You passed this Milestone
19 questions were answered correctly.
1
You own a small manufacturing business that produces widgets. You have
spent $150,000 acquiring the fixed assets you need to produce widgets.
Each widget costs you $2 to make and they sell for $15 each, so your
variable cost is 13.3% of the overall revenue.
At your current level of operating leverage, how many widgets must
you sell to break even?
19,950
13,482
11,539
10,000
CONCEPT
Thinking About Operating Leverage
2
Anais purchased stock with an initial share price of $52, and sold it when the
share price was $60. While she owned the stock, she earned $7 in dividends.
What was her total percentage return on the investment?
13.33%
28.85%
19.83%
25.00%
CONCEPT
, Understanding Returns
3
Why is an investment portfolio containing a mix of stocks and bonds
less risky than one containing a single asset class?
Because the markets for stocks and bonds tend to move in the same
direction at the same time.
Because stocks and bonds are positively correlated.
Because bonds typically have a high variance and stocks typically have a low
variance.
Because stocks and bonds are negatively correlated.
CONCEPT
Portfolio Considerations
4
If a portfolio regularly falls twice as much as a benchmark index
rises, the portfolio's beta coefficient is __________.
-2.0%
-0.5%
0.5%
2.0%
CONCEPT
Implications Across Portfolios
5
Using the following variables, calculate an organization's cost of
debt on a $500,000 bond.
Rf: 1%
19 questions were answered correctly.
1
You own a small manufacturing business that produces widgets. You have
spent $150,000 acquiring the fixed assets you need to produce widgets.
Each widget costs you $2 to make and they sell for $15 each, so your
variable cost is 13.3% of the overall revenue.
At your current level of operating leverage, how many widgets must
you sell to break even?
19,950
13,482
11,539
10,000
CONCEPT
Thinking About Operating Leverage
2
Anais purchased stock with an initial share price of $52, and sold it when the
share price was $60. While she owned the stock, she earned $7 in dividends.
What was her total percentage return on the investment?
13.33%
28.85%
19.83%
25.00%
CONCEPT
, Understanding Returns
3
Why is an investment portfolio containing a mix of stocks and bonds
less risky than one containing a single asset class?
Because the markets for stocks and bonds tend to move in the same
direction at the same time.
Because stocks and bonds are positively correlated.
Because bonds typically have a high variance and stocks typically have a low
variance.
Because stocks and bonds are negatively correlated.
CONCEPT
Portfolio Considerations
4
If a portfolio regularly falls twice as much as a benchmark index
rises, the portfolio's beta coefficient is __________.
-2.0%
-0.5%
0.5%
2.0%
CONCEPT
Implications Across Portfolios
5
Using the following variables, calculate an organization's cost of
debt on a $500,000 bond.
Rf: 1%
