In the forward market the bid-ask spreads begin to ________ as the maturity date of the contract grows closer. A) widen B) narrow C) stabilize D) disappear ANSWER Answer: A
Date: September 19th, 2020
Outlaws is a general goods retail chain in the High Plains region. Use the financial information in the table to calculate Outlaws maximum sustainable growth rate. Selected Ratios Outlaws Inc. Year 5 ROE 9.98% ROA 4.27% Net Profit Margin 2.15% Total Asset Turnover 1.99 Dividend Payout Rate 0% A) 11.0% B) 11.1% C) 11.2% D) […]
Date: September 19th, 2020
In a forward contract no monies change hands until the maturity date of the contract known as the ________, A) spot value date B) exercise date C) forward contract date D) forward settlement date ANSWER Answer: D
Date: September 19th, 2020
Exchange rates are reported as fractions with the ________ in the denominator and the ________ in the numerator. A) counter rate; base rate B) base rate; counter rate C) foreign currency; domestic currency D) domestic currency; foreign currency ANSWER B
Date: September 19th, 2020
There is an indirect rate of 0.74 between the American dollar and the Canadian dollar. How many American dollars could you buy for 5,000 Canadian dollars? A) $3,700 B) $7,432 C) $6,757 D) $5,424 ANSWER C
Date: September 19th, 2020
Scooby Snacks Inc is an all equity firm. At the end of the current year, the CFO expects EBIT to be $5M and the same earnings are expected annually in perpetuity. The company is not growing so CAPEX and investments in net working capital are zero. The cost of equity for Scooby Snacks Inc is […]
Date: September 19th, 2020
When buying foreign currency, you can expect to receive the rates quoted on the internet. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Cripple Creek Distilleries Inc is an all equity company with 20M shares outstanding. It’s stock last closed at $20. Cripple Creek has too much cash. The CEO, Levon Helm, wants to distribute the excess cash with an open market stock repurchase. He is contemplating buying back $5M worth of shares at a price of $20. […]
Date: September 19th, 2020
What is the term for the conditional mean of the probability distribution of future spot rates? A) the expected swap rate B) the future exchange rate C) the outright rate D) the expected future spot rate ANSWER Answer: D
Date: September 19th, 2020
The efficient market hypothesis states that: A) Requiring firms to issue more stock will reduce volatility. B) Requiring investors to hold securities longer will reduce volatility. C) Electing a pro-business Republican president makes the market more efficient. D) Taxing security returns will raise prices . E) Markets price securities fairly at all times and that […]
Date: September 19th, 2020
