FIN 305 WEEK 7 FINAL PART A FINAL TEST
2026 QUESTIONS WITH CORRECT
ANSWERS GRADED A+
◍ Ellcrys Corporation writes 70 checks a day for an average amount of $533
each. These checks generally clear the bank 3.5 days after they are written.
In addition, the firm generally receives 67 checks with an average amount of
$616 each. Deposited amounts are available after an average of 3 days. Is
this a disbursement or collection float? What is the value of the
float?Multiple ChoiceA disbursement float of $8,564A collection float of
$8,564A disbursement float of $4,622A disbursement float of $6,769A
collection float of $6,769.
Answer: A disbursement float of $6,769
◍ What is compound interest?.
Answer: Interest on interest
◍ Which of these is a speculative motive for holding cash?Multiple
ChoicePaying a $100 bonus to all employees at year-endPaying the annual
insurance premium on the firm's assetsNeeding to purchase a new delivery
truck because the old one was totally destroyed in an accidentBuying extra
inventory because a key supplier offered a special one-time
discountContributing $1,000 to help fund medical care for an uninsured
neighbor.
Answer: Buying extra inventory because a key supplier offered a special
one-time discount
◍ Standard deviation measures _____________blank risk while beta measures
_____________blank risk.Multiple Choicetotal; systematicsystematic;
unsystematicunsystematic; systematicasset-specific; markettotal;
unsystematic.
, Answer: total; systematic
◍ You purchased 1,050 shares of Barrett Golf Corporation stock at a price of
$36.45 per share. While you owned the stock, you received dividends
totaling $.53 per share. Today, you sold your stock at a price of $39.40 per
share. What was your total dollar return on the investment?Multiple
Choice$3,098$2,943$3,654$3,515$3,376.
Answer: $3,654
◍ What is the formula for the future value of an ordinary annuity?.
Answer: FVA = PMT x [ (1 + i) ^n - 1] / i
◍ Your German friend has decided to come visit you in the
U. S. You estimate the cost of her trip will be $3,600. What is the cost of her
trip in euros if the
U. S. dollar equivalent of the euro is 1.1434?Multiple
Choice€4,116.24€3,257.07€3,148.50€2,982.79€3,858.12.
Answer: €3,148.50
◍ Currently, you can purchase either 127 Canadian dollars or 11,750 Japanese
yen per $100. What is the yen/Canadian dollar cross-rate?Multiple
Choice¥.0108/perCan$¥92.5197/perCan$¥.0100/perCan$¥97.6597/perCan$¥.0135/p
Answer: ¥92.5197/perCan$
◍ The stock of Big Joe's has a beta of 1.44 and an expected return of 12.30
percent. The risk-free rate of return is 4.8 percent. What is the expected
return on the market?Multiple Choice5.39%10.01%14.41%8.57%7.50%.
Answer: 10.01
◍ Which of the following is an example of a capital structure?1. 15 percent
current assets and 85 percent fixed assets2. 10 percent current liabilities and
90 percent long-term debt3. 20 percent debt and 80 percent equity4. None of
these.
Answer: 3. 20 percent debt and 80 percent equity
◍ A 4.5 percent corporate coupon bond is callable in five years for a call
premium of one year of coupon payments. Assuming a par value of $1,000,
, what is the price paid to the bondholder if the issuer calls the bond?.
Answer: $1045principal + call premium $1000 + ($1000 x 4.5%)
◍ Which one of the following is the best example of unsystematic
risk?Multiple ChoiceDecrease in the value of the dollarIncrease in consumer
spendingA warehouse fireDecrease in corporate tax ratesInflation exceeding
market expectations.
Answer: a warehouse fire
◍ Which of the following statements is incorrect?1. Sole proprietorships are
subject to less regulation.2. Both angel investors and venture capitalists
exchange capital for ownership.3. Shareholders are responsible for paying
off the corporate bonds in the event of a bankruptcy4. All of these
statements are correct.
Answer: 3. Shareholders are responsible for paying off the corporate bonds
in the event of a bankruptcy
◍ How do you calculate a TIPS Bond?.
Answer: Current CPI / Past CPI) x IR
◍ You have $14,600 to invest and would like to create a portfolio with an
expected return of 10 percent. You can invest in Stock K with an expected
return of 8.6 percent and Stock L with an expected return of 12.2 percent.
How much will you invest in Stock K?Multiple
Choice$8,178.70$7,570.37$8,922.22$4,968.06$5,677.78.
Answer: $8,922.22
◍ What are the NPV benchmarks?.
Answer: Accept if NPV > $0Reject if NPV </= $0
◍ You own a $58,600 portfolio comprised of four stocks: A, B, C, and
D. The values of Stocks A, B, and C are $12,100, $17,400, and $20,400,
respectively. What is the portfolio weight of Stock D?Multiple
Choice12.58%12.10%10.33%14.85%16.38%.
Answer: 14.85%
◍ When analysts refer to capital structure, they are referring to what ratio?.
2026 QUESTIONS WITH CORRECT
ANSWERS GRADED A+
◍ Ellcrys Corporation writes 70 checks a day for an average amount of $533
each. These checks generally clear the bank 3.5 days after they are written.
In addition, the firm generally receives 67 checks with an average amount of
$616 each. Deposited amounts are available after an average of 3 days. Is
this a disbursement or collection float? What is the value of the
float?Multiple ChoiceA disbursement float of $8,564A collection float of
$8,564A disbursement float of $4,622A disbursement float of $6,769A
collection float of $6,769.
Answer: A disbursement float of $6,769
◍ What is compound interest?.
Answer: Interest on interest
◍ Which of these is a speculative motive for holding cash?Multiple
ChoicePaying a $100 bonus to all employees at year-endPaying the annual
insurance premium on the firm's assetsNeeding to purchase a new delivery
truck because the old one was totally destroyed in an accidentBuying extra
inventory because a key supplier offered a special one-time
discountContributing $1,000 to help fund medical care for an uninsured
neighbor.
Answer: Buying extra inventory because a key supplier offered a special
one-time discount
◍ Standard deviation measures _____________blank risk while beta measures
_____________blank risk.Multiple Choicetotal; systematicsystematic;
unsystematicunsystematic; systematicasset-specific; markettotal;
unsystematic.
, Answer: total; systematic
◍ You purchased 1,050 shares of Barrett Golf Corporation stock at a price of
$36.45 per share. While you owned the stock, you received dividends
totaling $.53 per share. Today, you sold your stock at a price of $39.40 per
share. What was your total dollar return on the investment?Multiple
Choice$3,098$2,943$3,654$3,515$3,376.
Answer: $3,654
◍ What is the formula for the future value of an ordinary annuity?.
Answer: FVA = PMT x [ (1 + i) ^n - 1] / i
◍ Your German friend has decided to come visit you in the
U. S. You estimate the cost of her trip will be $3,600. What is the cost of her
trip in euros if the
U. S. dollar equivalent of the euro is 1.1434?Multiple
Choice€4,116.24€3,257.07€3,148.50€2,982.79€3,858.12.
Answer: €3,148.50
◍ Currently, you can purchase either 127 Canadian dollars or 11,750 Japanese
yen per $100. What is the yen/Canadian dollar cross-rate?Multiple
Choice¥.0108/perCan$¥92.5197/perCan$¥.0100/perCan$¥97.6597/perCan$¥.0135/p
Answer: ¥92.5197/perCan$
◍ The stock of Big Joe's has a beta of 1.44 and an expected return of 12.30
percent. The risk-free rate of return is 4.8 percent. What is the expected
return on the market?Multiple Choice5.39%10.01%14.41%8.57%7.50%.
Answer: 10.01
◍ Which of the following is an example of a capital structure?1. 15 percent
current assets and 85 percent fixed assets2. 10 percent current liabilities and
90 percent long-term debt3. 20 percent debt and 80 percent equity4. None of
these.
Answer: 3. 20 percent debt and 80 percent equity
◍ A 4.5 percent corporate coupon bond is callable in five years for a call
premium of one year of coupon payments. Assuming a par value of $1,000,
, what is the price paid to the bondholder if the issuer calls the bond?.
Answer: $1045principal + call premium $1000 + ($1000 x 4.5%)
◍ Which one of the following is the best example of unsystematic
risk?Multiple ChoiceDecrease in the value of the dollarIncrease in consumer
spendingA warehouse fireDecrease in corporate tax ratesInflation exceeding
market expectations.
Answer: a warehouse fire
◍ Which of the following statements is incorrect?1. Sole proprietorships are
subject to less regulation.2. Both angel investors and venture capitalists
exchange capital for ownership.3. Shareholders are responsible for paying
off the corporate bonds in the event of a bankruptcy4. All of these
statements are correct.
Answer: 3. Shareholders are responsible for paying off the corporate bonds
in the event of a bankruptcy
◍ How do you calculate a TIPS Bond?.
Answer: Current CPI / Past CPI) x IR
◍ You have $14,600 to invest and would like to create a portfolio with an
expected return of 10 percent. You can invest in Stock K with an expected
return of 8.6 percent and Stock L with an expected return of 12.2 percent.
How much will you invest in Stock K?Multiple
Choice$8,178.70$7,570.37$8,922.22$4,968.06$5,677.78.
Answer: $8,922.22
◍ What are the NPV benchmarks?.
Answer: Accept if NPV > $0Reject if NPV </= $0
◍ You own a $58,600 portfolio comprised of four stocks: A, B, C, and
D. The values of Stocks A, B, and C are $12,100, $17,400, and $20,400,
respectively. What is the portfolio weight of Stock D?Multiple
Choice12.58%12.10%10.33%14.85%16.38%.
Answer: 14.85%
◍ When analysts refer to capital structure, they are referring to what ratio?.
