Flexible expenses are best understood as those expenses over which you have little or no control. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Changes in the general economy, like changes in interest rates or tax laws, represent what type of risk? A) unsystematic risk B) company-unique risk C) market risk D) diversifiable risk ANSWER C
Date: September 19th, 2020
The Ajax Fund, which trades on the New York Stock Exchange, was quoted with a NAV of $10 and an offer price of $10.50. Thus, we know the fund is A) open end with a load. B) closed end with a load. C) closed end with no load. D) open end with no load. […]
Date: September 19th, 2020
If you wish to accumulate $200,000 in the child’s college fund after 18 years, and can invest at a 7.5% annual rate, how much must you invest at the end of each year if the first deposit is made at the end of the first year? What will be an ideal response? ANSWER […]
Date: September 19th, 2020
The one-year interest rate is 4%. The interest rate for a two-year security is 6%. The one-year interest rate one year from now is 8.34%. According to the liquidity preference theory, the risk premium for the second one-year investment is A) 0.34%. B) 0.50%. C) 1.66%. D) 0.30%. ANSWER D
Date: September 19th, 2020
The “bottom line” to a personal income statement is the contribution to savings figure. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
WPM, Inc. has current assets of $8,000,000, current liabilities of $4,000,000, inventory of $1,320,000, and sales of $12,000,000. What is the acid test ratio? A) 0.1 B) 1.67 C) 0.22 D) 2.0 ANSWER B
Date: September 19th, 2020
Betty borrows $60,000 at 12 percent compounded annually. The loan is to be repaid in five equal annual end-of-year installments. How much must each loan payment be? What will be an ideal response? ANSWER $16,644.58, based on PVA = $60,000; N = 5; I = 12%; PMT = $16,644.58
Date: September 19th, 2020
A positive contribution to savings must lead to an increase in assets, a decrease in liabilities, or a combination of each. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
You are considering an investment in a U.S. Treasury bond but you are not sure what rate of interest it should pay. Assume that the real risk-free rate of interest is 1.0%; inflation is expected to be 1.5%; the maturity risk premium is 2.5%; and, the default risk premium for AAA rated corporate bonds is […]
Date: September 19th, 2020
