A firm’s credit standards are the minimum requirements for extending credit to a customer. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The gives the bond issuer an option to redeem a specified fraction of the bond issue within a specified period at a predetermined price, but only by using funds from a subsequent equity offering. a. subsequent events provision b. clawback provision c. contingency provision d. conversion provision ANSWER B
Date: September 19th, 2020
With a make whole call provision: a. the firm to pay a call price that is sufficient to provide bondholders an ex post return equal to the return they would have received on a noncallable Treasury bond with the same original maturity as the called bond. b. the firm must retire either the entire (or […]
Date: September 19th, 2020
_ has become an important means by which huge infrastructure projects are privately financed. a. Private placement financing b. Infrastructure funding c. Project finance d. Country finance ANSWER C
Date: September 19th, 2020
By increasing collection expenditures, a firm can decrease bad debt losses up to a point, beyond which bad debts cannot be economically reduced. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The average investment of a firm in accounts receivable is equal to the firm’s total variable cost of annual sales divided by its average collection period. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
In analyzing an applicant’s creditworthiness, a credit manager typically gives primary attention to two of the five C’s of credit—collateral and condition—since they represent the most basic requirements for extending credit to an applicant. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
If a gold producer wishes to employ a non-contingent hedge, it should use a(n) (i) contract, while if it wishes to employ a contingent hedge (i.e., to hedge only down-side risk), it should use a(n) (ii) contract. (i) (ii) a. forward put option b. put option forward c. forward call option d. call option forward […]
Date: September 19th, 2020
The objective for managing accounts receivable is to avoid credit sales as much as possible. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Firms that face a __ tax rate structure have an incentive to hedge, because it can reduce the firm’s expected tax liability. a. flat b. regressive (or concave) c. decelerating d. progressive (or convex) ANSWER D
Date: September 19th, 2020
