BFIN 300 EXAM QUESTIONS WITH 100% CORRECT ANSWERS

BFIN 300 EXAM QUESTIONS WITH 100% CORRECT ANSWERS Which is the best definition of an annuity? A. A cash flow stream which arises when the stream of consistent cash flows continues forever; B. Preferred shares; C. A cash flow stream where a fixed amount is received every year; D. Effective annual rate. - Answer-C. A cash flow stream where a fixed amount is received every year What is a financial security? A. Ease with which an owner of an asset can sell it; B. A claim against assets of cash flows of a company; C. Dow Jones Industrial Average; or D. Voting rights to elect firm directors. - Answer-B. A claim against assets of cash flows of a company; Who is the primary regulator of the US securities markets? A. Federal Reserve Bank of New York; B. Chicago Board of Options Exchange; C. Securities and Exchange Commission; or D. New York Stock Exchange. - Answer-C. Securities and Exchange Commission The Securities and Exchange Commission does all of the following except: A. Licensing securities professionals; B. Provide investors with complete disclosure of material information on listed securities; C. Regulates US stock exchanges; or D. Regulates all national banks in the US. - Answer-D. Regulates all national banks in the US. Which of the following is a security traded in the US money market? A. Mortgage-backed securities; B. Treasury Bills; C. Preferred Stock; or D. Corporate bonds. - Answer-B. Treasury Bills; What is the best definition of a derivative in the context of securities markets? A. The degree to which an asset or security can be bought or sold in the market without affecting its price; B. Buying or selling a stock at the current market price; C. Financial decisions and their impact on the value of a company; or D. A security where the value is based on the value of another security. - Answer-D. A security where the value is based on the value of another security. A Johnson & Johnson bond pays an 8% coupon rate on a bond provided that its earnings exceed an ROE of 8%. What type of security is this? A. Perpetual bond; B. Equity; C. Dividend; or D. Income bond. - Answer-D. Income bond. 2) Which security has the greatest preference in liquidation? A. Equity; B. Preferred shares; C. Subordinated debt; or D. Senior debt. - Answer-D. Senior debt. Which security has a "residual claim" on a company's cash flows? A. Equity; B. Preferred shares; C. Subordinated debt; or D. Senior debt. - Answer-A. Equity; Which two cash flows are received by a typical bond? A. Dividends and interest; B. Share sale and principal at maturity; C. Dividends and share sale; or D. Interest and principal at maturity. - Answer-D. Interest and principal at maturity. Which best explains a fixed coupon bond? A. Sukuk; B. Fixed coupon paid until maturity, and lump sum returned at maturity; C. Fixed coupon paying bond with no maturity; or D. A debt security which promises one payment in the future. - Answer-B. Fixed coupon paid until maturity, and lump sum returned at maturity; A bonds coupon rate is equal to the annual interest divided by which one of the following? A. Call Price; B. Current Price; C. Face Value; D. Clean Price; or E. Dirty Price. - Answer-C. Face Value; The bond principal is repaid on which one of these dates? A. Coupon date; B. Yield date; C. Maturity date; D. Dirty date; or E. Clean dare. - Answer-C. Maturity date;