Information on the accounting policies, procedures, calculations, and transactions underlying entries in the financial statements can be found on ________. A) the notes to the financial statements B) the statement of retained earnings C) the proxy statement D) the management discussion and analysis (MD&A) ANSWER A
Date: September 19th, 2020
Generally, an increase in risk will result in ________. A) a lower required return or interest rate B) a higher required return or interest rate C) a higher return on investment D) a lower return on investment ANSWER B
Date: September 19th, 2020
FASB Standard No. 52 mandates that U.S.-based companies must translate their foreign-currency-denominated assets and liabilities into dollars using the ________. A) historical rate B) current rate C) average rate D) rate prescribed by the SEC ANSWER B
Date: September 19th, 2020
Nominal rate of interest is equal to ________. A) the real rate plus an inflationary expectation B) the real rate plus a risk premium C) the risk-free rate plus an inflationary expectation D) the risk-free rate plus a risk premium ANSWER D
Date: September 19th, 2020
The ________ rate is typically the nominal rate of interest on a three-month U.S. Treasury bill. A) expected B) real C) risk-free D) premium ANSWER C
Date: September 19th, 2020
The basic inputs to an effective financial analysis are a firm’s income statement and the balance sheet. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Candy Corporation had pretax profits of $1.2 million, an average tax rate of 34 percent, and it paid preferred stock dividends of $50,000. There were 100,000 shares outstanding and no interest expense. What was Candy Corporation’s earnings per share? A) $3.91 B) $4.52 C) $7.42 D) $7.59 ANSWER C
Date: September 19th, 2020
A normal yield curve is upward-sloping and indicates generally cheaper short-term borrowing costs than long-term borrowing costs. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The liquidity preference theory suggests that for any given issuer, long-term interest rates tend to be higher than short-term rates due to the lower liquidity and higher responsiveness to general interest rate movements of longer-term securities; this causes the yield curve to be upward-sloping. Indicate whether the statement is true or false ANSWER […]
Date: September 19th, 2020
The ________ represents a summary statement of a firm’s financial position at a given point in time. A) income statement B) balance sheet C) statement of cash flows D) statement of retained earnings ANSWER B
Date: September 19th, 2020
