©EVERLY 2025 ALL RIGHTS RESERVED
BFIN300 Final Exam Questions And
Answers Latest Updated 2025 |100%
Verified.
An underlying assumption of the dividend growth model is that a stock is worth: - Answer✔the
present value of the future income which it generates
The value of common stock today depends on: - Answer✔the expected future dividends, capital
gains, and discount rate.
The constant dividend growth model is: - Answer✔generally not used in practice because most
stocks grow at a non-constant rate.
The slope of an asset's security market line is the: - Answer✔beta coefficient.
Risk that affects a large number of assets, each to a greater or lesser degree, is called: -
Answer✔systematic risk
The standard deviation of a portfolio will tend to increase when: - Answer✔the portfolio
concentration on a single cyclical industry increases
A symmetric, bell-shaped frequency distribution that is completely defined by its mean and
standard deviation is the: - Answer✔normal distribution
1
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The excess return required from a risky asset over that required from a risk-free asset is called
the: - Answer✔risk premium
The risk premium is computed by: - Answer✔subtracting the average return on the US treasury
bill from the average return for the investment
The relationship between nominal rates, real rates, and inflation is known as the -
Answer✔Fisher effect
The percentage of a portfolio's total value invested in a particular asset is called the: -
Answer✔portfolio weight.
The stated interest payment in dollars made on a bond each period is called the bond's -
Answer✔coupon
All else constant, a bond will sell at ____ when the YTM is ___ the coupon rate. - Answer✔a
discount, higher than
Assume you are using the dividend growth model to value stocks. If you expect the market rate
of return to increase across the board on all equity securities, then you should also expect the: -
Answer✔market values of all stocks to decrease, all else constant
The rate of return required by investors in the market for owning a bond is called the -
Answer✔yield to maturity
Tucci Designs stock has a beta of .89 and a risk free rate of 2.15%, and the expected return on
the market is 11%. The expected return for the stock is closest to... - Answer✔10.0265%
2
BFIN300 Final Exam Questions And
Answers Latest Updated 2025 |100%
Verified.
An underlying assumption of the dividend growth model is that a stock is worth: - Answer✔the
present value of the future income which it generates
The value of common stock today depends on: - Answer✔the expected future dividends, capital
gains, and discount rate.
The constant dividend growth model is: - Answer✔generally not used in practice because most
stocks grow at a non-constant rate.
The slope of an asset's security market line is the: - Answer✔beta coefficient.
Risk that affects a large number of assets, each to a greater or lesser degree, is called: -
Answer✔systematic risk
The standard deviation of a portfolio will tend to increase when: - Answer✔the portfolio
concentration on a single cyclical industry increases
A symmetric, bell-shaped frequency distribution that is completely defined by its mean and
standard deviation is the: - Answer✔normal distribution
1
, ©EVERLY 2025 ALL RIGHTS RESERVED
The excess return required from a risky asset over that required from a risk-free asset is called
the: - Answer✔risk premium
The risk premium is computed by: - Answer✔subtracting the average return on the US treasury
bill from the average return for the investment
The relationship between nominal rates, real rates, and inflation is known as the -
Answer✔Fisher effect
The percentage of a portfolio's total value invested in a particular asset is called the: -
Answer✔portfolio weight.
The stated interest payment in dollars made on a bond each period is called the bond's -
Answer✔coupon
All else constant, a bond will sell at ____ when the YTM is ___ the coupon rate. - Answer✔a
discount, higher than
Assume you are using the dividend growth model to value stocks. If you expect the market rate
of return to increase across the board on all equity securities, then you should also expect the: -
Answer✔market values of all stocks to decrease, all else constant
The rate of return required by investors in the market for owning a bond is called the -
Answer✔yield to maturity
Tucci Designs stock has a beta of .89 and a risk free rate of 2.15%, and the expected return on
the market is 11%. The expected return for the stock is closest to... - Answer✔10.0265%
2
