BFIN Final Practice Questions | Business Finance Exam Review & Answers 2026
Which type of company analysis only allows for one variable to change?
a) Simulation Analysis
b) Break-even Analysis
c) Sensitivity Analysis
d) Scenario analysis
e) Cash flow analysis - ANS ✔✔c)sensitivity analysis
Which type of company analysis considers the interrelationships between different cashflow
components?
a) Simulation Analysis
b) Break-even Analysis
c) Sensitivity Analysis
d) Scenario analysis
e) Cash flow analysis - ANS ✔✔a)Simulation analysis
If a company in in violation of a financial covenant, and is precluded from accessing funding to
undertake a positive NPV project, what type of situation what kind of capital rationing would
this be considered?
a) Soft rationing
b) Bankruptcy
c) Hard rationing
d) S#@t out of luck
, e) FTX Company - ANS ✔✔c) Hard rationing
Which of the following is a true statement about "operating leverage"
a) The greater the degree of operating leverage, the greater the potential for forecasting risk
b) Suggests that a business is capital intensive
c) The degree to which a business relies on fixed costs
d) Small errors in operating leverage can magnify problems in forecasting
e) All of the above - ANS ✔✔e) All of the above
Steve "Uncle Stevie" Cohen is speaking to David Stearns about "efficient capital markets
theory". Uncle Stevie would be correct if he stated the following about "efficient capital
markets"
a) A market in which a security trades is priced efficiently
b) Based on available information, there is no reason that the current share price is too high or
too low
c) Although market inefficiencies may exist, they are relatively small and uncommon
d) The theory is nonsense and is just taught so professors can sell textbooks e) All of the above -
ANS ✔✔e) All of the above
How is return on investment (ROI) of an equity security calculated?
a) It cannot be calculated
b) Adding the dividend to a company's share price
c) Adding the dividend yield to the coupon rate
d) Adding the capital gain percentage to the dividend yield
Which type of company analysis only allows for one variable to change?
a) Simulation Analysis
b) Break-even Analysis
c) Sensitivity Analysis
d) Scenario analysis
e) Cash flow analysis - ANS ✔✔c)sensitivity analysis
Which type of company analysis considers the interrelationships between different cashflow
components?
a) Simulation Analysis
b) Break-even Analysis
c) Sensitivity Analysis
d) Scenario analysis
e) Cash flow analysis - ANS ✔✔a)Simulation analysis
If a company in in violation of a financial covenant, and is precluded from accessing funding to
undertake a positive NPV project, what type of situation what kind of capital rationing would
this be considered?
a) Soft rationing
b) Bankruptcy
c) Hard rationing
d) S#@t out of luck
, e) FTX Company - ANS ✔✔c) Hard rationing
Which of the following is a true statement about "operating leverage"
a) The greater the degree of operating leverage, the greater the potential for forecasting risk
b) Suggests that a business is capital intensive
c) The degree to which a business relies on fixed costs
d) Small errors in operating leverage can magnify problems in forecasting
e) All of the above - ANS ✔✔e) All of the above
Steve "Uncle Stevie" Cohen is speaking to David Stearns about "efficient capital markets
theory". Uncle Stevie would be correct if he stated the following about "efficient capital
markets"
a) A market in which a security trades is priced efficiently
b) Based on available information, there is no reason that the current share price is too high or
too low
c) Although market inefficiencies may exist, they are relatively small and uncommon
d) The theory is nonsense and is just taught so professors can sell textbooks e) All of the above -
ANS ✔✔e) All of the above
How is return on investment (ROI) of an equity security calculated?
a) It cannot be calculated
b) Adding the dividend to a company's share price
c) Adding the dividend yield to the coupon rate
d) Adding the capital gain percentage to the dividend yield
