FIN 3120 Bloomberg questions And Answers 2022

Why do companies do IPOs - Answer- IPOs incentivize entrepreneurs to innovate as IPOs provide a way for entrepreneurs to monetize their work Why do company manager-owners smile when they ring the stock exchange bell at their IPO - Answer- An IPO crystalizes the value of the manager-owners stake What is the prime reason that Jennys discretionary income is more volatile than her salary - Answer- Her mortgage payments and necessities are fixed A wedding planning company has a high fixed cost base and a lot of debt. Who would you rather be? a) a shareholder in a booming economy b) a shareholder in a stagnant economy c) a bond holder in a booming economy d) a bond holder in a stagnant economy - Answer- a) a shareholder in a booming economy Why are equities so volatile - Answer- Due to the residual nature of earnings which of the following statements is true? a) when you buy an equity, your potential loss is unlimited and your maximum potential gain is 100% b) when you buy an equity, your potential loss is 100% and your maximum potential gain is unlimited c)when you buy an equity, you are promised a stream of fixed dividends - Answer- b) when you buy an equity, your potential loss is 100% and your maximum potential gain is unlimited What does the release of earnings announcements have in common with the release of economic indicators? a) Both are typically released on a quarterly basis. b) both are typically published by corporations