MGT 181 FINAL PRACTICE EXAM QUESTIONS
What is the required return on an asset with a beta of (1.5)? - Answer -1. E = risk free
rate + beta (rate of return-risk free rate)
2. remember to change percentages to decimals for calculation
What is the reward/risk ratio? - Answer -1. (calculated required return-risk free
rate)/beta
2. do not change the percentages to decimals for this calculation
What is the required return on a portfolio consisting of 40% of the asset above and the
rest in an asset with an average amount of systematic risk? - Answer -1. Given of the
asset (calculated required return) + difference of given asset (required rate of return
given)
post money for % of the firm - Answer -Post money calculation = initial dollar amount /
percent (don't forget to change this to a decimal)
pre money for % of the firm - Answer -Pre money calculation = post money - initial
dollar amount
post money for existing shares - Answer -1. figure out the percentage = existing
shares/shares issued
2. offers/percentage
pre money for existing shares - Answer -pre money = post money-investment offer
what is the calculated cross rate for Euros per swiss franc? - Answer -1. typically use
the first two lines given
2. (euro/1) over / (sf/dollar)
what are the four steps to make $100 from triangle arbitrage? - Answer -1. (Dollar
amount * (euro/$)) = x
2. x * (SF/third amount given euro per SF) = y
3. y * ($/SF) = z
4. z-intial $ = profit
what is the arbitrage opportunity? - Answer -1. St = So * [1+(Hre-Hrs)]t
2. change the (russian) percentages to decimals before subtracting
What is the merger premium per share? - Answer -1. (Cash/shares outstanding)-
market price per share
2. be careful to use the first shares outstanding
What is the required return on an asset with a beta of (1.5)? - Answer -1. E = risk free
rate + beta (rate of return-risk free rate)
2. remember to change percentages to decimals for calculation
What is the reward/risk ratio? - Answer -1. (calculated required return-risk free
rate)/beta
2. do not change the percentages to decimals for this calculation
What is the required return on a portfolio consisting of 40% of the asset above and the
rest in an asset with an average amount of systematic risk? - Answer -1. Given of the
asset (calculated required return) + difference of given asset (required rate of return
given)
post money for % of the firm - Answer -Post money calculation = initial dollar amount /
percent (don't forget to change this to a decimal)
pre money for % of the firm - Answer -Pre money calculation = post money - initial
dollar amount
post money for existing shares - Answer -1. figure out the percentage = existing
shares/shares issued
2. offers/percentage
pre money for existing shares - Answer -pre money = post money-investment offer
what is the calculated cross rate for Euros per swiss franc? - Answer -1. typically use
the first two lines given
2. (euro/1) over / (sf/dollar)
what are the four steps to make $100 from triangle arbitrage? - Answer -1. (Dollar
amount * (euro/$)) = x
2. x * (SF/third amount given euro per SF) = y
3. y * ($/SF) = z
4. z-intial $ = profit
what is the arbitrage opportunity? - Answer -1. St = So * [1+(Hre-Hrs)]t
2. change the (russian) percentages to decimals before subtracting
What is the merger premium per share? - Answer -1. (Cash/shares outstanding)-
market price per share
2. be careful to use the first shares outstanding
