D076 OA EXAM QUESTIONS WITH
COMPLETE SOLUTIONS
What is the difference between the current ratio and the quick ratio? -
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CORRECT ANSWER✔✔-Inventory is excluded in the calculation of the
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quick ratio.
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What is the term for the risk that changes in interest rates will impact
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the value of a bond? - CORRECT ANSWER✔✔-Interest rate risk
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What is used to measure total risk? - CORRECT ANSWER✔✔-Standard
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deviation
What is the term for the return over the entire period that an investor
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owns a financial security? - CORRECT ANSWER✔✔-Holding period
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return
You signed an apartment contract today. You are going to pay $1,500 at
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the beginning of each month for the next 12 months, starting today.
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What type of cash flows is this contract? - CORRECT ANSWER✔✔-An
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annuity due |
, What is the rate at which the average price level of particular goods and
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services in an economy increases over a period of time? - CORRECT
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ANSWER✔✔-Inflation rate |
Which type of interest rate includes interest on interest in addition to
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interest on the principal? - CORRECT ANSWER✔✔-Compound interest
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What is the difference between return on assets (ROA) and return on
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equity (ROE)? - CORRECT ANSWER✔✔-ROE considers the capital
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structure of a company, while ROA does not.
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What does high inventory turnover relative to the industry and
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competitors indicate? - CORRECT ANSWER✔✔-The firm does not hold
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enough inventory and is making its customers wait longer to receive
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their purchased goods.
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What is the ratio that tells you on average how long it takes for a firm to
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collect accounts receivable? - CORRECT ANSWER✔✔-Average collection
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period
Three different names are used for interest rate for different purposes
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and perspectives: - CORRECT ANSWER✔✔-discount rate, required rate,
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and cost of capital.
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COMPLETE SOLUTIONS
What is the difference between the current ratio and the quick ratio? -
| | | | | | | | | | | | |
CORRECT ANSWER✔✔-Inventory is excluded in the calculation of the
| | | | | | | | |
quick ratio.
|
What is the term for the risk that changes in interest rates will impact
| | | | | | | | | | | | | |
the value of a bond? - CORRECT ANSWER✔✔-Interest rate risk
| | | | | | | | |
What is used to measure total risk? - CORRECT ANSWER✔✔-Standard
| | | | | | | | | |
deviation
What is the term for the return over the entire period that an investor
| | | | | | | | | | | | | |
owns a financial security? - CORRECT ANSWER✔✔-Holding period
| | | | | | | |
return
You signed an apartment contract today. You are going to pay $1,500 at
| | | | | | | | | | | | |
the beginning of each month for the next 12 months, starting today.
| | | | | | | | | | | |
What type of cash flows is this contract? - CORRECT ANSWER✔✔-An
| | | | | | | | | | |
annuity due |
, What is the rate at which the average price level of particular goods and
| | | | | | | | | | | | | |
services in an economy increases over a period of time? - CORRECT
| | | | | | | | | | | |
ANSWER✔✔-Inflation rate |
Which type of interest rate includes interest on interest in addition to
| | | | | | | | | | | |
interest on the principal? - CORRECT ANSWER✔✔-Compound interest
| | | | | | |
What is the difference between return on assets (ROA) and return on
| | | | | | | | | | | |
equity (ROE)? - CORRECT ANSWER✔✔-ROE considers the capital
| | | | | | | |
structure of a company, while ROA does not.
| | | | | | |
What does high inventory turnover relative to the industry and
| | | | | | | | | |
competitors indicate? - CORRECT ANSWER✔✔-The firm does not hold
| | | | | | | | |
enough inventory and is making its customers wait longer to receive
| | | | | | | | | | |
their purchased goods.
| |
What is the ratio that tells you on average how long it takes for a firm to
| | | | | | | | | | | | | | | | |
collect accounts receivable? - CORRECT ANSWER✔✔-Average collection
| | | | | | |
period
Three different names are used for interest rate for different purposes
| | | | | | | | | | |
and perspectives: - CORRECT ANSWER✔✔-discount rate, required rate,
| | | | | | | |
and cost of capital.
| | |
