A “normal” yield curve is A) upward sloping, then downward sloping. B) upward sloping. C) downward sloping, then upward sloping. D) downward sloping. ANSWER B
Date: September 19th, 2020
Consider the equation for present value. If you wished to increase the present value of a future amount by changing only one variable, which of the following actions should you take? A) increase the time period B) decrease the future value C) decrease the interest rate D) This statement cannot be answered with the information […]
Date: September 19th, 2020
Auto loan payments are an example of an inflexible expense. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Bob invested $2,000 in an investment fund on his 21st birthday. The fund pays 7% interest compounded semiannually. Bob is celebrating his 50th birthday today. Bob decides he wants to retire on his 60th birthday and he wants to withdraw $75,000 per year, the first withdrawal on his 60th birthday and the last withdrawal on […]
Date: September 19th, 2020
Rent and life insurance expenses are examples of flexible expenses. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
You have accumulated $8,000 toward the down payment on a piece of lake front property in rural Minnesota. You wish to accumulate $12,000 for the down payment in four years. If you choose not to contribute more new funds to your down payment fund, what rate of return must your fund earn to reach your […]
Date: September 19th, 2020
What is the term for a graphical representation of the relationship between interest rates and the maturities of debt securities? A) term curve B) inflationary expectations C) yield curve D) maturity chart ANSWER C
Date: September 19th, 2020
Which of the following is NOT considered to be a disadvantage of the sole proprietorship form of a business organization? A) Limited ability to raise capital B) Its life is limited to that of the owner C) Unlimited liability of business owners D) Fewer regulations and reporting requirements ANSWER D
Date: September 19th, 2020
If a firm has a positive debt-equity ratio, then the unlevered beta is greater than the levered beta. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Which of the following ratios would be the most useful to assess the risk associated with a firm being able to pay off its short-term line of credit? A) the acid test ratio B) the fixed asset turnover C) the operating profit margin D) return on equity ANSWER A
Date: September 19th, 2020
