AGEC 4040 FINAL EXAM QUESTIONS
WITH 100% CORRECT ANSWERS |
LATEST VERSION 2025/2026.
Finance can be defined as - ANS the art and science of managing money
The primary goal of the financial manager is - ANS maximize wealth
The key role of the financial manager is - ANS decision making
The conflict between the goals of a firm's owners and the goals of its non-owner managers is -
ANS the agency problem
When home prices are falling we would expect - ANS high mortgage default rates
________ probability distribution shows all possible outcomes and associated probabilities for a
given event. - ANS A continuous
A firm has an expected dividend next year of $1.20 per share, a zero growth rate of dividends,
and a required return of 10 percent. The value of a share of the firm's common stock is
________. - ANS $12
A behavioral approach that evaluates the impact on the firm's return of simultaneous changes
in a number of project variables is called - ANS scenario analysis
1 | Page @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, In the context of capital budgeting, risk generally refers to - ANS the degree of variability of
the cash inflows.
In comparing the internal rate of return and net present value methods of evaluation, -
ANS net present value is theoretically superior, but financial managers prefer to use internal
rate of return.
The cost of capital reflects the cost of funds - ANS over a long-run time period
The Farm Credit System - ANS is a type of a cooperative
If a young, a beginning farmer is willing to accept supervision and guidance in his activities,
he/she is most likely to be able to get credit from _______ _. - ANS the Farm Service Agency
The future value of $100 received today and deposited at 6 percent for four years is -
ANS $126
Combining two negatively correlated assets to reduce risk is known as - ANS Diversification
The main idea behind the time value of money is that a dollar today is worth more than a dollar
in the future because ________. - ANS investors can earn a return on money they have today
and thereby have more money in the future
The rate of interest actually paid or earned, also called the annual percentage rate (APR), is
the________ interest rate. - ANS Effective
The present value of a perpetual income stream increases when the discount rate ________. -
ANS decreases
Corporate bonds usually have a ________. - ANS a par value of $1,000
2 | Page @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
WITH 100% CORRECT ANSWERS |
LATEST VERSION 2025/2026.
Finance can be defined as - ANS the art and science of managing money
The primary goal of the financial manager is - ANS maximize wealth
The key role of the financial manager is - ANS decision making
The conflict between the goals of a firm's owners and the goals of its non-owner managers is -
ANS the agency problem
When home prices are falling we would expect - ANS high mortgage default rates
________ probability distribution shows all possible outcomes and associated probabilities for a
given event. - ANS A continuous
A firm has an expected dividend next year of $1.20 per share, a zero growth rate of dividends,
and a required return of 10 percent. The value of a share of the firm's common stock is
________. - ANS $12
A behavioral approach that evaluates the impact on the firm's return of simultaneous changes
in a number of project variables is called - ANS scenario analysis
1 | Page @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, In the context of capital budgeting, risk generally refers to - ANS the degree of variability of
the cash inflows.
In comparing the internal rate of return and net present value methods of evaluation, -
ANS net present value is theoretically superior, but financial managers prefer to use internal
rate of return.
The cost of capital reflects the cost of funds - ANS over a long-run time period
The Farm Credit System - ANS is a type of a cooperative
If a young, a beginning farmer is willing to accept supervision and guidance in his activities,
he/she is most likely to be able to get credit from _______ _. - ANS the Farm Service Agency
The future value of $100 received today and deposited at 6 percent for four years is -
ANS $126
Combining two negatively correlated assets to reduce risk is known as - ANS Diversification
The main idea behind the time value of money is that a dollar today is worth more than a dollar
in the future because ________. - ANS investors can earn a return on money they have today
and thereby have more money in the future
The rate of interest actually paid or earned, also called the annual percentage rate (APR), is
the________ interest rate. - ANS Effective
The present value of a perpetual income stream increases when the discount rate ________. -
ANS decreases
Corporate bonds usually have a ________. - ANS a par value of $1,000
2 | Page @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
