Since there are no tax consequences arising from trades in a 401(k) plan, it makes sense A) to trade often in an attempt to time the markets. B) to ignore this feature and stick to a sound investment approach. C) not to participate in the plan since you can’t write off tax losses. D) to […]
Date: September 19th, 2020
The Price-Earnings valuation model estimates the price of a share of stock today as the: A) sum of a forward looking P/E multiple and the EPS in the next period. B) product of the firm’s historic P/E multiple and the EPS in the next period. C) product of a forward looking P/E multiple and the […]
Date: September 19th, 2020
The minimum rate of return necessary to attract an investor to purchase or hold a security is referred to as the A) investor’s required rate of return. B) risk-free rate. C) stock’s beta. D) investor’s risk premium. ANSWER A
Date: September 19th, 2020
The ________ is used to determine the annual or semi-annual interest cash flow for a bond whereas the ________ is the rate used to determine the price of the bond. A) coupon rate; yield to maturity B) yield to maturity; coupon rate C) yield to maturity; discount rate D) current yield; yield to maturity […]
Date: September 19th, 2020
A potential employer is prohibited by the Fair Credit Reporting Act from checking your credit report. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
You are considering an investment in Citizens Bank Corp The firm has a beta of 1.6. Currently, U.S. Treasury bills are yielding 2.75% and the expected return for the S & P 500 is 14%. What rate of return should you expect for your investment in Citizens Bank? A) 15.39% B) 11.15% C) 20.75% D) […]
Date: September 19th, 2020
InfoTech Solutions Inc. has a historic P/E multiple of 26, a current EPS of $1.10 projected to grow by 5% in the coming year, and a forward looking P/E multiple of 22. With this information please estimate the current price of the firm’s stock A) $30.03 B) $28.60 C) $26.20 D) $25.41 ANSWER […]
Date: September 19th, 2020
Legacy Industries Inc. has a historic P/E multiple of 15, a current EPS of $2.50 projected to grow by 4% in the coming year, and a forward looking P/E multiple of 18. With this information please estimate the current price of the firm’s stock. A) $37.50 B) $46.80 C) $39.00 D) $48.20 ANSWER […]
Date: September 19th, 2020
Most bonds issued in the United States have ________ coupon payments and ________ face values. A) annual; $1,000 B) annual; $500 C) semi-annual; $1,000 D) semi-annual; $500 ANSWER C
Date: September 19th, 2020
When there is only the possibility of accidental loss, there is A) speculative risk. B) default risk. C) pure risk. D) fortuitous risk. ANSWER C
Date: September 19th, 2020
