to dividends paid: *

A) divided by the par value of common stock.
B) divided by the total number of shares outstanding.
C) divided by total shareholders’ equity.
D) multiplied by the par value of the common stock

20. Free cash flow is: *

A) without cost to the firm.
B) net income plus taxes.
C) an increase in net working capital.
D) cash that the firm is free to distribute to creditors and stockholders.

21. How much are you willing to pay for one share of Jumbo Trout stock if the
company just paid a $0.70 annual dividend, the dividends increase by 1.6 percent
annually, and you require a 10 percent rate of return? *
A) $8.29
B) $8.33
C) $8.46
D) $8.53

22. All else constant, a bond will sell at _____ when the coupon rate is _____ the yield
to maturity. *
A) a premium; less than
B) a premium; equal to
C) a premium; higher than
D) par ; higher than

23. __________ is the variability of return on stocks or portfolios not explained by

general market movements. It is avoidable through diversification. *
A) Systematic risk
B) Standard deviation.
C) Unsystematic risk
D) Coefficient of variation

24. You have purchased 200 shares of common stock at $50 per share by borrowing
from your broker. The initial margin requirement is 50%. How much you have
borrowed? *
A) $5,000.
B) $10,000.
C) $5,200.
D) $7,200

25. Which of the following does NOT characterize the money market? *
A) High liquidity
B) Securities are debt
C) Short maturity
D) High expected returns

26. Which of the following borrowers' demand for funds is least sensitive to interest
rates? *
A) Households
B) Business
C) Governments
D) Foreign Corporations

27. Which of the following is the major monetary policy-making body of the Federal
Reserve System? *
A) Federal Reserve Bank district presidents
B) Securities and Exchange Commission
C) U.S. House of Representatives
D) Federal Open Market Committee
28. Investors in mortgages are subject to ________ risk, which is generally not faced
by investors in other markets (like bonds). *
A) Prepayment
B) Default
C) interest rate
D) liquidity

29. Which of the following does the most to reduce default risk for future contracts? *
A) High Liquidity
B) Flexible delivery arrangements
C) Marking to market
D) Credit checks for both buyers and sellers

30. A bank enters into an interest rate swap making annual fixed rate payments of 8%
and receiving a floating rate equal to LIBOR + 2%. The notional principal on the swap
is $10 million. What is the first net payment under the swap if LIBOR is 7%? *
A) Bank pays $100,000
B) Bank receives $100,000
C) Bank pays $300,000
D) Bank receives $300,000

31. Projected future financial statements are called: *

A) plug statements.
B) pro forma statements.
C) reconciled statements.
D) aggregated statements.

32. The financial ratio measured as earnings before interest and taxes, divided by
interest expense is the: *
A) cash coverage ratio.
B) debt-equity ratio.
C) times interest earned ratio.
D) gross margin.

33. Havier’s has a profit margin of 6%, a return on assets of 8%, and an equity
multiplier of 1.4. What is the return on equity? *
A) 6.7%
B) 8.4%
C) 11.2%
D) 14.6%

34. Annuities where the payments occur at the end of each time period are called
_____ , whereas _____ refer to annuity streams with payments occurring at the
beginning of each time period. *
A) ordinary annuities; early annuities
B) late annuities; straight annuities
C) straight annuities; late annuities
D) ordinary annuities; annuities due

35. Matron Company offers a common stock that pays an annual dividend of $2.00 a
share. The company has promised to maintain a constant dividend. How much are
you willing to pay for one share of this stock if you want to earn 12% return on your
equity investments? *
A) $10.00
B) $13.33
C) $16.67
D) $18.88

36. _____ refers to the cash flows those result from the firm’s day to day regular
business activities. *
A) Cash flow from operating activities
B) Capital spending
C) Net working capital
D) Cash flow from assets

37. The variance of a portfolio of risky securities *

A) is a weighted sum of the securities' variances.
B) is the sum of the securities' variances.
C) is the weighted sum of the securities' variances and covariances.
D) is the sum of the securities' covariances

38. The concept of beta is most closely associated with: *

A) Correlation coefficients.
B) Mean-variance analysis.
C) Nonsystematic risk.
D) Systematic risk.

39. The risk-free rate is 5 percent. Stock B has a beta = 1.4. Market has a required
return of 11 percent. What is Stock B’s required return? *
A) 12.4%
B) 13.4%
C) 14.4%
D) 15.4%

40. If you believe in the ________ form of the EMH, you believe that stock prices
reflect all relevant information including historical stock prices and current public
information about the firm, but not information that is available only to insiders. *
A) Semi strong
B) strong
C) weak
D) all of them

Back

Submit
Page 14 of 14

Clear form
Never submit passwords through Google Forms.
This form was created inside of North South University. Report Abuse

 Forms