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Composed & Solved

MGT201 Online Quiz#4 Current 400 MCQs Solved


Question # 1 of 15 ( Start time: 12:09:58 AM !otal Mar"s: 1 An annuit# due is al$a#s $ort% &&&&& a 'ompara(le annuit#) Sele't 'orre't option: *ess t%an More t%an +,ual to Can not (e found from t%e -iven information Question # 2 of 15 ( Start time: 12:11:10 AM !otal Mar"s: 1 .%ere t%e sto'" points $ill lie/ if a sto'" is a part of totall# diversified portfolio0 Sele't 'orre't option: 1t $ill lie (elo$ t%e re-ression line 1t $ill line a(ove t%e re-ression line 1t $ill line e2a'tl# on t%e re-ression line 1t $ill (e tan-ent to t%e re-ression line Question # 3 of 15 ( Start time: 12:11:45 AM !otal Mar"s: 1 .%at is t%e easiest met%od to diversif# a$a# firm6spe'ifi' ris"s0 Sele't 'orre't option: !o (u# sto'"s $it% a (eta of 1)0 !o (uild a portfolio $it% 5610 individual sto'"s !o pur'%ase t%e s%ares of a mutual fund !o pur'%ase sto'"s t%at plot a(ove t%e se'urit# mar"et line Question # 4 of 15 ( Start time: 12:12:23 AM !otal Mar"s: 1 7ominal 1nterest 8ate is also "no$n as: Sele't 'orre't option: +ffe'tive interest 8ate Annual per'enta-e rate 9eriodi' interest rate 8e,uired interest rate Question # 5 of 15 ( Start time: 12:13:02 AM !otal Mar"s: 1 .%en ta2es are 'onsidered/ t%e value of a levered firm e,uals t%e value of t%e&&&&&&&&) Sele't 'orre't option:

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:nlevered firm :nlevered firm plus t%e value of t%e de(t :nlevered firm plus t%e present value of t%e ta2 s%ield :nlevered firm plus t%e value of t%e de(t plus t%e value of t%e ta2 s%ield Question # ; of 15 ( Start time: 12:14:15 AM !otal Mar"s: 1 !%e &&&&&&&&&& t%e 'oeffi'ient of variation &&&&&&&& t%e relative ris" of t%e investment) Sele't 'orre't option: *ar-er< *ar-er *ar-er< Smaller Smaller< *ar-er Smaller< Smaller Question # 5 of 15 ( Start time: 12:15:05 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 'orre't re-ardin- t%e opportunit# 'ost of 'apital for a pro=e't0 Sele't 'orre't option: !%e opportunit# 'ost of 'apital is t%e return t%at investors -ive up (# investin- in t%e pro=e't rat%er t%an in se'urities of e,uivalent ris") >inan'ial mana-ers use t%e 'apital asset pri'in- model to estimate t%e opportunit# 'ost of 'apital !%e 'ompan# 'ost of 'apital is t%e e2pe'ted rate of return demanded (# investors in a 'ompan# All of t%e -iven options Question # 8 of 15 ( Start time: 12:15:4; AM !otal Mar"s: 1 >or $%i'% of t%e follo$in- 'osts is it -enerall# ne'essar# to appl# a ta2 ad=ustment to a #ield measure0 Sele't 'orre't option: Cost of de(t Cost of preferred sto'" Cost of 'ommon e,uit# Cost of retained earnin-s Question # 9 of 15 ( Start time: 12:1;:51 AM !otal Mar"s: 1 .%at is differen'e (et$een s%ares and (onds0 Sele't 'orre't option: ?onds are representin- o$ners%ip $%ereas s%ares are not Composed & Solved

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S%ares are representin- o$ners%ip $%ereas (onds are not S%ares and (onds (ot% represent e,uit# S%ares and (ond (ot% represent lia(ilities Question # 10 of 15 ( Start time: 12:15:1; AM !otal Mar"s: 1 .%i'% of t%e follo$in-s e2pressed t%e proposition t%at t%e 'ost of e,uit# is a positive linear fun'tion of 'apital stru'ture0 Sele't 'orre't option: !%e Capital Asset 9ri'in- Model M&M 9roposition 1 M&M 9roposition 11 !%e *a$ of @ne 9ri'e Question # 11 of 15 ( Start time: 12:15:55 AM !otal Mar"s: 1 !%e 'urrent #ield on a (ond is e,ual to &&&&&&&&) Sele't 'orre't option: Annual interest divided (# t%e 'urrent mar"et pri'e !%e #ield to maturit# Annual interest divided (# t%e par value !%e internal rate of return Question # 12 of 15 ( Start time: 12:18:40 AM !otal Mar"s: 1 .%en a (ond $ill sell at a dis'ount0 Sele't 'orre't option: !%e 'oupon rate is -reater t%an t%e 'urrent #ield and t%e 'urrent #ield is -reater t%an #ield to maturit# !%e 'oupon rate is -reater t%an #ield to maturit# !%e 'oupon rate is less t%an t%e 'urrent #ield and t%e 'urrent #ield is -reater t%an t%e #ield to maturit# !%e 'oupon rate is less t%an t%e 'urrent #ield and t%e 'urrent #ield is less t%an #ield to maturit# Question # 13 of 15 ( Start time: 12:19:15 AM !otal Mar"s: 1 .%i'% of t%e follo$in- formulas represents a 'orre't 'al'ulation of t%e de-ree of operatinlevera-e0 Sele't 'orre't option: (Q 6 Q?+ AQ Composed & Solved

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(+?1! A (+?1! 6 >C BQ(96C D >CE ABQ(96C E Q(96C A BQ(96C 6 >CE Question # 14 of 15 ( Start time: 12:19:31 AM !otal Mar"s: 1 .%at are t%e Fire't 'laim se'urities0 Sele't 'orre't option: !%e se'urities $%ose value depends on t%e 'as% flo$s -enerated (# t%e underl#in- assets !%e se'urities $%ose value depends on t%e value of t%e underl#in- assets !%e se'urities t%at do not dire'tl# -enerate an# returns for its investors All of t%e -iven options Question # 15 of 15 ( Start time: 12:20:1; AM !otal Mar"s: 1 Companies and individuals runnin- different t#pes of (usinesses %ave to ma"e t%e '%oi'es of t%e asset a''ordin- to $%i'% of t%e follo$in-0 Sele't 'orre't option: *ife span of t%e pro=e't Cost of t%e 'apital 8eturn on asset 7one of t%e -iven options Question # 2 of 15 ( Start time: 12:31:43 AM !otal Mar"s: 1 1n t%e dividend dis'ount model/ _____ $%i'% of t%e follo$in- are not in'orporated into t%e dis'ount rate0 Sele't 'orre't option: 8eal ris"6free rate 8is" premium for sto'"s 8eturn on assets +2pe'ted inflation rate Question # 3 of 15 ( Start time: 12:32:15 AM !otal Mar"s: 1 .%i'% of t%e follo$in- 'ould 7@! (e defined as t%e 'apital stru'ture of t%e Compan#0 Sele't 'orre't option: !%e firmGs mi2 of Assets and lia(ilities !%e firmGs 'ommon sto'"s onl# !%e firmGs de(t6e,uit# ratio All of t%e -iven options Composed & Solved

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Question # 4 of 15 ( Start time: 12:32:41 AM !otal Mar"s: 1 An impli'it 'ost of addinde(t to t%e 'apital stru'ture is t%at it: Sele't 'orre't option: Adds interest e2pense to t%e operatin- statement 1n'reases t%e re,uired return on e,uit# 8edu'es t%e e2pe'ted return on assets Fe'reases t%e firmGs (eta Question # 5 of 15 ( Start time: 12:33:05 AM !otal Mar"s: 1 .%# 'ommon sto'" of a 'ompan# must provide a %i-%er e2pe'ted return t%an t%e de(t of t%e same 'ompan#0 Sele't 'orre't option: !%ere is less demand for sto'" t%an for (onds !%ere is -reater demand for sto'" t%an for (onds !%ere is more s#stemati' ris" involved for t%e 'ommon sto'" !%ere is a mar"et premium re,uired for (onds Question # ; of 15 ( Start time: 12:33:38 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! an e2ample of %#(rid e,uit# Sele't 'orre't option: Converti(le ?onds Converti(le Fe(enture Common s%ares 9referred s%ares Question # 5 of 15 ( Start time: 12:34:11 AM !otal Mar"s: 1 A set of possi(le values t%at a random varia(le 'an assume and t%eir asso'iated pro(a(ilities of o''urren'e are referred to as ________) Sele't 'orre't option: 9ro(a(ilit# distri(ution !%e e2pe'ted return !%e standard deviation Coeffi'ient of variation Question # 8 of 15 ( Start time: 12:34:40 AM !otal Mar"s: 1 .%i'% if t%e follo$in- is (are true0 1) !%e dividend -ro$t% model %olds if/ at some point Composed & Solved

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in time/ t%e dividend -ro$t% rate e2'eeds t%e sto'"Hs re,uired return) 11) A de'rease in t%e dividend -ro$t% rate $ill in'rease a sto'"Hs mar"et value/ all else t%e same) 111) An in'rease in t%e re,uired return on a sto'" $ill de'rease its mar"et value/ all else t%e same) Sele't 'orre't option: 1/ 11/ and 111 1 onl# 111 onl# 11 and 111 onl# Question # 9 of 15 ( Start time: 12:35:13 AM !otal Mar"s: 1 1f 2 sto'"s move in t%e same dire'tion to-et%er t%en $%at $ill (e t%e 'orrelation 'oeffi'ient0 Sele't 'orre't option: 0 1)0 61)0 1)5 Question # 10 of 15 ( Start time: 12:35:38 AM !otal Mar"s: 1 !otal portfolio ris" is ________) Sele't 'orre't option: +,ual to s#stemati' ris" plus non6diversifia(le ris" +,ual to avoida(le ris" plus diversifia(le ris" +,ual to s#stemati' ris" plus unavoida(le ris" +,ual to s#stemati' ris" plus diversifia(le ris" Question # 11 of 15 ( Start time: 12:3;:02 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is related to t%e use *o$er finan'ial levera-e0 Sele't 'orre't option: >i2ed 'osts Caria(le 'osts Fe(t finan'in- Common e,uit# finan'inQuestion # 12 of 15 ( Start time: 12:3;:28 AM !otal Mar"s: 1 !%e $ei-%ted avera-e of possi(le returns/ $it% t%e $ei-%ts (ein- t%e pro(a(ilities of Composed & Solved

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o''urren'e is referred to as ________) Sele't 'orre't option: 9ro(a(ilit# distri(ution +2pe'ted return Standard deviation Coeffi'ient of variation Question # 13 of 15 ( Start time: 12:3;:5; AM !otal Mar"s: 1 !%e value of dire't 'laim se'urit# is derived from $%i'% of t%e follo$in-0 Sele't 'orre't option: >undamental anal#sis :nderl#in- real asset Suppl# and demand of se'urities in t%e mar"et All of t%e -iven options Question # 14 of 15 ( Start time: 12:35:22 AM !otal Mar"s: 1 .%at $ould #ou e2pe't to %appen to t%e pri'e of a s%are of sto'" on t%e da# it -oes e26dividend0 Sele't 'orre't option: !%e pri'e s%ould in'rease (# t%e amount of t%e dividend !%e pri'e s%ould de'rease (# t%e amount of t%e dividend !%e pri'e s%ould de'rease (# one6%alf t%e amount of t%e dividend !%e pri'e s%ould remain 'onstant Question # 15 of 15 ( Start time: 12:38:05 AM !otal Mar"s: 1 .%i'% of t%e follo$in$ould e2press t%e ne-ative net $ort% of a firm0 Sele't 'orre't option: +2perien'in- a (usiness failure 1n le-al (an"rupt'# +2perien'in- te'%ni'al insolven'# +2perien'ina''ountin- insolven'# Question # 1 of 15 ( Start time: 12:43:28 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! t%e t#pe of I#(rid or-aniJations0 Sele't 'orre't option: S6!#pe Corporation Composed & Solved

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*imited *ia(ilit# 9artners%ip Sole 9roprietors%ip 9rofessional Corporation Question # 2 of 15 ( Start time: 12:44:1; AM !otal Mar"s: 1 .%i'% of t%e follo$in- 'osts $ould (e 'onsidered a fi2ed 'ost0 Sele't 'orre't option: 8a$ materials Fepre'iation ?ad6 de(t losses 9rodu'tion la(or Question # 3 of 15 ( Start time: 12:44:39 AM !otal Mar"s: 1 .%at is a le-al a-reement/ also 'alled t%e deed of trust/ (et$een t%e 'orporation issuin- (onds and t%e (ond%olders t%at esta(lis% t%e terms of t%e (ond issue0 Sele't 'orre't option: 1ndenture Fe(enture ?ond ?ond trustee Question # 4 of 15 ( Start time: 12:45:03 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is related to t%e use *o$er finan'ial levera-e0 Sele't 'orre't option: >i2ed 'osts Caria(le 'osts Fe(t finan'in- Common e,uit# finan'inQuestion # 5 of 15 ( Start time: 12:45:30 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is similar (et$een 8eturn on investment and 9a#(a'" period te'%ni,ues of Capital (ud-etin-0 Sele't 'orre't option: 1nvolvement of interest rate $%ile ma"in- 'al'ulations Fo not a''ount for time value of mone# !ri'"# and 'ompli'ated met%ods All of t%e -iven options Composed & Solved

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Question # ; of 15 ( Start time: 12:45:59 AM !otal Mar"s: 1 .%i'% of t%e follo$instatements re-ardin- 'ovarian'e is 'orre't0 Sele't 'orre't option: Covarian'e al$a#s lies in t%e ran-e 61 to D1 Covarian'e/ (e'ause it involves a s,uared value/ must al$a#s (e a positive num(er (or Jero *o$ 'ovarian'es amon- returns for different se'urities leads to %i-% portfolio ris" Covarian'es 'an ta"e on positive/ ne-ative/ or Jero values Question # 5 of 15 ( Start time: 12:4;:2; AM !otal Mar"s: 1 Io$ dividend #ield on a sto'" is similar to t%e 'urrent #ield on a (ond0 Sele't 'orre't option: ?ot% represent %o$ mu'% ea'% se'urit#Hs pri'e $ill in'rease in a #ear ?ot% represent t%e se'urit#Hs annual in'ome divided (# its pri'e ?ot% are an a''urate representation of t%e total annual return an investor 'an e2pe't to earn (# o$nin- t%e se'urit# ?ot% are ,uarterl# #ields t%at must (e annualiJed Question # 8 of 15 ( Start time: 12:45:14 AM !otal Mar"s: 1 1f 2 sto'"s move in t%e same dire'tion to-et%er t%en $%at $ill (e t%e 'orrelation 'oeffi'ient0 Sele't 'orre't option: 0 1)0 61)0 1)5 Question # 9 of 15 ( Start time: 12:45:38 AM !otal Mar"s: 1 .%i'% of t%e follo$in-s e2pressed t%e proposition t%at t%e 'ost of e,uit# is a positive linear fun'tion of 'apital stru'ture0 Sele't 'orre't option: !%e Capital Asset 9ri'in- Model M&M 9roposition 1 M&M 9roposition 11 !%e *a$ of @ne 9ri'e Composed & Solved

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Question # 10 of 15 ( Start time: 12:49:05 AM !otal Mar"s: 1 _______ means e2pandint%e num(er of investments $%i'% 'over different "inds of sto'"s) Sele't 'orre't option: Fiversifi'ation Standard deviation Carian'e Covarian'e Question # 11 of 15 ( Start time: 12:49:41 AM !otal Mar"s: 1 An impli'it 'ost of addinde(t to t%e 'apital stru'ture is t%at it: Sele't 'orre't option: Adds interest e2pense to t%e operatin- statement 1n'reases t%e re,uired return on e,uit# 8edu'es t%e e2pe'ted return on assets Fe'reases t%e firmGs (eta Question # 12 of 15 ( Start time: 12:50:15 AM !otal Mar"s: 1 1n t%e dividend dis'ount model/ _____ $%i'% of t%e follo$in- are not in'orporated into t%e dis'ount rate0 Sele't 'orre't option: 8eal ris"6free rate 8is" premium for sto'"s 8eturn on assets +2pe'ted inflation rate Question # 13 of 15 ( Start time: 12:50:41 AM !otal Mar"s: 1 .%ere t%ere is sin-le period 'apital rationin-/ $%at is t%e most sensi(le $a# of ma"in- investment de'isions0 Sele't 'orre't option: C%oose all pro=e'ts $it% a positive 79C Kroup pro=e'ts to-et%er to allo'ate t%e funds availa(le and sele't t%e -roup of pro=e'ts $it% t%e %i-%est 79C C%oose t%e pro=e't $it% t%e %i-%est 79C Cal'ulate 188 and sele't t%e pro=e'ts $it% t%e %i-%est 188s Composed & Solved

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Question # 14 of 15 ( Start time: 12:51:15 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is not a re'o-niJed approa'% for determinin- t%e 'ost of e,uit#0 Sele't 'orre't option: Fividend dis'ount model approa'% ?efore6ta2 'ost of preferred sto'" plus ris" premium approa'% Capital6asset pri'in- model approa'% ?efore6ta2 'ost of de(t plus ris" premium approa'% Question # 15 of 15 ( Start time: 12:52:03 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e '%ara'teristi' of a $ell diversified portfolio0 Sele't 'orre't option: 1ts mar"et ris" is ne-li-i(le 1ts uns#stemati' ris" is ne-li-i(le 1ts s#stemati' ris" is ne-li-i(le All of t%e -iven options Question # 1 of 15 ( Start time: 12:55:10 AM !otal Mar"s: 1 .%i'% of t%e follo$in- $ould (e 'onsidered a 'as%6flo$ item from an Loperatin-L a'tivit#0 Sele't 'orre't option: Cas% outflo$ to t%e -overnment for ta2es Cas% outflo$ to s%are%olders as dividends Cas% inflo$ to t%e firm from sellin- ne$ 'ommon e,uit# s%ares Cas% outflo$ to pur'%ase (onds issued (# anot%er 'ompan# Question # 2 of 15 ( Start time: 12:55:39 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is an e2ample of restru'turin- t%e firm0 Sele't 'orre't option: Fividends are in'reased from 8s)1 to 8s)2 per s%are A ne$ investment in'reases t%e firmGs (usiness ris" 7e$ e,uit# is issued and t%e pro'eeds repa# de(t A ne$ ?oard of Fire'tors is ele'ted to t%e firm Question # 3 of 15 ( Start time: 12:5;:20 AM !otal Mar"s: 1 !%e 8?S pa#s 5);0M/ 'ompounded dail# ((ased on 3;0 da#s / on a 96mont% 'ertifi'ate of deposit/ if #ou deposit 8s)20/ 000 #ou $ould e2pe't to earn around ________ in interest) Sele't 'orre't option: Composed & Solved

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8s)840 8s)858 8s)1/032 8s)1/121 Question # 4 of 15 ( Start time: 12:5;:54 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is related to t%e use *o$er finan'ial levera-e0 Sele't 'orre't option: >i2ed 'osts Caria(le 'osts Fe(t finan'in- Common e,uit# finan'inQuestion # 5 of 15 ( Start time: 12:55:23 AM !otal Mar"s: 1 :pon $%i'% of t%e follo$in- a firmGs de-ree of operatin- levera-e (F@* depends primaril#0 Sele't 'orre't option: Sales varia(ilit# *evel of fi2ed operatin- 'osts Closeness to its operatin- (rea"6even point Fe(t6to6 e,uit# ratio Question # ; of 15 ( Start time: 12:55:53 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e 'as% re,uired durin- a spe'ifi' period to meet interest e2penses and prin'ipal pa#ments0 Sele't 'orre't option: Fe(t 'apa'it# Fe(t6servi'e (urden Ade,ua'# 'apa'it# >i2ed6'%ar-e (urden Question # 5 of 15 ( Start time: 12:58:21 AM !otal Mar"s: 1 ______ are also "no$n as Spontaneous >inan'in-) Sele't 'orre't option: Current lia(ilities Current assets Composed & Solved

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>i2ed assets *on-6term lia(ilities Question # 8 of 15 ( Start time: 12:58:48 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! t%e t#pe of I#(rid or-aniJations0 Sele't 'orre't option: S6!#pe Corporation *imited *ia(ilit# 9artners%ip Sole 9roprietors%ip 9rofessional Corporation Question # 9 of 15 ( Start time: 12:59:12 AM !otal Mar"s: 1 .%i'% of t%e follo$in- fa'tors mi-%t affe't sto'" returns0 Sele't 'orre't option: ?usiness '#'le 1nterest rate flu'tuations 1nflation rates All of t%e a(ove Question # 10 of 15 ( Start time: 12:59:35 AM !otal Mar"s: 1 .%i'% of t%e follo$in- isAare t%e '%ara'teristi'(s of 9erpetuit#0 Sele't 'orre't option: 1t is an annuit# 1t %as no definite end 1t is a 'onstant stream of identi'al 'as% flo$s All of t%e -iven options Question # 11 of 15 ( Start time: 01:00:09 AM !otal Mar"s: 1 A 'apital (ud-etinte'%ni,ue t%rou-% $%i'% dis'ount rate e,uates t%e present value of t%e future net 'as% flo$s from an investment pro=e't $it% t%e pro=e'tHs initial 'as% outflo$ is "no$n as: Sele't 'orre't option: 9a#(a'" period 1nternal rate of return 7et present value 9rofita(ilit# inde2 Composed & Solved

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Question # 12 of 15 ( Start time: 01:00:45 AM !otal Mar"s: 1 C%oose amon- t%e follo$in-s/ t%e 'orre't statement re-ardin- ever# =ournal entr#) Sele't 'orre't option: Sum of Fe(its N Sum of Credits Sum of Fe(its OSum of Credits Sum of Fe(its P Sum of Credits 7one of t%e -iven options Question # 13 of 15 ( Start time: 01:01:11 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! a 'as% outflo$ for t%e firm0 Sele't 'orre't option: Fepre'iation Fividends 1nterest !a2es Question # 14 of 15 ( Start time: 01:01:42 AM !otal Mar"s: 1 .%i'% of t%e follo$informula relates (eta of t%e sto'" to t%e standard deviation0 Sele't 'orre't option: Covarian'e of sto'" $it% mar"et Q varian'e of t%e mar"et Covarian'e of sto'" $it% mar"et A varian'e of t%e mar"et Carian'e of t%e mar"et A Covarian'e of sto'" $it% mar"et Slope of t%e re-ression line Question # 15 of 15 ( Start time: 01:02:44 AM !otal Mar"s: 1 .%i'% of t%e follo$in- isAare t%e 'omponent(s of $or"in- 'apital mana-ement0 Sele't 'orre't option: Current assets >i2ed assets >i2ed assets and lon-6term lia(ilities Current assets and 'urrent lia(ilities Question # 1 of 15 ( Start time: 01:08:11 AM !otal Mar"s: 1 .%ere t%ere is sin-le period 'apital rationin-/ $%at is t%e most sensi(le $a# of ma"in- investment de'isions0 Sele't 'orre't option: Composed & Solved

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C%oose all pro=e'ts $it% a positive 79C Kroup pro=e'ts to-et%er to allo'ate t%e funds availa(le and sele't t%e -roup of pro=e'ts $it% t%e %i-%est 79C C%oose t%e pro=e't $it% t%e %i-%est 79C Cal'ulate 188 and sele't t%e pro=e'ts $it% t%e %i-%est 188s Question # 2 of 15 ( Start time: 01:08:30 AM !otal Mar"s: 1 .%i'% of t%e follo$in- affe'ts pri'e of t%e (ond0 Sele't 'orre't option: Mar"et interest rate 8e,uired rate of return 1nterest rate ris" All of t%e -iven options Question # 3 of 15 ( Start time: 01:09:0; AM !otal Mar"s: 1 .%# a sin-le/ overall 'ost of 'apital is often used to evaluate pro=e'ts0 Sele't 'orre't option: 1t avoids t%e pro(lem of 'omputin- t%e re,uired rate of return for ea'% investment 9roposal 1t is t%e onl# $a# to measure a firmGs re,uired return 1t a'"no$led-es t%at most ne$ investment pro=e'ts %ave a(out t%e same de-ree of ris" 1t a'"no$led-es t%at most ne$ investment pro=e'ts offer a(out t%e same e2pe'ted return Question # 4 of 15 ( Start time: 01:10:30 AM !otal Mar"s: 1 Se'urit# mar"et line -ives t%e relations%ip (et$een _____ and _______) Sele't 'orre't option: Mar"et ris" and t%e re,uired return S#stemati' ris" and t%e re,uired return 7on6diversified ris" and t%e re,uired return All of t%e -iven options Question # 5 of 15 ( Start time: 01:11:00 AM !otal Mar"s: 1 A(ove t%e (rea"even +?1!/ in'reased finan'ial levera-e $ill ________ +9S/ all else t%e same) Assume t%ere are no ta2es Sele't 'orre't option: 1n'rease Fe'rease Composed & Solved

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+it%er in'rease or de'rease 7one of t%e -iven options Question # ; of 15 ( Start time: 01:11:40 AM !otal Mar"s: 1 A 'ompan# $%ose sto'" is sellin- at a 9A+ ratio -reater t%an t%e 9A+ ratio of a mar"et inde2 most li"el# %as _______) Sele't 'orre't option: An anti'ipated earnin-s -ro$t% rate $%i'% is less t%an t%at of t%e avera-e firm A dividend #ield $%i'% is less t%an t%at of t%e avera-e firm *ess predi'ta(le earnin-s -ro$t% t%an t%at of t%e avera-e firm Kreater '#'li'alit# of earnin-s -ro$t% t%an t%at of t%e avera-e firm Question # 5 of 15 ( Start time: 01:12:59 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e 'as% re,uired durin- a spe'ifi' period to meet interest e2penses and prin'ipal pa#ments0 Sele't 'orre't option: Fe(t 'apa'it# Fe(t6servi'e (urden Ade,ua'# 'apa'it# >i2ed6'%ar-e (urden Question # 8 of 15 ( Start time: 01:13:54 AM !otal Mar"s: 1 ______ are also "no$n as Spontaneous >inan'in-) Sele't 'orre't option: Current lia(ilities Current assets >i2ed assets *on-6term lia(ilities Question # 9 of 15 ( Start time: 01:14:29 AM !otal Mar"s: 1 .%en ta2es are 'onsidered/ t%e value of a levered firm e,uals t%e value of t%e& _____) Sele't 'orre't option: :nlevered firm :nlevered firm plus t%e value of t%e de(t :nlevered firm plus t%e present value of t%e ta2 s%ield :nlevered firm plus t%e value of t%e de(t plus t%e value of t%e ta2 s%ield Composed & Solved

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Question # 10 of 15 ( Start time: 01:14:58 AM !otal Mar"s: 1 !%e ________ t%e 'oeffi'ient of variation ______ t%e relative ris" of t%e investment) Sele't 'orre't option: *ar-er< *ar-er *ar-er< Smaller Smaller< *ar-er Smaller< Smaller Question # 11 of 15 ( Start time: 01:15:20 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! a 'as% outflo$ for t%e firm0 Sele't 'orre't option: Fepre'iation Fividends 1nterest !a2es Question # 12 of 15 ( Start time: 01:15:39 AM !otal Mar"s: 1 .%i'% of t%e follo$in- 'osts $ould (e 'onsidered a fi2ed 'ost0 Sele't 'orre't option: 8a$ materials Fepre'iation ?ad6 de(t losses 9rodu'tion la(or Question # 13 of 15 ( Start time: 01:1;:04 AM !otal Mar"s: 1 Consider t$o (onds/ A and ?) ?ot% (onds presentl# are sellin- at t%eir par value of 8s) 1/000) +a'% pa#s interest of 8s) 120 annuall#) ?ond A $ill mature in 5 #ears $%ile (ond ? $ill mature in ; #ears) 1f t%e #ields to maturit# on t%e t$o (onds '%an-e from 12M to 10M/ __________) Sele't 'orre't option: ?ot% (onds $ill in'rease in value/ (ut (ond A $ill in'rease more t%an (ond ? ?ot% (onds $ill in'rease in value/ (ut (ond ? $ill in'rease more t%an (ond A ?ot% (onds $ill de'rease in value/ (ut (ond A $ill de'rease more t%an (ond ? ?ot% (onds $ill de'rease in value/ (ut (ond ? $ill de'rease more t%an (ond A Question # 14 of 15 ( Start time: 01:1;:51 AM !otal Mar"s: 1 Coeffi'ient of variation is 7@! t%e measure of ________) Composed & Solved

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Sele't 'orre't option: 8is" 9ro(a(ilit# 8elative dispersion 8is" per unit of e2pe'ted return Question # 15 of 15 ( Start time: 01:18:02 AM !otal Mar"s: 1 !%e value of a (ond is dire'tl# derived from $%i'% of t%e follo$in-0 Sele't 'orre't option: Cas% flo$s Coupon re'eipts 9ar re'over# at maturit# All of t%e -iven options Question # 1 of 15 ( Start time: 01:20:44 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is as +?1!0 Sele't 'orre't option: >unds provided (# operations +arnin-s (efore ta2es 7et in'ome @peratin- profit Question # 2 of 15 ( Start time: 01:21:10 AM !otal Mar"s: 1 .%at is t%e differen'e (et$een e'onomi' profit and a''ountin- profit0 Sele't 'orre't option: +'onomi' profit in'ludes a '%ar-e for all providers of 'apital $%ile a''ountin- profit in'ludes onl# a '%ar-e for de(t +'onomi' profit 'overs t%e profit over t%e life of t%e firm/ $%ile a''ountin- profit onl# 'overs t%e most re'ent a''ountin- period A''ountin- profit is (ased on 'urrent a''epted a''ountin- rules $%ile e'onomi' profit is (ased on 'as% flo$s All of t%e -iven options are 'orre't Question # 3 of 15 ( Start time: 01:21:52 AM !otal Mar"s: 1 !%e overall ($ei-%ted avera-e 'ost of 'apital is 'omposed of $ei-%ted avera-es of $%i'% of t%e follo$in-0 Sele't 'orre't option: Composed & Solved

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!%e 'ost of 'ommon e,uit# and t%e 'ost of de(t !%e 'ost of 'ommon e,uit# and t%e 'ost of preferred sto'" !%e 'ost of preferred sto'" and t%e 'ost of de(t !%e 'ost of 'ommon e,uit#/ t%e 'ost of preferred sto'"/ and t%e 'ost of de(t Question # 4 of 15 ( Start time: 01:22:32 AM !otal Mar"s: 1 .%i'% of t%e follo$in- refers to (rin-in- t%e future 'as% flo$ to t%e present time0 Sele't 'orre't option: 7et present value Fis'ountin- @pportunit# 'ost 1nternal rate of return Question # 5 of 15 ( Start time: 01:23:0; AM !otal Mar"s: 1 .%at is t%e traditional approa'% to$ards t%e valuation of a 'ompan#0 Sele't 'orre't option: !%e 'ost of 'apital is independent of t%e 'apital stru'ture of t%e firm !%e firm maintains 'onstant ris" re-ardless of t%e t#pe of finan'in- emplo#ed !%ere e2ists no optimal 'apital stru'ture !%at mana-ement 'an in'rease t%e total value of t%e firm t%rou-% t%e =udi'ious use of finan'ial levera-e Question # ; of 15 ( Start time: 01:24:32 AM !otal Mar"s: 1 Se'urit# mar"et line -ives t%e relations%ip (et$een _____ and _______) Sele't 'orre't option: Mar"et ris" and t%e re,uired return S#stemati' ris" and t%e re,uired return 7on6diversified ris" and t%e re,uired return All of t%e -iven options Question # 5 of 15 ( Start time: 01:25:02 AM !otal Mar"s: 1 7ominal 1nterest 8ate is also "no$n as: Sele't 'orre't option: +ffe'tive interest 8ate Annual per'enta-e rate Composed & Solved

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9eriodi' interest rate 8e,uired interest rate Question # 8 of 15 ( Start time: 01:25:39 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is related to t%e use *o$er finan'ial levera-e0 Sele't 'orre't option: >i2ed 'osts Caria(le 'osts Fe(t finan'in- Common e,uit# finan'inQuestion # 9 of 15 ( Start time: 01:2;:10 AM !otal Mar"s: 1 .%at is t%e e2pe'ted return of a Jero6(eta se'urit#0 Sele't 'orre't option: !%e ris"6free rate Rero rate of return A ne-ative rate of return !%e mar"et rate of return Question # 10 of 15 ( Start time: 01:25:19 AM !otal Mar"s: 1 .%at is #ield to maturit# on a (ond0 Sele't 'orre't option: ?elo$ t%e 'oupon rate $%en t%e (ond sells at a dis'ount/ and e,ual to t%e 'oupon rate $%en t%e (ond sells at a premium !%e dis'ount rate t%at $ill set t%e present value of t%e pa#ments e,ual to t%e (ond pri'e ?ased on t%e assumption t%at an# pa#ments re'eived are reinvested at t%e 'oupon rate 7one of t%e a(ove Question # 11 of 15 ( Start time: 01:25:48 AM !otal Mar"s: 1 .%at is t%e present value of 8s)8/000 to (e paid at t%e end of t%ree #ears if interest rate is 11M0 Sele't 'orre't option: 8s);/015 8s)4/852 8s);/525 8s)1/842 Composed & Solved

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Question # 12 of 15 ( Start time: 01:28:08 AM !otal Mar"s: 1 ______ is paid (# 'ompanies $it% lo$er -rade (onds li"e CC or C ratin-s) Sele't 'orre't option: Fefault ris" premium Soverei-n 8is" 9remium Mar"et ris" premium Maturit# ris" premium Question # 13 of 15 ( Start time: 01:28:43 AM !otal Mar"s: 1 1f $e $ere to in'rease A?C 'ompan# 'ost of e,uit# assumption/ $%at $ould $e e2pe't to %appen to t%e present value of all future 'as% flo$s0 Sele't 'orre't option: An in'rease A de'rease 7o '%an-e 1n'omplete information Question # 14 of 15 ( Start time: 01:29:35 AM !otal Mar"s: 1 1n t%e dividend dis'ount model/ _____ $%i'% of t%e follo$in- are not in'orporated into t%e dis'ount rate0 Sele't 'orre't option: 8eal ris"6free rate 8is" premium for sto'"s 8eturn on assets +2pe'ted inflation rate Question # 15 of 15 ( Start time: 01:29:53 AM !otal Mar"s: 1 .%at t#pe of lon-6term finan'in- most li"el# %as t%e follo$in- features: 1 it %as an infinite life/ 2 it pa#s dividends/ and 3 its 'as% flo$s are e2pe'ted to (e a 'onstant annuit# stream0 Sele't 'orre't option: *on-6term de(t 9referred sto'" Common sto'" 7one of t%e -iven options Composed & Solved

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Question # 1 of 15 ( Start time: 01:33:00 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is related to t%e use *o$er finan'ial levera-e0 Sele't 'orre't option: >i2ed 'osts Caria(le 'osts Fe(t finan'in- Common e,uit# finan'inQuestion # 2 of 15 ( Start time: 01:33:23 AM !otal Mar"s: 1 A 56#ear ordinar# annuit# %as a present value of 8s)1/000) 1f t%e interest rate is 8 per'ent/ t%e amount of ea'% annuit# pa#ment is 'losest to $%i'% of t%e follo$in-0 Sele't 'orre't option: 8s) 250)44 8s) 231)91 8s)181);2 8s)184)08 Question # 3 of 15 ( Start time: 01:33:49 AM !otal Mar"s: 1 A set of possi(le values t%at a random varia(le 'an assume and t%eir asso'iated pro(a(ilities of o''urren'e are referred to as ________) Sele't 'orre't option: 9ro(a(ilit# distri(ution !%e e2pe'ted return !%e standard deviation Coeffi'ient of variation Question # 4 of 15 ( Start time: 01:34:15 AM !otal Mar"s: 1 >or most firms/ 9A+ ratios and ris"&______) Sele't 'orre't option: .ill (e dire'tl# related .ill %ave an inverse relations%ip .ill (e unrelated 7one of t%e a(ove) Question # 5 of 15 ( Start time: 01:34:43 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e e2pe'ted 'as% dividend t%at is normall# paid to s%are%olders0 Composed & Solved

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Sele't 'orre't option: Sto'" split Sto'" dividend +2tra dividend 8e-ular dividend Question # ; of 15 ( Start time: 01:35:25 AM !otal Mar"s: 1 1n 'al'ulatin- t%e 'osts of t%e individual 'omponents of a firmGs finan'in-/ t%e 'orporate ta2 rate is important to $%i'% of t%e follo$in- 'omponent 'ost formulas0 Sele't 'orre't option: Common sto'" Fe(t 9referred sto'" 7one of t%e a(ove Question # 5 of 15 ( Start time: 01:35:55 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! an e2ample of a finan'ial intermediar#0 Sele't 'orre't option: .is'onsin S&*/ a savin-s and loan asso'iation Stron- Capital Appre'iation/ a mutual fund Mi'rosoft Corporation/ a soft$are firm Colle-e Credit/ a 'redit union Question # 8 of 15 ( Start time: 01:3;:18 AM !otal Mar"s: 1 .%i'% of t%e follo$instipulate a relations%ip (et$een e2pe'ted return and ris"0 Sele't 'orre't option: A9! stipulates CA9M stipulates ?ot% CA9M and A9! stipulate 7eit%er CA9M nor A9! stipulate Question # 9 of 15 ( Start time: 01:3;:35 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is related to t%e use *o$er finan'ial levera-e0 Sele't 'orre't option: >i2ed 'osts Caria(le 'osts Composed & Solved

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Fe(t finan'in- Common e,uit# finan'inQuestion # 10 of 15 ( Start time: 01:3;:59 AM !otal Mar"s: 1 Io$ LS%are%older $ealt%L is represented in a firm0 Sele't 'orre't option: !%e num(er of people emplo#ed in t%e firm !%e (oo" value of t%e firmGs assets less t%e (oo" value of its lia(ilities !%e mar"et pri'e per s%are of t%e firmGs 'ommon sto'" !%e amount of salar# paid to its emplo#ees Question # 11 of 15 ( Start time: 01:35:30 AM !otal Mar"s: 1 !%e sto'" in #our portfolio $as sellin- for 8s)40 per s%are #esterda#/ (ut %as toda# de'lared a t%ree for t$o split) .%i'% of t%e follo$in- statements seems to (e true0 Sele't 'orre't option: !%ere $ill (e t$o6t%irds as man# s%ares outstandin-/ and t%e# $ill sell for 8s);0)00 ea'% !%ere $ill (e four times as man# s%ares outstandin-/ and t%e# $ill sell for 8s)1;0)00 ea'% !%ere $ill (e 50 per'ent more s%ares outstandin- and t%e# $ill sell for 8s)2;);5 ea'% !%ere $ill (e one6and6one6%alf times as man# s%ares outstandin-/ and t%e# $ill sell for 8s);0)00 ea'% Question # 12 of 15 ( Start time: 01:38:15 AM !otal Mar"s: 1 .%i'% of t%e follo$in- refers to (rin-in- t%e future 'as% flo$ to t%e present time0 Sele't 'orre't option: 7et present value Fis'ountin- @pportunit# 'ost 1nternal rate of return Question # 13 of 15 ( Start time: 01:38:41 AM !otal Mar"s: 1 >or $%i'% of t%e follo$in'osts is it -enerall# ne'essar# to appl# a ta2 ad=ustment to a #ield measure0 Sele't 'orre't option: Cost of de(t Cost of preferred sto'" Composed & Solved

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Cost of 'ommon e,uit# Cost of retained earnin-s Question # 14 of 15 ( Start time: 01:39:15 AM !otal Mar"s: 1 Io$ t%e (eta of t%e sto'" 'ould (e 'al'ulated0 Sele't 'orre't option: ?# monitorin- pri'e of t%e sto'" ?# monitorinrate of return of t%e sto'" ?# 'omparin- t%e '%an-es in t%e sto'" mar"et pri'e to t%e '%an-es in t%e sto'" mar"et inde2 All of t%e -iven options Question # 15 of 15 ( Start time: 01:39:42 AM !otal Mar"s: 1 .%i'% of t%e follo$in- refers to t%e 'ost of ta"in- up one option $%ile sa'rifi'in- t%e ot%er0 Sele't 'orre't option: @pportunit# 'ost @peratin- 'ost Sun" 'ost >loatation 'ost Question # 1 of 15 ( Start time: 01:41:55 AM !otal Mar"s: 1 :pon $%i'% of t%e follo$in- a firmGs de-ree of operatin- levera-e (F@* depends primaril#0 Sele't 'orre't option: Sales varia(ilit# *evel of fi2ed operatin- 'osts Closeness to its operatin- (rea"6even point Fe(t6to6 e,uit# ratio Question # 2 of 15 ( Start time: 01:42:44 AM !otal Mar"s: 1 .%at $ould #ou e2pe't to %appen to t%e pri'e of a s%are of sto'" on t%e da# it -oes e26dividend0 Sele't 'orre't option: !%e pri'e s%ould in'rease (# t%e amount of t%e dividend !%e pri'e s%ould de'rease (# t%e amount of t%e dividend !%e pri'e s%ould de'rease (# one6%alf t%e amount of t%e dividend Composed & Solved

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!%e pri'e s%ould remain 'onstant Question # 3 of 15 ( Start time: 01:43:30 AM !otal Mar"s: 1 !%e overall ($ei-%ted avera-e 'ost of 'apital is 'omposed of $ei-%ted avera-es of $%i'% of t%e follo$in-0 Sele't 'orre't option: !%e 'ost of 'ommon e,uit# and t%e 'ost of de(t !%e 'ost of 'ommon e,uit# and t%e 'ost of preferred sto'" !%e 'ost of preferred sto'" and t%e 'ost of de(t !%e 'ost of 'ommon e,uit#/ t%e 'ost of preferred sto'"/ and t%e 'ost of de(t Question # 4 of 15 ( Start time: 01:44:11 AM !otal Mar"s: 1 .%i'% of t%e follo$instipulate a relations%ip (et$een e2pe'ted return and ris"0 Sele't 'orre't option: A9! stipulates CA9M stipulates ?ot% CA9M and A9! stipulate 7eit%er CA9M nor A9! stipulate Question # 5 of 15 ( Start time: 01:44:3; AM !otal Mar"s: 1 .%i'% of t%e follo$informulas represents a 'orre't 'al'ulation of t%e de-ree of operatin- levera-e0 Sele't 'orre't option: (Q 6 Q?+ AQ (+?1! A (+?1! 6 >C BQ(96C D >CE ABQ(96C E Q(96C A BQ(96C 6 >CE Question # ; of 15 ( Start time: 01:45:03 AM !otal Mar"s: 1 _______ means e2pandin- t%e num(er of investments $%i'% 'over different "inds of sto'"s) Sele't 'orre't option: Fiversifi'ation Standard deviation Carian'e Covarian'e Composed & Solved

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Question # 5 of 15 ( Start time: 01:45:28 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is related to t%e use of %i-%er operatin- levera-e0 Sele't 'orre't option: >i2ed 'osts Caria(le 'osts Fe(t finan'in- Common e,uit# finan'in- Question # 8 of 15 ( Start time: 01:4;:01 AM !otal Mar"s: 1 7ominal 1nterest 8ate is also "no$n as: Sele't 'orre't option: +ffe'tive interest 8ate Annual per'enta-e rate 9eriodi' interest rate 8e,uired interest rate Question # 9 of 15 ( Start time: 01:4;:25 AM !otal Mar"s: 1 .%i'% statement is 7@! true re-ardin- t%e mar"et portfolio0 Sele't 'orre't option: 1t in'ludes all pu(li'l# traded finan'ial assets 1t is t%e tan-en'# point (et$een t%e 'apital mar"et line and t%e indifferen'e 'urve All se'urities in t%e mar"et portfolio are %eld in proportion to t%eir mar"et values 1t lies on t%e effi'ient frontier Question # 10 of 15 ( Start time: 01:45:18 AM !otal Mar"s: 1 .%o determine t%e mar"et pri'e of a s%are of 'ommon sto'"0 Sele't 'orre't option: !%e (oard of dire'tors of t%e firm !%e sto'" e2'%an-e on $%i'% t%e sto'" is listed !%e president of t%e 'ompan# 1ndividuals (u#in- and sellin- t%e sto'" Question # 11 of 15 ( Start time: 01:45:53 AM !otal Mar"s: 1 Companies and individuals runnin- different t#pes of (usinesses %ave to ma"e t%e '%oi'es of t%e asset a''ordin- to $%i'% of t%e follo$in-0 Sele't 'orre't option: Composed & Solved

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*ife span of t%e pro=e't Cost of t%e 'apital 8eturn on asset 7one of t%e -iven options Question # 12 of 15 ( Start time: 01:48:19 AM !otal Mar"s: 1 .%en t%e Jero 'oupon (ond approa'%es to its maturit#/ t%e mar"et value of t%e (ond approa'%es to $%i'% of t%e follo$in-0 Sele't 'orre't option: 1ntrinsi' value ?oo" value 9ar value Iistori' 'ost Question # 13 of 15 ( Start time: 01:48:54 AM !otal Mar"s: 1 .%i'% of t%e follo$in- $ould e2press t%e ne-ative net $ort% of a firm0 Sele't 'orre't option: +2perien'in- a (usiness failure 1n le-al (an"rupt'# +2perien'in- te'%ni'al insolven'# +2perien'in- a''ountin- insolven'# Question # 14 of 15 ( Start time: 01:49:35 AM !otal Mar"s: 1 1f sto'" is a part of totall# diversified portfolio t%en its 'ompan# ris" must (e e,ual to: Sele't 'orre't option: 0 0)5 1 61 Question # 15 of 15 ( Start time: 01:50:30 AM !otal Mar"s: 1 C%oose amon- t%e follo$in-s/ t%e 'orre't statement re-ardin- ever# =ournal entr#) Sele't 'orre't option: Sum of Fe(its N Sum of Credits Sum of Fe(its OSum of Credits Sum of Fe(its P Sum of Credits 7one of t%e -iven options Composed & Solved

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Question # 1 of 15 ( Start time: 01:51:32 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e 'as% re,uired durin- a spe'ifi' period to meet interest e2penses and prin'ipal pa#ments0 Sele't 'orre't option: Fe(t 'apa'it# Fe(t6servi'e (urden Ade,ua'# 'apa'it# >i2ed6'%ar-e (urden Question # 2 of 15 ( Start time: 01:51:59 AM !otal Mar"s: 1 7ominal 1nterest 8ate is also "no$n as: Sele't 'orre't option: +ffe'tive interest 8ate Annual per'enta-e rate 9eriodi' interest rate 8e,uired interest rate Question # 3 of 15 ( Start time: 01:52:42 AM !otal Mar"s: 1 !%e sto'" in #our portfolio $as sellin- for 8s)40 per s%are #esterda#/ (ut %as toda# de'lared a t%ree for t$o split) .%i'% of t%e follo$in- statements seems to (e true0 Sele't 'orre't option: !%ere $ill (e t$o6t%irds as man# s%ares outstandin-/ and t%e# $ill sell for 8s);0)00 ea'% !%ere $ill (e four times as man# s%ares outstandin-/ and t%e# $ill sell for 8s)1;0)00 ea'% !%ere $ill (e 50 per'ent more s%ares outstandin- and t%e# $ill sell for 8s)2;);5 ea'% !%ere $ill (e one6and6one6%alf times as man# s%ares outstandin-/ and t%e# $ill sell for 8s);0)00 ea'% Question # 4 of 15 ( Start time: 01:53:4; AM !otal Mar"s: 1 .%at is differen'e (et$een s%ares and (onds0 Sele't 'orre't option: ?onds are representin- o$ners%ip $%ereas s%ares are not S%ares are representin- o$ners%ip $%ereas (onds are not S%ares and (onds (ot% represent e,uit# S%ares and (ond (ot% represent lia(ilities Question # 5 of 15 ( Start time: 01:55:15 AM !otal Mar"s: 1 Composed & Solved

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Se'urit# mar"et line -ives t%e relations%ip (et$een &&&&&&& and &&&&&&&&&) Sele't 'orre't option: Mar"et ris" and t%e re,uired return S#stemati' ris" and t%e re,uired return 7on6diversified ris" and t%e re,uired return All of t%e -iven options Question # ; of 15 ( Start time: 01:55:52 AM !otal Mar"s: 1 1f $e invest in man# se'urities $%i'% are &&&&&&&&to ea'% ot%er t%en it is possi(le to redu'e overall ris" for #our investment) Sele't 'orre't option: Compara(le Correlated Ii-%l# 'orrelated 7e-ativel# 'orrelated Question # 5 of 15 ( Start time: 01:58:38 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e -eneral assumption of 9er'ent of Sales >ore'astin-0 Sele't 'orre't option: Current Assets usuall# -ro$ in proportion to 8evenues Current Assets usuall# -ro$ in proportion to +2penses Current Assets usuall# -ro$ in proportion to *ia(ilities Current Assets usuall# -ro$ in proportion to Sales Question # 8 of 15 ( Start time: 01:59:22 AM !otal Mar"s: 1 .%i'% of t%e follo$in- isAare t%e 'omponent(s of $or"in- 'apital mana-ement0 Sele't 'orre't option: Current assets >i2ed assets >i2ed assets and lon-6term lia(ilities Current assets and 'urrent lia(ilities Question # 9 of 15 ( Start time: 01:59:52 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is not a re'o-niJed approa'% for determinin- t%e 'ost of e,uit#0 Sele't 'orre't option: Fividend dis'ount model approa'% Composed & Solved

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?efore6ta2 'ost of preferred sto'" plus ris" premium approa'% Capital6asset pri'in- model approa'% ?efore6ta2 'ost of de(t plus ris" premium approa'% Question # 10 of 15 ( Start time: 02:00:32 AM !otal Mar"s: 1 .%en 1nvestors $ant %i-% plo$(a'" ratios0 Sele't 'orre't option: .%enever 8@+ O " .%enever " O 8@+ @nl# $%en t%e# are in lo$ ta2 (ra'"ets .%enever (an" interest rates are %i-% Question # 11 of 15 ( Start time: 02:01:02 AM !otal Mar"s: 1 .%# a sin-le/ overall 'ost of 'apital is often used to evaluate pro=e'ts0 Sele't 'orre't option: 1t avoids t%e pro(lem of 'omputin- t%e re,uired rate of return for ea'% investment 9roposal 1t is t%e onl# $a# to measure a firmGs re,uired return 1t a'"no$led-es t%at most ne$ investment pro=e'ts %ave a(out t%e same de-ree of ris" 1t a'"no$led-es t%at most ne$ investment pro=e'ts offer a(out t%e same e2pe'ted return Question # 12 of 15 ( Start time: 02:01:58 AM !otal Mar"s: 1 !%e statement of 'as% flo$s reports a firmGs 'as% flo$s se-re-ated into $%i'% of t%e follo$in- 'ate-ori'al order0 Sele't 'orre't option: @peratin-/ investin-/ and finan'in1nvestin-/ operatin-/ and finan'in>inan'in-/ operatin- and investin>inan'in-/ investin-/ and operatinQuestion # 13 of 15 ( Start time: 02:02:28 AM !otal Mar"s: 1 1nvestors ma# (e $illin- to pa# a premium for sta(le dividends (e'ause of t%e informational 'ontent of &&&&&&&&&&/ t%e desire of investors for &&&&&&&&&&/ and 'ertain &&&&&&&&&&) Sele't 'orre't option: Composed & Solved

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1nstitutional 'onsiderations< dividends< 'urrent in'ome Fividends< 'urrent in'ome< institutional 'onsiderations Current in'ome< dividends< institutional 'onsiderations 1nstitutional 'onsiderations< 'urrent in'ome< dividends Question # 14 of 15 ( Start time: 02:03:21 AM !otal Mar"s: 1 .%i'% of t%e follo$in- statements is !8:+ re-ardin- 9ermanent A''ounts0 Sele't 'orre't option: A''ounts t%at are found on 1n'ome Statement A''ounts t%at are found on Statement of 8etained +arnin-s A''ounts t%at are found on ?alan'e S%eet All of t%e -iven options Question # 15 of 15 ( Start time: 02:03:58 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e per'enta-e of interest '%ar-ed at ea'% 'ompoundin- time0 Sele't 'orre't option: 7ominal interest 8ate +ffe'tive interest 8ate Annual per'enta-e rate 9eriodi' interest rate Question # 5 of 15 ( Start time: 02:05:00 AM !otal Mar"s: 1 !otal portfolio ris" is a 'om(ination of: Sele't 'orre't option: S#stemati' ris" plus non6diversifia(le ris" Avoida(le ris" plus diversifia(le ris" S#stemati' ris" plus unavoida(le ris" S#stemati' ris" plus diversifia(le ris" Question # 8 of 15 ( Start time: 02:05:32 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e 'as% re,uired durin- a spe'ifi' period to meet interest e2penses and prin'ipal pa#ments0 Sele't 'orre't option: Fe(t 'apa'it# Fe(t6servi'e (urden Composed & Solved

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Ade,ua'# 'apa'it# >i2ed6'%ar-e (urden Question # 9 of 15 ( Start time: 02:05:5; AM !otal Mar"s: 1 A 56#ear ordinar# annuit# %as a present value of 8s)1/000) 1f t%e interest rate is 8 per'ent/ t%e amount of ea'% annuit# pa#ment is 'losest to $%i'% of t%e follo$in-0 Sele't 'orre't option: 8s) 250)44 8s) 231)91 8s)181);2 8s)184)08 Question # 10 of 15 ( Start time: 02:08:1; AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! true re-ardin- t%e 'apital mar"et0 Sele't 'orre't option: .%ere lon-6term funds 'an (e raised Mone# is invested for periods lon-er t%an a #ear .%ere !>Cs and 71! are e2'%an-ed and traded .%ere overni-%t lendin- & (orro$in- ta"es pla'e Question # 11 of 15 ( Start time: 02:08:40 AM !otal Mar"s: 1 .%i'% of t%e follo$informula relates (eta of t%e sto'" to t%e standard deviation0 Sele't 'orre't option: Covarian'e of sto'" $it% mar"et Q varian'e of t%e mar"et Covarian'e of sto'" $it% mar"et A varian'e of t%e mar"et Carian'e of t%e mar"et A Covarian'e of sto'" $it% mar"et Slope of t%e re-ression line Question # 12 of 15 ( Start time: 02:08:55 AM !otal Mar"s: 1 .%i'% of t%e follo$ins%o$s A** possi(le 8is" S8eturn 'om(inations for All 'om(inations of t%e sto'"s in t%e portfolio6 $%et%er effi'ient or not) Sele't 'orre't option: 9ara'%ute -rap% Capital mar"et line Se'urit# mar"et line All of t%e -iven options Composed & Solved

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Question # 13 of 15 ( Start time: 02:09:28 AM !otal Mar"s: 1 >or most firms/ 9A+ ratios and ris"&______) Sele't 'orre't option: .ill (e dire'tl# related .ill %ave an inverse relations%ip .ill (e unrelated 7one of t%e a(ove) Question # 14 of 15 ( Start time: 02:09:48 AM !otal Mar"s: 1 .%at is t%e e2pe'ted return of a Jero6(eta se'urit#0 Sele't 'orre't option: !%e ris"6free rate Rero rate of return A ne-ative rate of return !%e mar"et rate of return Question # 15 of 15 ( Start time: 02:10:08 AM !otal Mar"s: 1 .%i'% of t%e follo$instatements (in -eneral is 'orre't0 Sele't 'orre't option: A lo$ re'eiva(les turnover is desira(le !%e lo$er t%e total de(t6to6e,uit# ratio/ t%e lo$er t%e finan'ial ris" for a firm An in'rease in net profit mar-in $it% no '%an-e in sales or assets means a $ea"er 8@1 !%e %i-%er t%e ta2 rate for a firm/ t%e lo$er t%e interest 'overa-e ratio Question # 1 of 15 ( Start time: 04:44:5; AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! !%e 'ost of e,uit#0 Sele't 'orre't option: !%e minimum rate t%at a firm s%ould earn on t%e e,uit#6finan'ed part of an investment A return on t%e e,uit#6finan'ed portion of an investment t%at/ at $orst/ leaves t%e mar"et pri'e of t%e sto'" un'%an-ed ?# far t%e most diffi'ult 'omponent 'ost to estimate Kenerall# lo$er t%an t%e (efore6ta2 'ost of de(t Question # 2 of 15 ( Start time: 04:4;:12 AM !otal Mar"s: 1 .%i'% of t%e follo$in- statements is true0 Sele't 'orre't option: Composed & Solved

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!%e finan'ial ris" of a firm de'reases $%en it ta"es on a ris"# pro=e't !%e finan'ial ris" of a firm in'reases $%en it ta"es on more e,uit# !%e (usiness ris" of a firm in'reases $%en it ta"es on a ris"# pro=e't !%e (usiness ris" of a firm in'reases $%en it ta"es on more de(t Question # 3 of 15 ( Start time: 04:45:15 AM !otal Mar"s: 1 .%# mar"ets and mar"et returns flu'tuate0 Sele't 'orre't option: ?e'ause of politi'al fa'tors ?e'ause of so'ial fa'tors ?e'ause of so'io6politi'al fa'tors ?e'ause of ma'ro s#stemati' fa'tors Question # 4 of 15 ( Start time: 04:45:33 AM !otal Mar"s: 1 .%en a (ond $ill sell at a dis'ount0 Sele't 'orre't option: !%e 'oupon rate is -reater t%an t%e 'urrent #ield and t%e 'urrent #ield is -reater t%an #ield to maturit# !%e 'oupon rate is -reater t%an #ield to maturit# !%e 'oupon rate is less t%an t%e 'urrent #ield and t%e 'urrent #ield is -reater t%an t%e #ield to maturit# !%e 'oupon rate is less t%an t%e 'urrent #ield and t%e 'urrent #ield is less t%an #ield to maturit# Question # 5 of 15 ( Start time: 04:48:01 AM !otal Mar"s: 1 Stud# t%e time line and a''ompan#in- 56period 'as%6flo$ pattern (elo$) 0 1 2 3 4 5 ; !ime line T66666666T66666666T66666666T66666666T66666666T66666666T 8s)10 8s)10 8s)10 8s)10 8s)10 Cas% flo$s U U A ? !%e present value of t%e 56period annuit# s%o$n a(ove as of 9oint A is t%e present value of a 56period &&&&&&&&&&&&&& / $%ereas t%e future value of t%e same annuit# as of 9oint ? is t%e future value of a 56period &&&&&&&&&&&&&& ) Sele't 'orre't option: @rdinar# annuit#< ordinar# annuit# @rdinar# annuit#< annuit# due Annuit# due< annuit# due Annuit# due< ordinar# annuit# Question # ; of 15 ( Start time: 04:48:2; AM !otal Mar"s: 1 .%i'% -roup of ratios s%o$s t%e e2tent to $%i'% t%e firm is finan'ed $it% de(t0 Composed & Solved

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Sele't 'orre't option: *i,uidit# ratios Fe(t ratios Covera-e ratios 9rofita(ilit# ratios Question # 5 of 15 ( Start time: 04:48:42 AM !otal Mar"s: 1 1n $%i'% of t%e follo$in- approa'% #ou need to (rin- all t%e pro=e'ts to t%e same len-t% in time0 Sele't 'orre't option: M188 approa'% Koin- 'on'ern approa'% Common life approa'% +,uivalent annual approa'% Question # 8 of 15 ( Start time: 04:49:14 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! an e2ample of %#(rid e,uit# Sele't 'orre't option: Converti(le ?onds Converti(le Fe(enture Common s%ares 9referred s%ares Question # 9 of 15 ( Start time: 04:49:31 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! an e2ample of a finan'ial intermediar#0 Sele't 'orre't option: .is'onsin S&*/ a savin-s and loan asso'iation Stron- Capital Appre'iation/ a mutual fund Mi'rosoft Corporation/ a soft$are firm Colle-e Credit/ a 'redit union Question # 10 of 15 ( Start time: 04:49:38 AM !otal Mar"s: 1 .%i'% of t%e follo$in- e,uation is 7@! 'orre't0 Sele't 'orre't option: Kross 8evenue S Admin & @peratin- +2penses N @peratin- 8evenue @t%er +2penses D @t%er 8evenue N +?1! Composed & Solved

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+?1! S >inan'ial C%ar-es & 1nterest N +?! 7et 1n'ome S Fividends N 8etained +arninQuestion # 11 of 15 ( Start time: 04:50:03 AM !otal Mar"s: 1 1f 2 sto'"s move in t%e same dire'tion to-et%er t%en $%at $ill (e t%e 'orrelation 'oeffi'ient0 Sele't 'orre't option: 0 1)0 61)0 1)5 Question # 12 of 15 ( Start time: 04:50:11 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! true re-ardin- t%e 'apital mar"et0 Sele't 'orre't option: .%ere lon-6term funds 'an (e raised Mone# is invested for periods lon-er t%an a #ear .%ere !>Cs and 71! are e2'%an-ed and traded .%ere overni-%t lendin- & (orro$in- ta"es pla'e Question # 13 of 15 ( Start time: 04:50:20 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t#pe a !emporar# A''ount0 Sele't 'orre't option: Asset *ia(ilit# 8eserves 8evenue Question # 14 of 15 ( Start time: 04:50:38 AM !otal Mar"s: 1 .%i'% of t%e follo$in- refers to t%e ris" asso'iated $it% interest rate un'ertaint#0 Sele't 'orre't option: Fefault ris" premium Soverei-n 8is" 9remium Mar"et ris" premium Maturit# ris" premium Question # 15 of 15 ( Start time: 04:50:53 AM !otal Mar"s: 1 Composed & Solved

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A statisti'al measure of t%e varia(ilit# of a distri(ution around its mean is referred to as &&&&&&&&&&) Sele't 'orre't option: 9ro(a(ilit# distri(ution +2pe'ted return Standard deviation Coeffi'ient of variation Question # 1 of 15 ( Start time: 04:55:29 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! t%e t#pe of I#(rid or-aniJations0 Sele't 'orre't option: S6!#pe Corporation *imited *ia(ilit# 9artners%ip Sole 9roprietors%ip 9rofessional Corporation Question # 2 of 15 ( Start time: 04:55:3; AM !otal Mar"s: 1 An annuit# due is al$a#s $ort% &&&&& a 'ompara(le annuit#) Sele't 'orre't option: *ess t%an More t%an +,ual to Can not (e found from t%e -iven information Question # 3 of 15 ( Start time: 04:55:42 AM !otal Mar"s: 1 1f all t%in-s e,ual/ $%en diversifi'ation is most effe'tive0 Sele't 'orre't option: Se'uritiesG returns are positivel# 'orrelated Se'uritiesG returns are un'orrelated Se'uritiesG returns are %i-% Se'uritiesG returns are ne-ativel# 'orrelated Question # 4 of 15 ( Start time: 04:58:00 AM !otal Mar"s: 1 Io$ t%e (eta of t%e sto'" 'ould (e 'al'ulated0 Sele't 'orre't option: ?# monitorin- pri'e of t%e sto'" Composed & Solved

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?# monitorin- rate of return of t%e sto'" ?# 'omparin- t%e '%an-es in t%e sto'" mar"et pri'e to t%e '%an-es in t%e sto'" mar"et inde2 All of t%e -iven options Question # 5 of 15 ( Start time: 04:58:09 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 'alled t%e ta2 savin-s of t%e firm derived from t%e dedu'ti(ilit# of interest e2pense0 Sele't 'orre't option: 1nterest ta2 s%ield Fepre'ia(le (asis >inan'in- um(rella Current #ield Question # ; of 15 ( Start time: 04:59:34 AM !otal Mar"s: 1 A(ove t%e (rea"even +?1!/ in'reased finan'ial levera-e $ill &&&&&&&&&& +9S/ all else t%e same) Assume t%ere are no ta2es Sele't 'orre't option: 1n'rease Fe'rease +it%er in'rease or de'rease 7one of t%e -iven options Question # 5 of 15 ( Start time: 04:59:53 AM !otal Mar"s: 1 .%at is t%e easiest met%od to diversif# a$a# firm6spe'ifi' ris"s0 Sele't 'orre't option: !o (u# sto'"s $it% a (eta of 1)0 !o (uild a portfolio $it% 5610 individual sto'"s !o pur'%ase t%e s%ares of a mutual fund !o pur'%ase sto'"s t%at plot a(ove t%e se'urit# mar"et line Question # 8 of 15 ( Start time: 05:00:00 AM !otal Mar"s: 1 1f ris" and return 'om(ination of an# sto'" is a(ove t%e SM*/ $%at does it mean0 Sele't 'orre't option: 1t is offerin- lo$er rate of return as 'ompared to t%e effi'ient sto'" 1t is offerin- %i-%er rate of return as 'ompared to t%e effi'ient sto'" 1ts rate of return is Jero as 'ompared to t%e effi'ient sto'" Composed & Solved

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1t is offerin- rate of return e,ual to t%e effi'ient sto'" Question # 9 of 15 ( Start time: 05:00:30 AM !otal Mar"s: 1 Kiven no '%an-e in re,uired returns/ t%e pri'e of a sto'" $%ose dividend is 'onstant $ill&&&&&&&&&&) Sele't 'orre't option: Fe'rease over time at a rate of rM 8emain un'%an-ed 1n'rease over time at a rate of rM Fe'rease over time at a rate e,ual to t%e dividend -ro$t% rate Question # 10 of 15 ( Start time: 05:01:01 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e ma2imum amount of de(t (and ot%er fi2ed6'%ar-e finan'int%at a firm 'an ade,uatel# servi'e0 Sele't 'orre't option: Fe(t 'apa'it# Fe(t6servi'e (urden Ade,ua'# 'apa'it# >i2ed6'%ar-e (urden Question # 11 of 15 ( Start time: 05:01:15 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is related to t%e use *o$er finan'ial levera-e0 Sele't 'orre't option: >i2ed 'osts Caria(le 'osts Fe(t finan'inCommon e,uit# finan'inQuestion # 12 of 15 ( Start time: 05:01:24 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is a pa#ment of additional s%ares to s%are%olders in lieu of 'as%0 Sele't 'orre't option: Sto'" split Sto'" dividend +2tra dividend 8e-ular dividend Composed & Solved

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Question # 13 of 15 ( Start time: 05:02:08 AM !otal Mar"s: 1 A''ordin- to MM 11/ $%at %appens $%en a firmGs de(t6to6e,uit# ratio in'reases0 Sele't 'orre't option: 1ts finan'ial ris" in'reases 1ts operatin- ris" in'reases !%e e2pe'ted return on e,uit# in'reases !%e e2pe'ted return on e,uit# de'reases Question # 14 of 15 ( Start time: 05:03:01 AM !otal Mar"s: 1 .%ere t%ere is sin-le period 'apital rationin-/ $%at is t%e most sensi(le $a# of ma"ininvestment de'isions0 Sele't 'orre't option: C%oose all pro=e'ts $it% a positive 79C Kroup pro=e'ts to-et%er to allo'ate t%e funds availa(le and sele't t%e -roup of pro=e'ts $it% t%e %i-%est 79C C%oose t%e pro=e't $it% t%e %i-%est 79C Cal'ulate 188 and sele't t%e pro=e'ts $it% t%e %i-%est 188s Question # 15 of 15 ( Start time: 05:04:29 AM !otal Mar"s: 1 .%i'% of t%e follo$in- in'ludes t%e plannin-/ dire'tin-/ monitorin-/ or-aniJin-/ and 'ontrollin- of t%e monetar# resour'es of an or-aniJation0 Sele't 'orre't option: >inan'ial a''ountin>inan'ial mana-ement >inan'ial en-ineerin>inan'ial (ud-etinQuestion # 1 of 15 ( Start time: 05:23:24 AM !otal Mar"s: 1 &&&&&&&&&& is t%e varia(ilit# of return on sto'"s or portfolios not e2plained (# -eneral mar"et movements) 1t is avoida(le t%rou-% diversifi'ation) Sele't 'orre't option: S#stemati' ris" Standard deviation :ns#stemati' ris" Coeffi'ient of variation Question # 2 of 15 ( Start time: 05:23:45 AM !otal Mar"s: 1 Composed & Solved

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.%i'% of t%e follo$in- is 7@! t%e step of 9er'enta-e of sales to (e used in >inan'ial >ore'astin-0 Sele't 'orre't option: +stimate #ear6(#6#ear Sales 8evenue and +2penses +stimate *evels of 1nvestment 7eeds re,uired to Meet +stimated Sales +stimate t%e >inan'in- 7eeds +stimate t%e retained earnin-s Question # 3 of 15 ( Start time: 05:24:24 AM !otal Mar"s: 1 &&&&&&&& is paid (# 'ompanies $it% lo$er -rade (onds li"e CC or C ratin-s) Sele't 'orre't option: Fefault ris" premium Soverei-n 8is" 9remium Mar"et ris" premium Maturit# ris" premium Question # 4 of 15 ( Start time: 05:24:32 AM !otal Mar"s: 1 1n 'al'ulatin- t%e 'osts of t%e individual 'omponents of a firmGs finan'in-/ t%e 'orporate ta2 rate is important to $%i'% of t%e follo$in- 'omponent 'ost formulas0 Sele't 'orre't option: Common sto'" Fe(t 9referred sto'" 7one of t%e a(ove Question # 5 of 15 ( Start time: 05:24:40 AM !otal Mar"s: 1 !%e sto'" in #our portfolio $as sellin- for 8s)40 per s%are #esterda#/ (ut %as toda# de'lared a t%ree for t$o split) .%i'% of t%e follo$in- statements seems to (e true0 Sele't 'orre't option: !%ere $ill (e t$o6t%irds as man# s%ares outstandin-/ and t%e# $ill sell for 8s);0)00 ea'% !%ere $ill (e four times as man# s%ares outstandin-/ and t%e# $ill sell for 8s)1;0)00 ea'% !%ere $ill (e 50 per'ent more s%ares outstandin- and t%e# $ill sell for 8s)2;);5 ea'% !%ere $ill (e one6and6one6%alf times as man# s%ares outstandin-/ and t%e# $ill sell for 8s);0)00 ea'% Question # ; of 15 ( Start time: 05:24:45 AM !otal Mar"s: 1 Composed & Solved

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.%i'% of t%e follo$in- 'an (e used to 'al'ulate t%e ris" of t%e lar-er portfolio0 Sele't 'orre't option: Standard deviation +9S approa'% Matri2 approa'% KordonHs Approa'% Question # 5 of 15 ( Start time: 05:25:05 AM !otal Mar"s: 1 !%e ris" t%at 'overs events li"e une2pe'ted '%an-es in t%e e'onom# refers to: Sele't 'orre't option: S#stemati' ris" :ns#stemati' ris" !otal ris" All of t%e a(ove Question # 8 of 15 ( Start time: 05:25:20 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e ma2imum amount of de(t (and ot%er fi2ed6'%ar-e finan'int%at a firm 'an ade,uatel# servi'e0 Sele't 'orre't option: Fe(t 'apa'it# Fe(t6servi'e (urden Ade,ua'# 'apa'it# >i2ed6'%ar-e (urden Question # 9 of 15 ( Start time: 05:25:25 AM !otal Mar"s: 1 .%at is #ield to maturit# on a (ond0 Sele't 'orre't option: ?elo$ t%e 'oupon rate $%en t%e (ond sells at a dis'ount/ and e,ual to t%e 'oupon rate $%en t%e (ond sells at a premium !%e dis'ount rate t%at $ill set t%e present value of t%e pa#ments e,ual to t%e (ond pri'e ?ased on t%e assumption t%at an# pa#ments re'eived are reinvested at t%e 'oupon rate 7one of t%e a(ove Question # 10 of 15 ( Start time: 05:25:49 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e per'enta-e of interest '%ar-ed at ea'% 'ompoundin- time0 Sele't 'orre't option: Composed & Solved

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7ominal interest 8ate +ffe'tive interest 8ate Annual per'enta-e rate 9eriodi' interest rate Question # 11 of 15 ( Start time: 05:25:5; AM !otal Mar"s: 1 .%ere t%ere is sin-le period 'apital rationin-/ $%at is t%e most sensi(le $a# of ma"ininvestment de'isions0 Sele't 'orre't option: C%oose all pro=e'ts $it% a positive 79C Kroup pro=e'ts to-et%er to allo'ate t%e funds availa(le and sele't t%e -roup of pro=e'ts $it% t%e %i-%est 79C C%oose t%e pro=e't $it% t%e %i-%est 79C Cal'ulate 188 and sele't t%e pro=e'ts $it% t%e %i-%est 188s Question # 12 of 15 ( Start time: 05:2;:03 AM !otal Mar"s: 1 .%i'% of t%e follo$in- $ould 7@! (e t%e part of t%e ris" if t%e sto'" is a sin-le sto'" investment0 Sele't 'orre't option: Compan# spe'ifi' ris" :n6diversifia(le ris" Fiversifia(le ris" 8andom ris" Question # 13 of 15 ( Start time: 05:2;:20 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e ma2imum amount of de(t (and ot%er fi2ed6'%ar-e finan'int%at a firm 'an ade,uatel# servi'e0 Sele't 'orre't option: Fe(t 'apa'it# Fe(t6servi'e (urden Ade,ua'# 'apa'it# >i2ed6'%ar-e (urden Question # 14 of 15 ( Start time: 05:2;:38 AM !otal Mar"s: 1 !%e e2pli'it 'osts asso'iated $it% 'orporate default/ su'% as le-al e2penses/ are t%e &&&&&&&&&&& of t%e firm) Sele't 'orre't option: Composed & Solved

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>lotation 'osts Fefault (eta 'oeffi'ients Fire't (an"rupt'# 'osts 1ndire't (an"rupt'# 'osts Question # 15 of 15 ( Start time: 05:25:45 AM !otal Mar"s: 1 .%i'% of t%e follo$in- $ill 7@! e,uate t%e future value of 'as% inflo$s to t%e present value of 'as% outflo$s0 Sele't 'orre't option: Fis'ount rate 9rofita(ilit# inde2 1nternal rate of return Multiple 1nternal rate of return Question # 1 of 15 ( Start time: 05:35:30 AM !otal Mar"s: 1 .%i'% of t%e follo$in- fa'tors mi-%t affe't sto'" returns0 Sele't 'orre't option: ?usiness '#'le 1nterest rate flu'tuations 1nflation rates All of t%e a(ove Question # 2 of 15 ( Start time: 05:35:48 AM !otal Mar"s: 1 .%at is t%e additional amount a (orro$er must pa# to lender to 'ompensate for assumin- t%e ris" asso'iated $it% non6pa#ment0 Sele't 'orre't option: Fefault ris" premium Soverei-n 8is" 9remium Mar"et ris" premium Maturit# ris" premium Question # 3 of 15 ( Start time: 05:3;:12 AM !otal Mar"s: 1 .%i'% of t%e follo$in- formulas represents a 'orre't 'al'ulation of t%e de-ree of operatinlevera-e0 Sele't 'orre't option: (Q 6 Q?+ AQ (+?1! A (+?1! 6 >C Composed & Solved

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BQ(96C D >CE ABQ(96C E Q(96C A BQ(96C 6 >CE Question # 4 of 15 ( Start time: 05:3;:22 AM !otal Mar"s: 1 !%e lo-i' (e%ind &&&&&&&&& is t%at instead of loo"in- at net 'as% flo$s #ou loo" at 'as% inflo$s and outflo$s separatel# for ea'% point in time) Sele't 'orre't option: 188 M188 9C 79C Question # 5 of 15 ( Start time: 05:3;:38 AM !otal Mar"s: 1 .%en ta2es are 'onsidered/ t%e value of a levered firm e,uals t%e value of t%e&&&&&&&&) Sele't 'orre't option: :nlevered firm :nlevered firm plus t%e value of t%e de(t :nlevered firm plus t%e present value of t%e ta2 s%ield :nlevered firm plus t%e value of t%e de(t plus t%e value of t%e ta2 s%ield Question # ; of 15 ( Start time: 05:3;:45 AM !otal Mar"s: 1 .%at is a le-al a-reement/ also 'alled t%e deed of trust/ (et$een t%e 'orporation issuin(onds and t%e (ond%olders t%at esta(lis% t%e terms of t%e (ond issue0 Sele't 'orre't option: 1ndenture Fe(enture ?ond ?ond trustee Question # 5 of 15 ( Start time: 05:35:05 AM !otal Mar"s: 1 .%i'% if t%e follo$in- refers to 'apital (ud-etin-0 Sele't 'orre't option: 1nvestment in lon-6term lia(ilities 1nvestment in fi2ed assets 1nvestment in 'urrent assets 1nvestment in s%ort6term lia(ilities Composed & Solved

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Question # 8 of 15 ( Start time: 05:35:23 AM !otal Mar"s: 1 .%at is t%e most important 'riteria in 'apital (ud-etin-0 Sele't 'orre't option: 8eturn on investment 9rofita(ilit# inde2 7et present value 9a# (a'" period Question # 9 of 15 ( Start time: 05:35:43 AM !otal Mar"s: 1 !%e value of t%e (ond is 7@! dire'tl# tied to t%e value of $%i'% of t%e follo$in- assets0 Sele't 'orre't option: 8eal assets of t%e (usiness *i,uid assets of t%e (usiness >i2ed assets of t%e (usiness *on- term assets of t%e (usiness Question # 10 of 15 ( Start time: 05:38:14 AM !otal Mar"s: 1 >or most firms/ 9A+ ratios and ris"&&&&&&&&&) Sele't 'orre't option: .ill (e dire'tl# related .ill %ave an inverse relations%ip .ill (e unrelated 7one of t%e a(ove) Question # 11 of 15 ( Start time: 05:38:21 AM !otal Mar"s: 1 Io$ 'an a 'ompan# improve (lo$er its de(t6to6total asset ratio0 Sele't 'orre't option: ?# (orro$in- more ?# s%iftin- s%ort6term to lon-6term de(t ?# s%iftin- lon-6term to s%ort6term de(t ?# sellin- 'ommon sto'" Question # 12 of 15 ( Start time: 05:38:35 AM !otal Mar"s: 1 >or Compan# A/ plo$ (a'" ratio is 30M) .%at $ill (e its 9a#6out ratio0 Sele't 'orre't option: 3)33M Composed & Solved

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30M 31M 50M Question # 13 of 15 ( Start time: 05:38:55 AM !otal Mar"s: 1 As interest rates -o up/ t%e present value of a stream of fi2ed 'as% flo$s &&&&&) Sele't 'orre't option: Koes do$n Koes up Sta#s t%e same Can not (e found from t%e -iven information Question # 14 of 15 ( Start time: 05:39:13 AM !otal Mar"s: 1 .%i'% of t%e follo$in- s%o$s A** possi(le 8is" S8eturn 'om(inations for All 'om(inations of t%e sto'"s in t%e portfolio6 $%et%er effi'ient or not) Sele't 'orre't option: 9ara'%ute -rap% Capital mar"et line Se'urit# mar"et line All of t%e -iven options Question # 15 of 15 ( Start time: 05:39:44 AM !otal Mar"s: 1 All of t%e follo$in- are t%e finan'ial statements used for t%e purpose of reportin- and anal#sis +VC+9!: Sele't 'orre't option: ?alan'e S%eet 1n'ome Statement Cas% (ud-et Statement of 8etained +arnin-s Question # 1 of 15 ( Start time: 05:48:12 AM !otal Mar"s: 1 .%o determine t%e mar"et pri'e of a s%are of 'ommon sto'"0 Sele't 'orre't option: !%e (oard of dire'tors of t%e firm !%e sto'" e2'%an-e on $%i'% t%e sto'" is listed !%e president of t%e 'ompan# 1ndividuals (u#in- and sellin- t%e sto'" Composed & Solved

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Question # 2 of 15 ( Start time: 05:48:55 AM !otal Mar"s: 1 .%i'% of t%e follo$in- needs to (e e2'luded $%ile $e 'al'ulate t%e in'remental 'as% flo$s0 Sele't 'orre't option: Fepre'iation Sun" 'ost @pportunit# 'ost 7on6'as% item Question # 3 of 15 ( Start time: 05:49:14 AM !otal Mar"s: 1 :nder t%e idealiJed 'onditions of MM/ $%i'% statement is 'orre't $%en a firm issues ne$ sto'" in order to pa# a 'as% dividend on e2istin- s%ares0 Sele't 'orre't option: !%e ne$ s%ares are $ort% less t%an t%e old s%ares !%e old s%ares drop in value to e,ual t%e ne$ pri'e !%e value of t%e firm is redu'ed (# t%e amount of t%e dividend !%e value of t%e firm is unaffe'ted Question # 4 of 15 ( Start time: 05:50:22 AM !otal Mar"s: 1 .%i'% of t%e follo$in- $ould 7@! (e t%e part of t%e ris" if t%e sto'" is a sin-le sto'" investment0 Sele't 'orre't option: Compan# spe'ifi' ris" :n6diversifia(le ris" Fiversifia(le ris" 8andom ris" Question # 5 of 15 ( Start time: 05:50:40 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e ris" of investin- funds in anot%er 'ountr#0 Sele't 'orre't option: Fefault ris" premium Soverei-n 8is" 9remium Mar"et ris" premium Maturit# ris" premium Question # ; of 15 ( Start time: 05:51:08 AM !otal Mar"s: 1 Composed & Solved

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.%i'% of t%e follo$in- stipulate a relations%ip (et$een e2pe'ted return and ris"0 Sele't 'orre't option: A9! stipulates CA9M stipulates ?ot% CA9M and A9! stipulate 7eit%er CA9M nor A9! stipulate Question # 5 of 15 ( Start time: 05:51:15 AM !otal Mar"s: 1 .%i'% of t%e follo$in- allo$s to -rap%i'all# depi'tin- t%e timin- of t%e 'as% flo$s as $ell as t%eir nature as eit%er inflo$s or outflo$s0 Sele't 'orre't option: Cas% flo$ dia-ram Cas% (ud-et Cas% flo$ statement 7one of t%e -iven options Question # 8 of 15 ( Start time: 05:51:45 AM !otal Mar"s: 1 A 56#ear ordinar# annuit# %as a present value of 8s)1/000) 1f t%e interest rate is 8 per'ent/ t%e amount of ea'% annuit# pa#ment is 'losest to $%i'% of t%e follo$in-0 Sele't 'orre't option: 8s) 250)44 8s) 231)91 8s)181);2 8s)184)08 Question # 9 of 15 ( Start time: 05:52:04 AM !otal Mar"s: 1 1nvestors ma# (e $illin- to pa# a premium for sta(le dividends (e'ause of t%e informational 'ontent of &&&&&&&&&&/ t%e desire of investors for &&&&&&&&&&/ and 'ertain &&&&&&&&&&) Sele't 'orre't option: 1nstitutional 'onsiderations< dividends< 'urrent in'ome Fividends< 'urrent in'ome< institutional 'onsiderations Current in'ome< dividends< institutional 'onsiderations 1nstitutional 'onsiderations< 'urrent in'ome< dividends Question # 10 of 15 ( Start time: 05:52:11 AM !otal Mar"s: 1 Composed & Solved

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!%e e2pli'it 'osts asso'iated $it% 'orporate default/ su'% as le-al e2penses/ are t%e &&&&&&&&&&& of t%e firm) Sele't 'orre't option: >lotation 'osts Fefault (eta 'oeffi'ients Fire't (an"rupt'# 'osts 1ndire't (an"rupt'# 'osts Question # 11 of 15 ( Start time: 05:52:32 AM !otal Mar"s: 1 Io$ e'onomi' value is added (+CA 'al'ulated0 Sele't 'orre't option: 1t is t%e differen'e (et$een t%e mar"et value of t%e firm and t%e (oo" value of e,uit# 1t is t%e firmGs net operatin- profit after ta2 (7@9A! less a dollar 'ost of 'apital '%ar-e 1t is t%e net in'ome of t%e firm less a dollar 'ost t%at e,uals .AAC multiplied (# t%e (oo" value of lia(ilities and e,uities 7one of t%e -iven option Question # 12 of 15 ( Start time: 05:53:10 AM !otal Mar"s: 1 &&&&&&&& is paid (# 'ompanies $it% lo$er -rade (onds li"e CC or C ratin-s) Sele't 'orre't option: Fefault ris" premium Soverei-n 8is" 9remium Mar"et ris" premium Maturit# ris" premium Question # 13 of 15 ( Start time: 05:53:18 AM !otal Mar"s: 1 1n effi'ient mar"et t%e sto'" pri'e depends upon t%e re,uired return $%i'% depends upon &&&&&&&&&) Sele't 'orre't option: Mar"et ris" !otal ris" Fiversified ris" 7on6 s#stemati' ris" Question # 14 of 15 ( Start time: 05:53:53 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e 'as% re,uired durin- a spe'ifi' period to meet interest e2penses and prin'ipal pa#ments0 Composed & Solved

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Sele't 'orre't option: Fe(t 'apa'it# Fe(t6servi'e (urden Ade,ua'# 'apa'it# >i2ed6'%ar-e (urden Question # 15 of 15 ( Start time: 05:54:00 AM !otal Mar"s: 1 !otal portfolio ris" is &&&&&&&&&&) Sele't 'orre't option: +,ual to s#stemati' ris" plus non6diversifia(le ris" +,ual to avoida(le ris" plus diversifia(le ris" +,ual to s#stemati' ris" plus unavoida(le ris" +,ual to s#stemati' ris" plus diversifia(le ris" Question # 1 of 15 ( Start time: 0;:02:09 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! an e2ample of a finan'ial intermediar#0 Sele't 'orre't option: .is'onsin S&*/ a savin-s and loan asso'iation Stron- Capital Appre'iation/ a mutual fund Mi'rosoft Corporation/ a soft$are firm Colle-e Credit/ a 'redit union Question # 2 of 15 ( Start time: 0;:02:15 AM !otal Mar"s: 1 .%i'% of t%e follo$in- are "no$n as Fis'retionar# >inan'in-0 Sele't 'orre't option: Current lia(ilities Current assets >i2ed assets *on-6term lia(ilities Question # 3 of 15 ( Start time: 0;:03:18 AM !otal Mar"s: 1 .%i'% of t%e follo$in- refers to a poli'# of dividend Lsmoot%in-L0 Sele't 'orre't option: Maintainin- a 'onstant dividend pa#out ratio Weepin- t%e re-ular dividend at t%e same level indefinitel# Maintainin- a stead# pro-ression of dividend in'reases over time Composed & Solved

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Alternatin- 'as% dividends $it% sto'" dividends Question # 4 of 15 ( Start time: 0;:04:3; AM !otal Mar"s: 1 .%i'% of t%e follo$in- statements (in -eneral is 'orre't0 Sele't 'orre't option: A lo$ re'eiva(les turnover is desira(le !%e lo$er t%e total de(t6to6e,uit# ratio/ t%e lo$er t%e finan'ial ris" for a firm An in'rease in net profit mar-in $it% no '%an-e in sales or assets means a $ea"er 8@1 !%e %i-%er t%e ta2 rate for a firm/ t%e lo$er t%e interest 'overa-e ratio Question # 5 of 15 ( Start time: 0;:05:04 AM !otal Mar"s: 1 .%i'% of t%e follo$in- $ould -enerall# %ave unlimited lia(ilit#0 Sele't 'orre't option: A limited partner in a partners%ip A s%are%older in a 'orporation !%e o$ner of a sole proprietors%ip A mem(er in a limited lia(ilit# 'ompan# (**C Question # ; of 15 ( Start time: 0;:05:23 AM !otal Mar"s: 1 Cal'ulate t%e (rea"6even point for sales revenues -iven t%e follo$in- information) !%e firm %as 8s)1/ 000/000 in fi2ed 'osts) !%e firm anti'ipates t%at varia(le 'osts $ill (e 8s)1 for ever# 8s)5 in sales) Sele't 'orre't option: 8s)1/ 250/000 8s)1/ 000/000 8s)250/ 000 8s)200/ 000 Question # 5 of 15 ( Start time: 0;:05:39 AM !otal Mar"s: 1 1n effi'ient mar"et t%e sto'" pri'e depends upon t%e re,uired return $%i'% depends upon &&&&&&&&&) Sele't 'orre't option: Mar"et ris" !otal ris" Fiversified ris" 7on6 s#stemati' ris" Composed & Solved

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Question # 8 of 15 ( Start time: 0;:05:55 AM !otal Mar"s: 1 :pon $%i'% of t%e follo$in- a firmGs de-ree of operatin- levera-e (F@* depends primaril#0 Sele't 'orre't option: Sales varia(ilit# *evel of fi2ed operatin- 'osts Closeness to its operatin- (rea"6even point Fe(t6to6e,uit# ratio Question # 9 of 15 ( Start time: 0;:0;:02 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 'orre't re-ardin- t%e opportunit# 'ost of 'apital for a pro=e't0 Sele't 'orre't option: !%e opportunit# 'ost of 'apital is t%e return t%at investors -ive up (# investin- in t%e pro=e't rat%er t%an in se'urities of e,uivalent ris") >inan'ial mana-ers use t%e 'apital asset pri'in- model to estimate t%e opportunit# 'ost of 'apital !%e 'ompan# 'ost of 'apital is t%e e2pe'ted rate of return demanded (# investors in a 'ompan# All of t%e -iven options Question # 10 of 15 ( Start time: 0;:0;:58 AM !otal Mar"s: 1 A 'ompan# $%ose sto'" is sellin- at a 9A+ ratio -reater t%an t%e 9A+ ratio of a mar"et inde2 most li"el# %as &&&&&&&&&) Sele't 'orre't option: An anti'ipated earnin-s -ro$t% rate $%i'% is less t%an t%at of t%e avera-e firm A dividend #ield $%i'% is less t%an t%at of t%e avera-e firm *ess predi'ta(le earnin-s -ro$t% t%an t%at of t%e avera-e firm Kreater '#'li'alit# of earnin-s -ro$t% t%an t%at of t%e avera-e firm Question # 11 of 15 ( Start time: 0;:05:19 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is >A*S+ a(out 9erpetuit#0 Sele't 'orre't option: 1t is a series of 'as% flo$s Cas% flo$s o''ur for a spe'ifi' time period 1ts 'as% flo$s are identi'al 7one of t%e -iven options Composed & Solved

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Question # 12 of 15 ( Start time: 0;:05:39 AM !otal Mar"s: 1 .%at does t%e la$ of 'onservation of value implies0 Sele't 'orre't option: !%e mi2 of senior and su(ordinated de(t does not affe't t%e value of t%e firm !%e mi2 of 'onverti(le and non6'onverti(le de(t does not affe't t%e value of t%e firm !%e mi2 of 'ommon sto'" and preferred sto'" does not affe't t%e value of t%e firm All of t%e -iven options Question # 13 of 15 ( Start time: 0;:08:09 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 'alled t%e ta2 savin-s of t%e firm derived from t%e dedu'ti(ilit# of interest e2pense0 Sele't 'orre't option: 1nterest ta2 s%ield Fepre'ia(le (asis >inan'in- um(rella Current #ield Question # 14 of 15 ( Start time: 0;:08:29 AM !otal Mar"s: 1 .%at are t%e Fire't 'laim se'urities0 Sele't 'orre't option: !%e se'urities $%ose value depends on t%e 'as% flo$s -enerated (# t%e underl#in- assets !%e se'urities $%ose value depends on t%e value of t%e underl#in- assets !%e se'urities t%at do not dire'tl# -enerate an# returns for its investors All of t%e -iven options Question # 15 of 15 ( Start time: 0;:08:45 AM !otal Mar"s: 1 An investment proposal s%ould (e =ud-ed in $%et%er or not it provides: Sele't 'orre't option: A return e,ual to t%e return re,uire (# t%e investor A return more t%an re,uired (# investor A return less t%an re,uired (# investor A return e,ual to or more t%an re,uired (# investor Question # 1 of 15 ( Start time: 0;:14:45 AM !otal Mar"s: 1 &&&&&&&& is paid (# 'ompanies $it% lo$er -rade (onds li"e CC or C ratin-s) Sele't 'orre't option: Composed & Solved

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Fefault ris" premium Soverei-n 8is" 9remium Mar"et ris" premium Maturit# ris" premium Question # 2 of 15 ( Start time: 0;:14:54 AM !otal Mar"s: 1 Io$ LS%are%older $ealt%L is represented in a firm0 Sele't 'orre't option: !%e num(er of people emplo#ed in t%e firm !%e (oo" value of t%e firmGs assets less t%e (oo" value of its lia(ilities !%e mar"et pri'e per s%are of t%e firmGs 'ommon sto'" !%e amount of salar# paid to its emplo#ees Question # 3 of 15 ( Start time: 0;:15:13 AM !otal Mar"s: 1 .%i'% of t%e follo$in- needs to (e e2'luded $%ile $e 'al'ulate t%e in'remental 'as% flo$s0 Sele't 'orre't option: Fepre'iation Sun" 'ost @pportunit# 'ost 7on6'as% item Question # 4 of 15 ( Start time: 0;:15:20 AM !otal Mar"s: 1 1f all t%in-s e,ual/ $%en diversifi'ation is most effe'tive0 Sele't 'orre't option: Se'uritiesG returns are positivel# 'orrelated Se'uritiesG returns are un'orrelated Se'uritiesG returns are %i-% Se'uritiesG returns are ne-ativel# 'orrelated Question # 5 of 15 ( Start time: 0;:15:25 AM !otal Mar"s: 1 .%i'% of t%e follo$in- refers to finan'ial ris"0 Sele't 'orre't option: 8is" of o$nin- e,uit# se'urities 8is" fa'ed (# e,uit# %olders $%en de(t is used Keneral (usiness ris" of t%e firm 9ossi(ilit# t%at interest rates $ill in'rease Composed & Solved

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Question # ; of 15 ( Start time: 0;:1;:32 AM !otal Mar"s: 1 An ar(itra-e opportunit# e2ists if an investor 'an 'onstru't a &&&&&&&&&& investment portfolio t%at $ill #ield a sure profit) Sele't 'orre't option: 9ositive 7e-ative Rero All of t%e a(ove Question # 5 of 15 ( Start time: 0;:1;:45 AM !otal Mar"s: 1 .%i'% of t%e follo$in- ris" 'an (e diversified a$a#0 Sele't 'orre't option: S#stemati' ris" ?eta >irm spe'ifi' ris" Mar"et ris" Question # 8 of 15 ( Start time: 0;:15:05 AM !otal Mar"s: 1 .%i'% of t%e follo$in-s are t%e propositions of Modi-liani and MillerGs0 Sele't 'orre't option: !%e mar"et value of a firmGs 'ommon sto'" is independent of its 'apital stru'ture !%e mar"et value of a firmGs de(t is independent of its 'apital stru'ture !%e mar"et value of an# firm is independent of its 'apital stru'ture 7one of t%e -iven options Question # 9 of 15 ( Start time: 0;:15:25 AM !otal Mar"s: 1 .%i'% of t%e follo$in- statements is true0 Sele't 'orre't option: !%e finan'ial ris" of a firm de'reases $%en it ta"es on a ris"# pro=e't !%e finan'ial ris" of a firm in'reases $%en it ta"es on more e,uit# !%e (usiness ris" of a firm in'reases $%en it ta"es on a ris"# pro=e't !%e (usiness ris" of a firm in'reases $%en it ta"es on more de(t Question # 10 of 15 ( Start time: 0;:15:45 AM !otal Mar"s: 1 1f sto'" is a part of totall# diversified portfolio t%en its 'ompan# ris" must (e e,ual to: Sele't 'orre't option: Composed & Solved

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0 0)5 1 61 Question # 11 of 15 ( Start time: 0;:18:04 AM !otal Mar"s: 1 A statisti'al measure of t%e varia(ilit# of a distri(ution around its mean is referred to as &&&&&&&&&&) Sele't 'orre't option: 9ro(a(ilit# distri(ution +2pe'ted return Standard deviation Coeffi'ient of variation Question # 12 of 15 ( Start time: 0;:18:20 AM !otal Mar"s: 1 .%i'% of t%e follo$in- s%o$s A** possi(le 8is" S8eturn 'om(inations for All 'om(inations of t%e sto'"s in t%e portfolio6 $%et%er effi'ient or not) Sele't 'orre't option: 9ara'%ute -rap% Capital mar"et line Se'urit# mar"et line All of t%e -iven options Question # 13 of 15 ( Start time: 0;:18:25 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is a pa#ment of additional s%ares to s%are%olders in lieu of 'as%0 Sele't 'orre't option: Sto'" split Sto'" dividend +2tra dividend 8e-ular dividend Question # 14 of 15 ( Start time: 0;:18:35 AM !otal Mar"s: 1 .%at t#pe of lon-6term finan'in- most li"el# %as t%e follo$in- features: 1 it %as an infinite life/ 2 it pa#s dividends/ and 3 its 'as% flo$s are e2pe'ted to (e a 'onstant annuit# stream0 Sele't 'orre't option: Composed & Solved

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*on-6term de(t 9referred sto'" Common sto'" 7one of t%e -iven options Question # 15 of 15 ( Start time: 0;:19:03 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! true re-ardin- t%e 'apital mar"et0 Sele't 'orre't option: .%ere lon-6term funds 'an (e raised Mone# is invested for periods lon-er t%an a #ear .%ere !>Cs and 71! are e2'%an-ed and traded .%ere overni-%t lendin- & (orro$in- ta"es pla'e Question # 1 of 15 ( Start time: 0;:29:41 AM !otal Mar"s: 1 !%e Fu9ont Approa'% (rea"s do$n t%e earnin- po$er on s%are%oldersG (oo" value (8@+ as follo$s: 8@+ N &&&&&&&&&&) Sele't 'orre't option: 7et profit mar-in X !otal asset turnover X +,uit# multiplier !otal asset turnover X Kross profit mar-in X Fe(t ratio !otal asset turnover X 7et profit mar-in !otal asset turnover X Kross profit mar-in X +,uit# multiplier Question # 2 of 15 ( Start time: 0;:30:01 AM !otal Mar"s: 1 .%i'% t#pe of responsi(ilities are primaril# assi-ned to Controller and !reasurer respe'tivel#0 Sele't 'orre't option: @perational< finan'ial mana-ement >inan'ial mana-ement< a''ountinA''ountin-< finan'ial mana-ement >inan'ial mana-ement< operations Question # 3 of 15 ( Start time: 0;:30:21 AM !otal Mar"s: 1 .%i'% of t%e follo$in- in'ludes t%e plannin-/ dire'tin-/ monitorin-/ or-aniJin-/ and 'ontrollin- of t%e monetar# resour'es of an or-aniJation0 Sele't 'orre't option: >inan'ial a''ountin>inan'ial mana-ement Composed & Solved

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>inan'ial en-ineerin>inan'ial (ud-etinQuestion # 4 of 15 ( Start time: 0;:30:29 AM !otal Mar"s: 1 .%i'% of t%e follo$in- 'ould (e defined as t%e 'apital stru'ture of t%e Compan#0 Sele't 'orre't option: !%e firmGs mi2 of different se'urities !%e firmGs de(t6e,uit# ratio !%e mar"et imperfe'tion t%at t%e firmGs mana-er 'an e2ploit All of t%e a(ove Question # 5 of 15 ( Start time: 0;:31:23 AM !otal Mar"s: 1 .%# a sin-le/ overall 'ost of 'apital is often used to evaluate pro=e'ts0 Sele't 'orre't option: 1t avoids t%e pro(lem of 'omputin- t%e re,uired rate of return for ea'% investment 9roposal 1t is t%e onl# $a# to measure a firmGs re,uired return 1t a'"no$led-es t%at most ne$ investment pro=e'ts %ave a(out t%e same de-ree of ris" 1t a'"no$led-es t%at most ne$ investment pro=e'ts offer a(out t%e same e2pe'ted return Question # ; of 15 ( Start time: 0;:31:50 AM !otal Mar"s: 1 .%i'% of t%e follo$in- allo$s to -rap%i'all# depi'tin- t%e timin- of t%e 'as% flo$s as $ell as t%eir nature as eit%er inflo$s or outflo$s0 Sele't 'orre't option: Cas% flo$ dia-ram Cas% (ud-et Cas% flo$ statement 7one of t%e -iven options Question # 5 of 15 ( Start time: 0;:31:55 AM !otal Mar"s: 1 .%at t#pe of lon-6term finan'in- most li"el# %as t%e follo$in- features: 1 it %as an infinite life/ 2 it pa#s dividends/ and 3 its 'as% flo$s are e2pe'ted to (e a 'onstant annuit# stream0 Sele't 'orre't option: *on-6term de(t 9referred sto'" Common sto'" Composed & Solved

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7one of t%e -iven options Question # 8 of 15 ( Start time: 0;:32:05 AM !otal Mar"s: 1 .%i'% of t%e follo$in- value of t%e s%ares '%an-es $it% investorHs per'eption a(out t%e 'ompan#Hs future and suppl# and demand situation0 Sele't 'orre't option: 9ar value Mar"et value 1ntrinsi' value >a'e value Question # 9 of 15 ( Start time: 0;:32:33 AM !otal Mar"s: 1 .%i'% of t%e follo$in- affe'ts pri'e of t%e (ond0 Sele't 'orre't option: Mar"et interest rate 8e,uired rate of return 1nterest rate ris" All of t%e -iven options Question # 10 of 15 ( Start time: 0;:32:44 AM !otal Mar"s: 1 .%i'% of t%e follo$in-s e2pressed t%e proposition t%at t%e value of t%e firm is independent of its 'apital stru'ture0 Sele't 'orre't option: !%e Capital Asset 9ri'in- Model M&M 9roposition 1 M&M 9roposition 11 !%e *a$ of @ne 9ri'e Question # 11 of 15 ( Start time: 0;:33:41 AM !otal Mar"s: 1 .%i'% of t%e follo$in- 'ould 7@! (e defined as t%e 'apital stru'ture of t%e Compan#0 Sele't 'orre't option: !%e firmGs mi2 of Assets and lia(ilities !%e firmGs 'ommon sto'"s onl# !%e firmGs de(t6e,uit# ratio All of t%e -iven options Question # 12 of 15 ( Start time: 0;:34:03 AM !otal Mar"s: 1 Composed & Solved

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A''ordin- to t%e Capital Asset 9ri'in- Model (CA9M / a $ell6diversified portfolioGs rate of return is a fun'tion of $%i'% of t%e follo$in-: Sele't 'orre't option: :ni,ue ris" 8einvestment ris" Mar"et ris" :ns#stemati' ris" Question # 13 of 15 ( Start time: 0;:34:23 AM !otal Mar"s: 1 1f ris" and return 'om(ination of an# sto'" is a(ove t%e SM*/ $%at does it mean0 Sele't 'orre't option: 1t is offerin- lo$er rate of return as 'ompared to t%e effi'ient sto'" 1t is offerin- %i-%er rate of return as 'ompared to t%e effi'ient sto'" 1ts rate of return is Jero as 'ompared to t%e effi'ient sto'" 1t is offerin- rate of return e,ual to t%e effi'ient sto'" Question # 14 of 15 ( Start time: 0;:34:50 AM !otal Mar"s: 1 .%# 'ommon sto'" of a 'ompan# must provide a %i-%er e2pe'ted return t%an t%e de(t of t%e same 'ompan#0 Sele't 'orre't option: !%ere is less demand for sto'" t%an for (onds !%ere is -reater demand for sto'" t%an for (onds !%ere is more s#stemati' ris" involved for t%e 'ommon sto'" !%ere is a mar"et premium re,uired for (onds Question # 15 of 15 ( Start time: 0;:35:11 AM !otal Mar"s: 1 .%at is t%e present value of 8s)1/000 to (e paid at t%e end of 5 #ears if t%e 'orre't ris" ad=usted interest rate is 8M0 Sele't 'orre't option: 8s)514 8s)1/4;2 8s)322);9 8s)401)98 Question # 1 of 15 ( Start time: 0;:41:50 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e e2pe'ted 'as% dividend t%at is normall# paid to s%are%olders0 Composed & Solved

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Sele't 'orre't option: Sto'" split Sto'" dividend +2tra dividend 8e-ular dividend Question # 2 of 15 ( Start time: 0;:41:58 AM !otal Mar"s: 1 .%i'% of t%e follo$in- allo$s to -rap%i'all# depi'tin- t%e timin- of t%e 'as% flo$s as $ell as t%eir nature as eit%er inflo$s or outflo$s0 Sele't 'orre't option: Cas% flo$ dia-ram Cas% (ud-et Cas% flo$ statement 7one of t%e -iven options Question # 3 of 15 ( Start time: 0;:42:0; AM !otal Mar"s: 1 .%at is t%e present value of 8s) 3/500/000 to (e paid at t%e end of 50 #ears if t%e 'orre't ris" ad=usted interest rate is 18M0 Sele't 'orre't option: 8s)105/000 8s)1/500/000 8s)3955/000 8s) 350/000 Question # 4 of 15 ( Start time: 0;:42:12 AM !otal Mar"s: 1 .%at is t%e differen'e (et$een e'onomi' profit and a''ountin- profit0 Sele't 'orre't option: +'onomi' profit in'ludes a '%ar-e for all providers of 'apital $%ile a''ountin- profit in'ludes onl# a '%ar-e for de(t +'onomi' profit 'overs t%e profit over t%e life of t%e firm/ $%ile a''ountin- profit onl# 'overs t%e most re'ent a''ountin- period A''ountin- profit is (ased on 'urrent a''epted a''ountin- rules $%ile e'onomi' profit is (ased on 'as% flo$s All of t%e -iven options are 'orre't Question # 5 of 15 ( Start time: 0;:42:20 AM !otal Mar"s: 1 Composed & Solved

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.it% 'ontinuous 'ompoundin- at 8 per'ent for 20 #ears/ $%at is t%e appro2imate future value of a 8s) 20/000 initial investment0 Sele't 'orre't option: 8s)52/000 8s)93/219 8s)99/0;1 8s)915/240 Question # ; of 15 ( Start time: 0;:42:2; AM !otal Mar"s: 1 !%e $ei-%ted avera-e of possi(le returns/ $it% t%e $ei-%ts (ein- t%e pro(a(ilities of o''urren'e is referred to as &&&&&&&&&&) Sele't 'orre't option: 9ro(a(ilit# distri(ution +2pe'ted return Standard deviation Coeffi'ient of variation Question # 5 of 15 ( Start time: 0;:42:42 AM !otal Mar"s: 1 .%en ta2es are 'onsidered/ t%e value of a levered firm e,uals t%e value of t%e&&&&&&&&) Sele't 'orre't option: :nlevered firm :nlevered firm plus t%e value of t%e de(t :nlevered firm plus t%e present value of t%e ta2 s%ield :nlevered firm plus t%e value of t%e de(t plus t%e value of t%e ta2 s%ield Question # 8 of 15 ( Start time: 0;:42:48 AM !otal Mar"s: 1 1f $e invest in man# se'urities $%i'% are &&&&&&&&to ea'% ot%er t%en it is possi(le to redu'e overall ris" for #our investment) Sele't 'orre't option: Compara(le Correlated Ii-%l# 'orrelated 7e-ativel# 'orrelated Question # 9 of 15 ( Start time: 0;:43:4; AM !otal Mar"s: 1 .%i'% of t%e follo$in-s e2pressed t%e proposition t%at t%e 'ost of e,uit# is a positive linear fun'tion of 'apital stru'ture0 Composed & Solved

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Sele't 'orre't option: !%e Capital Asset 9ri'in- Model M&M 9roposition 1 M&M 9roposition 11 !%e *a$ of @ne 9ri'e Question # 10 of 15 ( Start time: 0;:44:04 AM !otal Mar"s: 1 An ar(itra-e opportunit# e2ists if an investor 'an 'onstru't a &&&&&&&&&& investment portfolio t%at $ill #ield a sure profit) Sele't 'orre't option: 9ositive 7e-ative Rero All of t%e a(ove Question # 11 of 15 ( Start time: 0;:44:14 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is related to t%e use *o$er finan'ial levera-e0 Sele't 'orre't option: >i2ed 'osts Caria(le 'osts Fe(t finan'inCommon e,uit# finan'inQuestion # 12 of 15 ( Start time: 0;:44:22 AM !otal Mar"s: 1 .%i'% statement is 7@! true re-ardin- t%e mar"et portfolio0 Sele't 'orre't option: 1t in'ludes all pu(li'l# traded finan'ial assets 1t is t%e tan-en'# point (et$een t%e 'apital mar"et line and t%e indifferen'e 'urve All se'urities in t%e mar"et portfolio are %eld in proportion to t%eir mar"et values 1t lies on t%e effi'ient frontier Question # 13 of 15 ( Start time: 0;:44:32 AM !otal Mar"s: 1 .%i'% of t%e follo$in- in'ludes t%e plannin-/ dire'tin-/ monitorin-/ or-aniJin-/ and 'ontrollin- of t%e monetar# resour'es of an or-aniJation0 Sele't 'orre't option: >inan'ial a''ountin- Composed & Solved

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>inan'ial mana-ement >inan'ial en-ineerin>inan'ial (ud-etinQuestion # 14 of 15 ( Start time: 0;:44:41 AM !otal Mar"s: 1 !%e Fu9ont Approa'% (rea"s do$n t%e earnin- po$er on s%are%oldersG (oo" value (8@+ as follo$s: 8@+ N &&&&&&&&&&) Sele't 'orre't option: 7et profit mar-in X !otal asset turnover X +,uit# multiplier !otal asset turnover X Kross profit mar-in X Fe(t ratio !otal asset turnover X 7et profit mar-in !otal asset turnover X Kross profit mar-in X +,uit# multiplier Question # 15 of 15 ( Start time: 0;:44:49 AM !otal Mar"s: 1 .%ere t%e effi'ient sto'" 'om(ination of ris" and return in effi'ient mar"et s%ould lie0 Sele't 'orre't option: @n t%e SM* ?elo$ t%e SM* A(ove t%e SM* 1t ma# lie an#$%ere for effi'ient 'om(ination Question # 1 of 15 ( Start time: 0;:5;:08 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! t%e t#pe of I#(rid or-aniJations0 Sele't 'orre't option: S6!#pe Corporation *imited *ia(ilit# 9artners%ip Sole 9roprietors%ip 9rofessional Corporation Question # 2 of 15 ( Start time: 0;:5;:18 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 'orre't/ if a firm %as a re,uired rate of return e,ual to t%e 8@+0 Sele't 'orre't option: !%e firm 'an in'rease mar"et pri'e and 9A+ (# retainin- more earnin-s) !%e firm 'an in'rease mar"et pri'e and 9A+ (# in'reasin- t%e -ro$t% rate) !%e amount of earnin-s retained (# t%e firm does not affe't mar"et pri'e or t%e 9A+) 7one of t%e -iven options Composed & Solved

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Question # 3 of 15 ( Start time: 0;:55:13 AM !otal Mar"s: 1 1n $%i'% of t%e follo$in- approa'% #ou need to (rin- all t%e pro=e'ts to t%e same len-t% in time0 Sele't 'orre't option: M188 approa'% Koin- 'on'ern approa'% Common life approa'% +,uivalent annual approa'% Question # 4 of 15 ( Start time: 0;:55:21 AM !otal Mar"s: 1 Io$ e'onomi' value is added (+CA 'al'ulated0 Sele't 'orre't option: 1t is t%e differen'e (et$een t%e mar"et value of t%e firm and t%e (oo" value of e,uit# 1t is t%e firmGs net operatin- profit after ta2 (7@9A! less a dollar 'ost of 'apital '%ar-e 1t is t%e net in'ome of t%e firm less a dollar 'ost t%at e,uals .AAC multiplied (# t%e (oo" value of lia(ilities and e,uities 7one of t%e -iven option Question # 5 of 15 ( Start time: 0;:55:32 AM !otal Mar"s: 1 All of t%e follo$in- are t%e finan'ial statements used for t%e purpose of reportin- and anal#sis +VC+9!: Sele't 'orre't option: ?alan'e S%eet 1n'ome Statement Cas% (ud-et Statement of 8etained +arnin-s Question # ; of 15 ( Start time: 0;:55:40 AM !otal Mar"s: 1 .%i'% of t%e follo$in- refers to a %i-%l# 'ompetitive mar"et $%ere -ood (usiness ideas are ta"en up immediatel#0 Sele't 'orre't option: Capital mar"et +ffi'ient mar"et Mone# mar"et 8eal asset mar"et Composed & Solved

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Question # 5 of 15 ( Start time: 0;:58:35 AM !otal Mar"s: 1 As interest rates -o up/ t%e present value of a stream of fi2ed 'as% flo$s &&&&&) Sele't 'orre't option: Koes do$n Koes up Sta#s t%e same Can not (e found from t%e -iven information Question # 8 of 15 ( Start time: 0;:58:58 AM !otal Mar"s: 1 .%i'% statement is 7@! true re-ardin- t%e mar"et portfolio0 Sele't 'orre't option: 1t in'ludes all pu(li'l# traded finan'ial assets 1t is t%e tan-en'# point (et$een t%e 'apital mar"et line and t%e indifferen'e 'urve All se'urities in t%e mar"et portfolio are %eld in proportion to t%eir mar"et values 1t lies on t%e effi'ient frontier Question # 9 of 15 ( Start time: 0;:59:0; AM !otal Mar"s: 1 .%at is t%e traditional approa'% to$ards t%e valuation of a 'ompan#0 Sele't 'orre't option: !%e 'ost of 'apital is independent of t%e 'apital stru'ture of t%e firm !%e firm maintains 'onstant ris" re-ardless of t%e t#pe of finan'in- emplo#ed !%ere e2ists no optimal 'apital stru'ture !%at mana-ement 'an in'rease t%e total value of t%e firm t%rou-% t%e =udi'ious use of finan'ial levera-e Question # 10 of 15 ( Start time: 0;:59:25 AM !otal Mar"s: 1 1f $e $ere to in'rease A?C 'ompan# 'ost of e,uit# assumption/ $%at $ould $e e2pe't to %appen to t%e present value of all future 'as% flo$s0 Sele't 'orre't option: An in'rease A de'rease 7o '%an-e 1n'omplete information Question # 11 of 15 ( Start time: 0;:59:45 AM !otal Mar"s: 1 A''ordin- to &&&&&&&&&&&/ t%e firmGs 'ost of e,uit# in'reases $it% -reater de(t finan'in-/ (ut t%e .ACC remains un'%an-ed) Composed & Solved

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Sele't 'orre't option: M&M 9roposition 1 $it% ta2es M&M 9roposition 1 $it%out ta2es M&M 9roposition 11 $it%out ta2es M&M 9roposition 11 $it% ta2es Question # 12 of 15 ( Start time: 05:00:24 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! an e2ample of %#(rid e,uit# Sele't 'orre't option: Converti(le ?onds Converti(le Fe(enture Common s%ares 9referred s%ares Question # 13 of 15 ( Start time: 05:00:33 AM !otal Mar"s: 1 1f t%e pro(a(ilit# is $ritten on Y6a2is and t%e rate of return is mentioned on t%e V6a2is/ .%i'% "ind of relations%ip it s%o$s $%en t%ere is %i-%er t%e standard deviation t%e %i-%er t%e ris") Sele't 'orre't option: 1ndire't relations%ip 1nverse relations%ip Fire't relations%ip 7o relations%ip Question # 14 of 15 ( Start time: 05:00:50 AM !otal Mar"s: 1 .%en ta2es are 'onsidered/ t%e value of a levered firm e,uals t%e value of t%e&&&&&&&&) Sele't 'orre't option: :nlevered firm :nlevered firm plus t%e value of t%e de(t :nlevered firm plus t%e present value of t%e ta2 s%ield :nlevered firm plus t%e value of t%e de(t plus t%e value of t%e ta2 s%ield Question # 15 of 15 ( Start time: 05:00:59 AM !otal Mar"s: 1 .%at $ould (e t%e result $%en t%ere is an in'rease in t%e num(er of s%ares outstandin- (# redu'in- t%e par value of sto'"0 Sele't 'orre't option: Composed & Solved

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Sto'" split Sto'" dividend +2tra dividend 8e-ular dividend Question # 1 of 15 ( Start time: 05:11:14 AM !otal Mar"s: 1 An annuit# due is al$a#s $ort% &&&&& a 'ompara(le annuit#) Sele't 'orre't option: *ess t%an More t%an +,ual to Can not (e found from t%e -iven information Question # 2 of 15 ( Start time: 05:11:35 AM !otal Mar"s: 1 .%i'% of t%e follo$in- formulas represents a 'orre't 'al'ulation of t%e de-ree of operatinlevera-e0 Sele't 'orre't option: (Q 6 Q?+ AQ (+?1! A (+?1! 6 >C BQ(96C D >CE ABQ(96C E Q(96C A BQ(96C 6 >CE Question # 3 of 15 ( Start time: 05:11:42 AM !otal Mar"s: 1 !%e $ei-%ted avera-e of possi(le returns/ $it% t%e $ei-%ts (ein- t%e pro(a(ilities of o''urren'e is referred to as &&&&&&&&&&) Sele't 'orre't option: 9ro(a(ilit# distri(ution +2pe'ted return Standard deviation Coeffi'ient of variation Question # 4 of 15 ( Start time: 05:12:01 AM !otal Mar"s: 1 .%i'% statement is 7@! true re-ardin- t%e mar"et portfolio0 Sele't 'orre't option: 1t in'ludes all pu(li'l# traded finan'ial assets 1t is t%e tan-en'# point (et$een t%e 'apital mar"et line and t%e indifferen'e 'urve All se'urities in t%e mar"et portfolio are %eld in proportion to t%eir mar"et values Composed & Solved

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1t lies on t%e effi'ient frontier Question # 5 of 15 ( Start time: 05:12:10 AM !otal Mar"s: 1 .%i'% of t%e follo$in-s are t%e propositions of Modi-liani and MillerGs0 Sele't 'orre't option: !%e mar"et value of a firmGs 'ommon sto'" is independent of its 'apital stru'ture !%e mar"et value of a firmGs de(t is independent of its 'apital stru'ture !%e mar"et value of an# firm is independent of its 'apital stru'ture 7one of t%e -iven options Question # ; of 15 ( Start time: 05:12:33 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is simpl# t%e $ei-%ted avera-e of t%e possi(le returns/ $it% t%e $ei-%ts (ein- t%e pro(a(ilities of o''urren'e0 Sele't 'orre't option: 9ro(a(ilit# distri(ution +2pe'ted return Standard deviation Coeffi'ient of variation Question # 5 of 15 ( Start time: 05:13:35 AM !otal Mar"s: 1 .%at is a le-al a-reement/ also 'alled t%e deed of trust/ (et$een t%e 'orporation issuin(onds and t%e (ond%olders t%at esta(lis% t%e terms of t%e (ond issue0 Sele't 'orre't option: 1ndenture Fe(enture ?ond ?ond trustee Question # 8 of 15 ( Start time: 05:13:42 AM !otal Mar"s: 1 All of t%e follo$in- are t%e finan'ial statements used for t%e purpose of reportin- and anal#sis +VC+9!: Sele't 'orre't option: ?alan'e S%eet 1n'ome Statement Cas% (ud-et Statement of 8etained +arnin-s Composed & Solved

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Question # 9 of 15 ( Start time: 05:13:50 AM !otal Mar"s: 1 A set of possi(le values t%at a random varia(le 'an assume and t%eir asso'iated pro(a(ilities of o''urren'e are referred to as &&&&&&&&&&) Sele't 'orre't option: 9ro(a(ilit# distri(ution !%e e2pe'ted return !%e standard deviation Coeffi'ient of variation Question # 10 of 15 ( Start time: 05:14:10 AM !otal Mar"s: 1 .%i'% of t%e follo$in- statements (in -eneral is 'orre't0 Sele't 'orre't option: A lo$ re'eiva(les turnover is desira(le !%e lo$er t%e total de(t6to6e,uit# ratio/ t%e lo$er t%e finan'ial ris" for a firm An in'rease in net profit mar-in $it% no '%an-e in sales or assets means a $ea"er 8@1 !%e %i-%er t%e ta2 rate for a firm/ t%e lo$er t%e interest 'overa-e ratio Question # 11 of 15 ( Start time: 05:14:15 AM !otal Mar"s: 1 .%i'% of t%e follo$in- formula relates (eta of t%e sto'" to t%e standard deviation0 Sele't 'orre't option: Covarian'e of sto'" $it% mar"et Q varian'e of t%e mar"et Covarian'e of sto'" $it% mar"et A varian'e of t%e mar"et Carian'e of t%e mar"et A Covarian'e of sto'" $it% mar"et Slope of t%e re-ression line Question # 12 of 15 ( Start time: 05:14:25 AM !otal Mar"s: 1 1n t%e dividend dis'ount model/ &&&&&&& $%i'% of t%e follo$in- are not in'orporated into t%e dis'ount rate0 Sele't 'orre't option: 8eal ris"6free rate 8is" premium for sto'"s 8eturn on assets +2pe'ted inflation rate Question # 13 of 15 ( Start time: 05:14:35 AM !otal Mar"s: 1 !%e overall ($ei-%ted avera-e 'ost of 'apital is 'omposed of $ei-%ted avera-es of $%i'% of t%e follo$in-0 Composed & Solved

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Sele't 'orre't option: !%e 'ost of 'ommon e,uit# and t%e 'ost of de(t !%e 'ost of 'ommon e,uit# and t%e 'ost of preferred sto'" !%e 'ost of preferred sto'" and t%e 'ost of de(t !%e 'ost of 'ommon e,uit#/ t%e 'ost of preferred sto'"/ and t%e 'ost of de(t Question # 14 of 15 ( Start time: 05:15:02 AM !otal Mar"s: 1 .%i'% -roup of ratios s%o$s t%e e2tent to $%i'% t%e firm is finan'ed $it% de(t0 Sele't 'orre't option: *i,uidit# ratios Fe(t ratios Covera-e ratios 9rofita(ilit# ratios Question # 15 of 15 ( Start time: 05:15:24 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! an e2ample of a finan'ial intermediar#0 Sele't 'orre't option: .is'onsin S&*/ a savin-s and loan asso'iation Stron- Capital Appre'iation/ a mutual fund Mi'rosoft Corporation/ a soft$are firm Colle-e Credit/ a 'redit union Question # 1 of 15 ( Start time: 05:20:55 AM !otal Mar"s: 1 A 'apital (ud-etin- te'%ni,ue t%rou-% $%i'% dis'ount rate e,uates t%e present value of t%e future net 'as% flo$s from an investment pro=e't $it% t%e pro=e'tHs initial 'as% outflo$ is "no$n as: Sele't 'orre't option: 9a#(a'" period 1nternal rate of return 7et present value 9rofita(ilit# inde2 Question # 2 of 15 ( Start time: 05:21:24 AM !otal Mar"s: 1 A''ordin- to t%e Capital Asset 9ri'in- Model (CA9M / a $ell6diversified portfolioGs rate of return is a fun'tion of $%i'% of t%e follo$in-: Sele't 'orre't option: Composed & Solved

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:ni,ue ris" 8einvestment ris" Mar"et ris" :ns#stemati' ris" Question # 3 of 15 ( Start time: 05:21:44 AM !otal Mar"s: 1 .%at is t%e e2pe'ted return of a Jero6(eta se'urit#0 Sele't 'orre't option: !%e ris"6free rate Rero rate of return A ne-ative rate of return !%e mar"et rate of return Question # 4 of 15 ( Start time: 05:21:52 AM !otal Mar"s: 1 .%at is t%e differen'e (et$een e'onomi' profit and a''ountin- profit0 Sele't 'orre't option: +'onomi' profit in'ludes a '%ar-e for all providers of 'apital $%ile a''ountin- profit in'ludes onl# a '%ar-e for de(t +'onomi' profit 'overs t%e profit over t%e life of t%e firm/ $%ile a''ountin- profit onl# 'overs t%e most re'ent a''ountin- period A''ountin- profit is (ased on 'urrent a''epted a''ountin- rules $%ile e'onomi' profit is (ased on 'as% flo$s All of t%e -iven options are 'orre't Question # 5 of 15 ( Start time: 05:21:59 AM !otal Mar"s: 1 1nvestors ma# (e $illin- to pa# a premium for sta(le dividends (e'ause of t%e informational 'ontent of &&&&&&&&&&/ t%e desire of investors for &&&&&&&&&&/ and 'ertain &&&&&&&&&&) Sele't 'orre't option: 1nstitutional 'onsiderations< dividends< 'urrent in'ome Fividends< 'urrent in'ome< institutional 'onsiderations Current in'ome< dividends< institutional 'onsiderations 1nstitutional 'onsiderations< 'urrent in'ome< dividends Question # ; of 15 ( Start time: 05:22:08 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e e2pe'ted 'as% dividend t%at is normall# paid to s%are%olders0 Sele't 'orre't option: Composed & Solved

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Sto'" split Sto'" dividend +2tra dividend 8e-ular dividend Question # 5 of 15 ( Start time: 05:22:15 AM !otal Mar"s: 1 >or most firms/ 9A+ ratios and ris"&&&&&&&&&) Sele't 'orre't option: .ill (e dire'tl# related .ill %ave an inverse relations%ip .ill (e unrelated 7one of t%e a(ove) Question # 8 of 15 ( Start time: 05:22:25 AM !otal Mar"s: 1 .%ere t%e effi'ient sto'" 'om(ination of ris" and return in effi'ient mar"et s%ould lie0 Sele't 'orre't option: @n t%e SM* ?elo$ t%e SM* A(ove t%e SM* 1t ma# lie an#$%ere for effi'ient 'om(ination Question # 9 of 15 ( Start time: 05:22:34 AM !otal Mar"s: 1 .%i'% -roup of ratios s%o$s t%e e2tent to $%i'% t%e firm is finan'ed $it% de(t0 Sele't 'orre't option: *i,uidit# ratios Fe(t ratios Covera-e ratios 9rofita(ilit# ratios Question # 10 of 15 ( Start time: 05:22:58 AM !otal Mar"s: 1 A''ordin- to MM 11/ $%at %appens $%en a firmGs de(t6to6e,uit# ratio in'reases0 Sele't 'orre't option: 1ts finan'ial ris" in'reases 1ts operatin- ris" in'reases !%e e2pe'ted return on e,uit# in'reases !%e e2pe'ted return on e,uit# de'reases Composed & Solved

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Question # 11 of 15 ( Start time: 05:23:18 AM !otal Mar"s: 1 .%# mar"ets and mar"et returns flu'tuate0 Sele't 'orre't option: ?e'ause of politi'al fa'tors ?e'ause of so'ial fa'tors ?e'ause of so'io6politi'al fa'tors ?e'ause of ma'ro s#stemati' fa'tors Question # 12 of 15 ( Start time: 05:23:2; AM !otal Mar"s: 1 .%i'% of t%e follo$in- formulas represents a 'orre't 'al'ulation of t%e de-ree of operatinlevera-e0 Sele't 'orre't option: (Q 6 Q?+ AQ (+?1! A (+?1! 6 >C BQ(96C D >CE ABQ(96C E Q(96C A BQ(96C 6 >CE Question # 13 of 15 ( Start time: 05:23:34 AM !otal Mar"s: 1 .%i'% of t%e follo$in-s e2pressed t%e proposition t%at t%e 'ost of e,uit# is a positive linear fun'tion of 'apital stru'ture0 Sele't 'orre't option: !%e Capital Asset 9ri'in- Model M&M 9roposition 1 M&M 9roposition 11 !%e *a$ of @ne 9ri'e Question # 14 of 15 ( Start time: 05:23:52 AM !otal Mar"s: 1 An 86#ear annuit# due %as a present value of 8s)1/000) 1f t%e interest rate is 5 per'ent/ t%e amount of ea'% annuit# pa#ment is 'losest to $%i'% of t%e follo$in-0 Sele't 'orre't option: 8s)154)53 8s)145)3; 8s)109)39 8s)104)52 Question # 15 of 15 ( Start time: 05:24:45 AM !otal Mar"s: 1 Composed & Solved

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.%en ta2es are 'onsidered/ t%e value of a levered firm e,uals t%e value of t%e&&&&&&&&) Sele't 'orre't option: :nlevered firm :nlevered firm plus t%e value of t%e de(t :nlevered firm plus t%e present value of t%e ta2 s%ield :nlevered firm plus t%e value of t%e de(t plus t%e value of t%e ta2 s%ield Question # 1 of 15 ( Start time: 05:34:43 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e main o(=e'tive of Z+'onomi'sH0 Sele't 'orre't option: 9rofit ma2imiJation Ma2imiJation of s%are%olders $ealt% Colle'tion of a''urate/ s#stemati'/ and timel# finan'ial data All of t%e -iven options Question # 2 of 15 ( Start time: 05:34:51 AM !otal Mar"s: 1 Mar"et ris" is measured in terms of t%e &&&&&&&&&&& of t%e mar"et portfolio or inde2) Sele't 'orre't option: Carian'e Covarian'e Standard deviation Correlation 'oeffi'ient Question # 3 of 15 ( Start time: 05:35:10 AM !otal Mar"s: 1 .%# $e need Capital rationin-0 ( Sele't 'orre't option: ?e'ause/ t%ere are not enou-% positive 79C pro=e'ts ?e'ause/ 'ompanies do not al$a#s %ave a''ess to all of t%e funds t%e# 'ould ma"e use of ?e'ause/ mana-ers find it diffi'ult to de'ide %o$ to fund pro=e'ts ?e'ause/ (an"s re,uire ver# %i-% returns on pro=e'ts Question # 4 of 15 ( Start time: 05:35:34 AM !otal Mar"s: 1 1f ris" and return 'om(ination of an# sto'" is a(ove t%e SM*/ $%at does it mean0 Sele't 'orre't option: 1t is offerin- lo$er rate of return as 'ompared to t%e effi'ient sto'" 1t is offerin- %i-%er rate of return as 'ompared to t%e effi'ient sto'" Composed & Solved

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1ts rate of return is Jero as 'ompared to t%e effi'ient sto'" 1t is offerin- rate of return e,ual to t%e effi'ient sto'" Question # 5 of 15 ( Start time: 05:35:5; AM !otal Mar"s: 1 Io$ e'onomi' value is added (+CA 'al'ulated0 Sele't 'orre't option: 1t is t%e differen'e (et$een t%e mar"et value of t%e firm and t%e (oo" value of e,uit# 1t is t%e firmGs net operatin- profit after ta2 (7@9A! less a dollar 'ost of 'apital '%ar-e 1t is t%e net in'ome of t%e firm less a dollar 'ost t%at e,uals .AAC multiplied (# t%e (oo" value of lia(ilities and e,uities 7one of t%e -iven option Question # ; of 15 ( Start time: 05:3;:05 AM !otal Mar"s: 1 1f all t%in-s e,ual/ $%en diversifi'ation is most effe'tive0 Sele't 'orre't option: Se'uritiesG returns are positivel# 'orrelated Se'uritiesG returns are un'orrelated Se'uritiesG returns are %i-% Se'uritiesG returns are ne-ativel# 'orrelated Question # 5 of 15 ( Start time: 05:3;:12 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! t%e step of 9er'enta-e of sales to (e used in >inan'ial >ore'astin-0 Sele't 'orre't option: +stimate #ear6(#6#ear Sales 8evenue and +2penses +stimate *evels of 1nvestment 7eeds re,uired to Meet +stimated Sales +stimate t%e >inan'in- 7eeds +stimate t%e retained earnin-s Question # 8 of 15 ( Start time: 05:3;:21 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e 'as% re,uired durin- a spe'ifi' period to meet interest e2penses and prin'ipal pa#ments0 Sele't 'orre't option: Fe(t 'apa'it# Fe(t6servi'e (urden Ade,ua'# 'apa'it# >i2ed6'%ar-e (urden Composed & Solved

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Question # 9 of 15 ( Start time: 05:3;:29 AM !otal Mar"s: 1 C%oose amon- t%e follo$in-s/ t%e 'orre't statement re-ardin- ever# =ournal entr#) Sele't 'orre't option: Sum of Fe(its N Sum of Credits Sum of Fe(its OSum of Credits Sum of Fe(its P Sum of Credits 7one of t%e -iven options Question # 10 of 15 ( Start time: 05:3;:3; AM !otal Mar"s: 1 .%i'% of t%e follo$in- is an e2ample of restru'turin- t%e firm0 Sele't 'orre't option: Fividends are in'reased from 8s)1 to 8s)2 per s%are A ne$ investment in'reases t%e firmGs (usiness ris" 7e$ e,uit# is issued and t%e pro'eeds repa# de(t A ne$ ?oard of Fire'tors is ele'ted to t%e firm Question # 11 of 15 ( Start time: 05:3;:58 AM !otal Mar"s: 1 !%e 8?S pa#s 5);0M/ 'ompounded dail# ((ased on 3;0 da#s / on a 96mont% 'ertifi'ate of deposit/ if #ou deposit 8s)20/ 000 #ou $ould e2pe't to earn around &&&&&&&&&& in interest) Sele't 'orre't option: 8s)840 8s)858 8s)1/032 8s)1/121 Question # 12 of 15 ( Start time: 05:35:05 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e ma2imum amount of de(t (and ot%er fi2ed6'%ar-e finan'int%at a firm 'an ade,uatel# servi'e0 Sele't 'orre't option: Fe(t 'apa'it# Fe(t6servi'e (urden Ade,ua'# 'apa'it# >i2ed6'%ar-e (urden Question # 13 of 15 ( Start time: 05:35:12 AM !otal Mar"s: 1 Composed Solved

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:pon $%i'% of t%e follo$in- a firmGs de-ree of operatin- levera-e (F@* depends primaril#0 Sele't 'orre't option: Sales varia(ilit# *evel of fi2ed operatin- 'osts Closeness to its operatin- (rea"6even point Fe(t6to6e,uit# ratio Question # 14 of 15 ( Start time: 05:35:19 AM !otal Mar"s: 1 :pon $%i'% of t%e follo$in- a firmGs de-ree of operatin- levera-e (F@* depends primaril#0 Sele't 'orre't option: Sales varia(ilit# *evel of fi2ed operatin- 'osts Closeness to its operatin- (rea"6even point Fe(t6to6e,uit# ratio Question # 15 of 15 ( Start time: 05:35:43 AM !otal Mar"s: 1 .%i'% statement is 7@! true re-ardin- t%e mar"et portfolio0 Sele't 'orre't option: 1t in'ludes all pu(li'l# traded finan'ial assets 1t is t%e tan-en'# point (et$een t%e 'apital mar"et line and t%e indifferen'e 'urve All se'urities in t%e mar"et portfolio are %eld in proportion to t%eir mar"et values 1t lies on t%e effi'ient frontier