A bond matures in 20 years, at which time it pays the owner $1,000. It also pays $70 at the end of each of the next 20 years. If similar bonds are currently yielding 7%, what is the market value of the bond? A) under $1,000 B) over $1,000 C) exactly $1,000 D) cannot be […]
Date: September 19th, 2020
Market value changes in net worth arise from current period savings or dissavings. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
A liquidity-risk premium is the additional return required by investors for securities that cannot quickly be converted into cash at a reasonably predictable price. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
What is diversifying among different kinds of assets known as? A) multi-diversification B) portfolio funding C) capital asset classification D) asset allocation ANSWER D
Date: September 19th, 2020
Your son is born today and you want to make him a millionaire by the time he is 50 years old. You deposit $10,700 in an investment account and want to know what annual interest rate must you earn in order to have the account value equal to $1,000,000 on your son’s 50th birthday. A) […]
Date: September 19th, 2020
Which of the following lessons from the Great Recession is NOT true? A) The financial crisis really drove home the point that capital structure DOES matter in that firms with too much debt suffered greatly. B) Firms that relied too much on short-term financing were severely affected by the global liquidity crisis. C) Capital markets […]
Date: September 19th, 2020
Based on the information contained in Tables 4-5, what was Yen’s quick ratio at the end of 2010? A) 2.93 B) 2.10 C) 1.79 D) 1.43 ANSWER B
Date: September 19th, 2020
Lou Hinton’s savings account (offering 12% simple interest) showed the following activity for the month of June: Opening balance $2,000 6/10 Deposit 1,000 6/20 Withdrawal ( 800) 6/30 Ending Balance 2,200 Interest earned in June with the minimum balance method would be A) $20.00. B) $22.00. C) $30.00. D) unknown. ANSWER A
Date: September 19th, 2020
________ took place in financial markets during the Great Recession because large financial institutions took excess risks to realize abnormal positive returns in the housing market while they were simultaneously protected from abnormal losses by being “too-big-to-fail.” A) Disintermediation B) Deregulation C) Corporate tax reform D) Moral hazard ANSWER D
Date: September 19th, 2020
S-type corporation have all the following advantages EXCEPT: A) they are taxed as a partnership. B) the owners have limited liability. C) distributions are taxed twice, similar to corporate dividend payments. D) all owners must be people, not corporations. ANSWER C
Date: September 19th, 2020
