FIN 111 Exam 3 Question and answers
verified to pass 2025
Long-term objectives are defined as objectives that can be accomplished
within 1 year - correct answer ✔False, 5< years
An emergency fund is an amount of money that can be obtained quickly in
case of immediate needs - correct answer ✔True
Corporate bonds - correct answer ✔Must be paid at maturity
Which of the following would have greatest potential for safety - correct
answer ✔Government bonds
Which would have the greatest potential for risk - correct answer ✔Options
Which of following is false - correct answer ✔Asset allocation eliminates the
risk associated with an investment program
FV=P ((1+r)^n)-1 / r) - correct answer ✔P= periodic payment r= rate per
period n= number of periods
Rate of return - correct answer ✔= (Cash received+ change in market
value)/original investment
Total dollar return - correct answer ✔=cash received+ change in market
value
, One reason corporations sell common stock is to finance their business start-
up costs - correct answer ✔True
A corporation is required by law to pay dividends to stockholders - correct
answer ✔False
The record date is when a stockholder must be registered on the corporation
books to receive dividends - correct answer ✔True
A firms projected future earnings have very little or no impact on the value of a
corporations stock - correct answer ✔False
The book value for a stock is determined by deducting all liabilities from the
corporations assets and dividing the remainder by the number of outstanding
shares of common stock - correct answer ✔True
A stock split - correct answer ✔Enables management to bring a stock's price
into an "ideal" price range
Earnings per share are calculated by dividing - correct answer ✔A firm's
after-tax income by the number of shares outstanding
A stock that follows the business cycle of advances and declines in the
economy is called a ___ stock - correct answer ✔Cyclical
When stocks are traded between investors, they are traded in the ___ market
- correct answer ✔Secondary
verified to pass 2025
Long-term objectives are defined as objectives that can be accomplished
within 1 year - correct answer ✔False, 5< years
An emergency fund is an amount of money that can be obtained quickly in
case of immediate needs - correct answer ✔True
Corporate bonds - correct answer ✔Must be paid at maturity
Which of the following would have greatest potential for safety - correct
answer ✔Government bonds
Which would have the greatest potential for risk - correct answer ✔Options
Which of following is false - correct answer ✔Asset allocation eliminates the
risk associated with an investment program
FV=P ((1+r)^n)-1 / r) - correct answer ✔P= periodic payment r= rate per
period n= number of periods
Rate of return - correct answer ✔= (Cash received+ change in market
value)/original investment
Total dollar return - correct answer ✔=cash received+ change in market
value
, One reason corporations sell common stock is to finance their business start-
up costs - correct answer ✔True
A corporation is required by law to pay dividends to stockholders - correct
answer ✔False
The record date is when a stockholder must be registered on the corporation
books to receive dividends - correct answer ✔True
A firms projected future earnings have very little or no impact on the value of a
corporations stock - correct answer ✔False
The book value for a stock is determined by deducting all liabilities from the
corporations assets and dividing the remainder by the number of outstanding
shares of common stock - correct answer ✔True
A stock split - correct answer ✔Enables management to bring a stock's price
into an "ideal" price range
Earnings per share are calculated by dividing - correct answer ✔A firm's
after-tax income by the number of shares outstanding
A stock that follows the business cycle of advances and declines in the
economy is called a ___ stock - correct answer ✔Cyclical
When stocks are traded between investors, they are traded in the ___ market
- correct answer ✔Secondary
