The bid price is the price that a dealer will pay for a security; the asked price is the price at which she will sell a security. Indicate whether the statement is true or false ANSWER TRUE
The chief financial officer (CFO) is responsible for overseeing financial planning, corporate strategic planning, and controlling the firm’s cash flow. Indicate whether the statement is true or false ANSWER TRUE
The cash flow cycle: A) describes the flow of cash through a company. B) illustrates that profits and cash flows are the same. C) reminds a financial manager that profits are important. D) focuses on financing activities only. ANSWER A
If the future value of annuity A is greater than the future value of annuity B, then the present value of annuity A must also be greater than the present value of annuity B. Indicate whether the statement is true or false ANSWER TRUE
Determining how a firm should raise money to fund its long-term investments is referred to as capital structure decisions. Indicate whether the statement is true or false ANSWER TRUE
All of the following are equity accounts on a balance sheet EXCEPT A) retained earnings. B) paid-in capital. C) cash. D) common stock. ANSWER C
Baker Corp is required by a debt agreement to maintain a current ratio of at least 2.5, and Baker’s current ratio now is 3. Baker wants to purchase additional inventory for its upcoming Christmas season, and will pay for the inventory with short-term debt. How much inventory can Baker purchase without violating its debt agreement […]
Which of the following statements about the coverage for other structures (Coverage B) under the Homeowners 3 policy is true? A) The coverage applies to a detached garage or tool shed on the residence premises. B) Structures attached to the dwelling by a fence or utility line are considered to be part of the dwelling […]
A corporate treasurer is typically responsible for cash management, credit management, and raising capital. Indicate whether the statement is true or false ANSWER TRUE
Assume that an investment is forecasted to produce the following returns: a 20% probability of a 12% return; a 50% probability of a 16% return; and a 30% probability of a 19% return. What is the standard deviation of return for this investment? A) 5.89% B) 16.1% C) 15.7% D) 2.43% ANSWER D