A loan that is usually a one-time loan made to a borrower who needs funds for a specific purpose for a short period is called a ________. A) term loan B) bill of exchange C) mortgage loan D) single-payment note ANSWER D
Date: September 19th, 2020
The ________ is the lowest rate of interest charged on business loans by the nation’s leading banks to their best business borrowers. A) prime rate B) commercial paper rate C) federal funds rate D) treasury bill rate ANSWER A
Date: September 19th, 2020
An INVERTED yield curve is characterized by long-term rates exceeding short-term rates. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Under conditions of perfect capital markets, M&M insist that the value of the levered firm is greater than the value of the unlevered firm. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
A bond rated “D” by Standard and Poor’s rating service is in default on its financial commitments. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Stage 3 of the industry life cycle is characterized by all of the following EXCEPT: A) competition intensifies as more and more firms enter the industry. B) there is little demand for the company’s products and services. C) revenues continue to grow, but at a slower pace. D) firms become more efficient at maintaining costs. […]
Date: September 19th, 2020
Modigliani and Miller (M&M) proposed a model in which, given certain restrictive assumptions, the capital structure of a firm does not impact the value of the firm. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
________ analysis is a technique used to assess the returns associated with various cost structures and levels of sales. A) Time-series B) Marginal C) Breakeven D) Ratio ANSWER C
Date: September 19th, 2020
The average working capital gap seems to differ across industries in the United States. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Under conditions of perfect capital markets, M&M suggest that the average cost of capital for the firm will increase with the addition of debt. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
