The Druid Fund has a NAV of $9.00 and an offer price of $9.45. We know, then, that A) Druid is a load fund. B) Druid is about to be issued to the public as a no-load fund with a $0.45 offer cost. C) shares can be purchased only through a stockbroker. D) there is […]
Date: September 19th, 2020
Consider the four components identified by the author in the sustainable growth equation. Which if nay of these components are heavily influenced by executive management? What will be an ideal response? ANSWER Each of the four components is heavily influenced by management. The profit margin is a function of how well managers control […]
Date: September 19th, 2020
Assume that you have $165,000 invested in a stock whose beta is 1.25, $85,000 invested in a stock whose beta is 2.35, and $235,000 invested in a stock whose beta is 1.11. What is the beta of your portfolio? A) 1.85 B) 1.57 C) 1.37 D) 2.01 ANSWER C
Date: September 19th, 2020
The distinguishing feature of a corporation is that: A) a corporation is a legally defined, artificial being, separate from its owners. B) there are no legal differences between the corporation and its owners. C) it spreads the liability for its corporate obligations to all shareholders. D) it provides limited liability only to small shareholders. […]
Date: September 19th, 2020
A redemption charge is a A) back-end load. B) font-end load. C) management fee. D) carrying fee. ANSWER A
Date: September 19th, 2020
Based on the information contained in Tables 4-5, what was the total amount of Yen’s common stock dividend for 2010? A) $9,000 B) $8,000 C) $12,800 D) $17,000 ANSWER A
Date: September 19th, 2020
Dynamo Engines Inc., has an ROA of 10%, a profit margin of 6%, an assets to equity ratio of 1.30 and a retention ratio of 0.70. What is the firm’s sustainable growth rate? What will be an ideal response? ANSWER Sustainable growth rate = ROE * b, where b is the retention ratio. […]
Date: September 19th, 2020
A real interest rate is the interest rate on a fixed-income security that has no risk in an economic environment of high inflation. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Some financial institutions offer continuous compounding. This means that A) your effective yield will be about 20% higher than daily compounding. B) your effective yield will be only slightly higher than daily compounding. C) in reality they are offering only simple interest. D) you must deposit at least $10,000 to open an account offering this […]
Date: September 19th, 2020
Interest is deducted from the credit extended at the beginning of the loan under the A) simple interest method. B) add-on interest method. C) discount interest method. D) Rule of 78. ANSWER C
Date: September 19th, 2020
