AGEC 440 EXAM 1 QUESTIONS WITH THE LATEST SCORE

AGEC 440 EXAM 1 QUESTIONS WITH THE LATEST SCORE.


Agribusiness -- Answer ✔✔ A number of interrelated subsectors which work together
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formally and informally to produce goods and services
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- a system!
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Agribusiness is a ________ -- Answer ✔✔ System t t t t t t t




Consumer sovereignty -- Answer ✔✔ the power of consumers to decide what gets
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produced

Consumer sovereignty is a _____ -- Answer ✔✔ principle
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Assumption of Consumer sovereignty -- Answer ✔✔ Consumer preferences are well
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defined and have perfect knowledge
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distinctive characteristics of agribusiness sector -- Answer ✔✔ 1. Food is intertwined with
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culture
2. uncertainty underlying biologic basis of crop and livestock production
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3. political intervention across sub sectors and between nations (farm bill)
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4. Ag and food tech development
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5. competitive structures
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6. food is necessity
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Food is ________ with _________ -- Answer ✔✔ intertwined; culture
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Castle's Concern -- Answer ✔✔ Economic theory is sacrificing relevance for abstract
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rigor

Maximizing choices assumes ______ and _______ knowledge -- Answer ✔✔ full;
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complete

, Goals of Agribusiness Management -- Answer ✔✔ - Focus on the decisions and actions of
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the managers within the food and agribusiness sector
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- To improve the performance of the firms decision makers and success
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interrelated formally and informally -- Answer ✔✔ Agribusiness 3 terms t t t t t t t t t




operating profit/invested capital -- Answer ✔✔ ROIC Formula
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(Market Value Debt/Firm Market Value)(Cost of debt)+(Market value of equity/Firm
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Market Value)(Cost of equity) -- Answer ✔✔ WACC Formula
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RFR+Bj[E(Rm,t)-RFR] -- Answer ✔✔ Cost of Equity Formula t t t t t t t




Firms systematic risk -- Answer ✔✔ Bj abbreviated meaning
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Expected Rate of return on a portfolio -- Answer ✔✔ E(Rm,t) abbreviated meaning
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aj+bjRm,t+ej,t -- Answer ✔✔ Rj,t Formula ( historical returns ) t t t t t t t t t




Firm market value/replacement cost of assets
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Tobin's q Formula t t




- future implications since using Po
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- replacement costs= Book value
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- above normal economic performance if Q>1
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- weakness- BV of assets does not adequately value intangible assets -- Answer ✔✔
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RJ,t(actual event)-(aj+bjRm,t) -- Answer ✔✔ XRj,t formula
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(1-RFR)*Bj -- Answer ✔✔ aj Formula t t t t t




Sum of XRs -- Answer ✔✔ CAR formula
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CAR/sigma -- Answer ✔✔ T-Value t t t t