BUS1 170 Final Questions AND Correct Answers
A bond has five years to maturity, a $1,000 face value,
and a 5.5% coupon rate with annual coupons. What is
its yield to maturity if it is currently trading at $846.11?
- ✔✔9.51%
A company's stock price dropped when it announced
that its revenue had decreased because of the quality
issues of its products. This is an example of_______. -
✔✔Unsystematic Risk
A credit card account that charges an interest rate of
1.25% monthly would have an effective annual rate of
_______ - ✔✔16.08%
A credit card account that charges interest at the rate of
1.25% monthly would have an APR of __________ -
✔✔15%
,A delivery company is creating a balance sheet. Which
of the following would most likely be considered a
short-term liability on this balance sheet?
A) Depreciation of vehicles in last year
B) Revenue received for delivery of items not delivered
C) A loan that must be paid back in two years
D) prepaid rent on offices occupied by company -
✔✔Revenue received for the delivery of items that have
not yet been delivered
A firm has $680 in inventory, $2,320 in fixed assets,
$280 in accounts receivables, $490 in accounts payable,
and $130 in cash. What is the amount of current assets?
- ✔✔$1,090
A portfolio is comprised of 50% COLA and 50% GAs.
Expected return on COLA is 2.1% in the next year and
expected return on GAS is 0.8%. The expected return on
the portfolio is _______% - ✔✔1.45%
A project creates value for a firm's owners:
, A) Any time the cash inflows exceeds the cash outflows
B) When the net present value of the project is positive
C) whenever the internal rate of return is less than the
required return - ✔✔When the net present value of the
project is positive
A project has the following cash flows:
Year 0: $64,000
Year 1: -$30,000
Year 2: -$48,000
The required return is 12%. Which of the following
statements is correct?
A) IRR and NPV decisions give same recommendations
B) Project should be evaluated based on IRR decision
rate
C) The project should be evaluated based on the NPV
decision rule - ✔✔The project should be evaluated
based on the NPV decision rule
A bond has five years to maturity, a $1,000 face value,
and a 5.5% coupon rate with annual coupons. What is
its yield to maturity if it is currently trading at $846.11?
- ✔✔9.51%
A company's stock price dropped when it announced
that its revenue had decreased because of the quality
issues of its products. This is an example of_______. -
✔✔Unsystematic Risk
A credit card account that charges an interest rate of
1.25% monthly would have an effective annual rate of
_______ - ✔✔16.08%
A credit card account that charges interest at the rate of
1.25% monthly would have an APR of __________ -
✔✔15%
,A delivery company is creating a balance sheet. Which
of the following would most likely be considered a
short-term liability on this balance sheet?
A) Depreciation of vehicles in last year
B) Revenue received for delivery of items not delivered
C) A loan that must be paid back in two years
D) prepaid rent on offices occupied by company -
✔✔Revenue received for the delivery of items that have
not yet been delivered
A firm has $680 in inventory, $2,320 in fixed assets,
$280 in accounts receivables, $490 in accounts payable,
and $130 in cash. What is the amount of current assets?
- ✔✔$1,090
A portfolio is comprised of 50% COLA and 50% GAs.
Expected return on COLA is 2.1% in the next year and
expected return on GAS is 0.8%. The expected return on
the portfolio is _______% - ✔✔1.45%
A project creates value for a firm's owners:
, A) Any time the cash inflows exceeds the cash outflows
B) When the net present value of the project is positive
C) whenever the internal rate of return is less than the
required return - ✔✔When the net present value of the
project is positive
A project has the following cash flows:
Year 0: $64,000
Year 1: -$30,000
Year 2: -$48,000
The required return is 12%. Which of the following
statements is correct?
A) IRR and NPV decisions give same recommendations
B) Project should be evaluated based on IRR decision
rate
C) The project should be evaluated based on the NPV
decision rule - ✔✔The project should be evaluated
based on the NPV decision rule
