FIN 301
FIN 301 EXAM QUESTIONS AND ANSWERS LATEST TOP
SCORE.
small cap stocks are riskier than corporate bonds answer >> true
investors believe that transaction costs, taxes, and inflation are the enemy be
they reduce the return on your investments answer >> true
the basic principles of finance dictate that in the short run, stock prices are driven
by answer >> supply and demand
Which of the following would reduce returns of your investment portfolio answer
>> increase in brokerage commissions?
if Apple's stock was at 260 a year ago and trades at 320 today and there was a
$10 dividend, what is the return answer >> 320-260 + = 26.9%
If a stock is currently trading at 100 but a company says they will acquire that
company's stock for $120 then what will happen to the stock according to the
efficient market hypothesis answer >> it will increase as soon as the
announcement is made
what does the efficient market hypothesis say about using technical analysis to
forecast future stock prices answer >> it is useless
,FIN 301
If you invest in a stock with a beta of .7 you would expect your return to be
answer >> lower than that of the overall market
the random walk hypothesis states that answer >> day to day stock prices move
randomly and independently from one another
the primary business of Berkshire Hathaway is answer >> insurance
inflation reduces your return by answer >> reducing the value of the money you
receive on the investment
risk aversion means answer >> investors take small risks but do not avoid risk at
all costs
behavioral finance believes that answer >> markets are not always efficient
to achieve the highest level of return you have to answer >> diversify your
investment into different asset classes
long run stock prices are driven by answer >> corporate earnings
What do behavioral financiers not believe answer >> that decision makers make
rational decisions that maximize utility
what is an upfront cost of 5% an example of answer >> transaction cost?
, FIN 301
management must act in whose interest answer >> shareholders
which stock is less risky? biotech or utility answer >> utility
the basic principles of finance dictate that in the short run, stock prices are driven
by answer >> supply and demand
Which company would you expect to invest the most in plant and equipment
answer >> oil and gas
capital structure management is managing a company’s answer >> mix between
debt and equity
an example of capital budgeting is answer >> a pharma company building a new
research facility
has there been an increase in global regulation in corporate finance answer >> no
communication with markets is the responsibility of which role answer >> CFO
what are examples of working capital management answer >> increasing
inventory turnover by carefully monitoring specific product categories
lowering days’ payable by keeping up to date supply chain information
lowering outstanding inventory by selling it in bulk to retail customers
FIN 301 EXAM QUESTIONS AND ANSWERS LATEST TOP
SCORE.
small cap stocks are riskier than corporate bonds answer >> true
investors believe that transaction costs, taxes, and inflation are the enemy be
they reduce the return on your investments answer >> true
the basic principles of finance dictate that in the short run, stock prices are driven
by answer >> supply and demand
Which of the following would reduce returns of your investment portfolio answer
>> increase in brokerage commissions?
if Apple's stock was at 260 a year ago and trades at 320 today and there was a
$10 dividend, what is the return answer >> 320-260 + = 26.9%
If a stock is currently trading at 100 but a company says they will acquire that
company's stock for $120 then what will happen to the stock according to the
efficient market hypothesis answer >> it will increase as soon as the
announcement is made
what does the efficient market hypothesis say about using technical analysis to
forecast future stock prices answer >> it is useless
,FIN 301
If you invest in a stock with a beta of .7 you would expect your return to be
answer >> lower than that of the overall market
the random walk hypothesis states that answer >> day to day stock prices move
randomly and independently from one another
the primary business of Berkshire Hathaway is answer >> insurance
inflation reduces your return by answer >> reducing the value of the money you
receive on the investment
risk aversion means answer >> investors take small risks but do not avoid risk at
all costs
behavioral finance believes that answer >> markets are not always efficient
to achieve the highest level of return you have to answer >> diversify your
investment into different asset classes
long run stock prices are driven by answer >> corporate earnings
What do behavioral financiers not believe answer >> that decision makers make
rational decisions that maximize utility
what is an upfront cost of 5% an example of answer >> transaction cost?
, FIN 301
management must act in whose interest answer >> shareholders
which stock is less risky? biotech or utility answer >> utility
the basic principles of finance dictate that in the short run, stock prices are driven
by answer >> supply and demand
Which company would you expect to invest the most in plant and equipment
answer >> oil and gas
capital structure management is managing a company’s answer >> mix between
debt and equity
an example of capital budgeting is answer >> a pharma company building a new
research facility
has there been an increase in global regulation in corporate finance answer >> no
communication with markets is the responsibility of which role answer >> CFO
what are examples of working capital management answer >> increasing
inventory turnover by carefully monitoring specific product categories
lowering days’ payable by keeping up to date supply chain information
lowering outstanding inventory by selling it in bulk to retail customers
