©THESTAR 2024/2025 ALL RIGHTS RESERVED 12:43 PM.
HFT 4464 Final Exam Prep Questions With
Correct Answers 100% Verified.
A bond is: - Answer✔A form of debt capital issued by a corporation.
The advantages of a corporation are: - Answer✔It has unlimited life and limited liability, and it
is relatively easy to raise capital.
Statement 1:
A bank account is an example of a current asset.
Statement 2:
Inventory is an example of a fixed asset. - Answer✔Statement 1 is correct; statement 2 is
incorrect
The goal of financial management is: - Answer✔To maximize the wealth of the owners.
Which of the following is correct? - Answer✔Financial management is the process of making
decisions about assets, the financing of those assets, and the distribution of any potential cash
flow generated by the assets.
A company's liabilities increased by $2,000,000. This means that - Answer✔This company's total
assets will increase by $2,000,000
A company has a cash inflow of $300,000 and a cash outflow of $400,000. Therefore, its cash
flow has... - Answer✔decreased by $100,000
Keeping records for a business separate from the owner's personal affairs is in keeping with the
_______ principle - Answer✔business entity
1|Page
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A balance sheet has a total debit side of $ 2,000,000. The total liabilities are $500,000.
Therefore, the total Onwers' equity is: - Answer✔$1,500,000
The upward valuation of land subsequent to its purchase violates the _______
principle. - Answer✔cost
An investor bought a share in company X in 2015 and sells this share again in 2017 for $60. In
the two years that she held the share, she received $2.75 in dividends. The Holding Period of
Return for this company is 12.75%. Based on the available information, the purchasing price of
this share would then be (rounded to two digits): - Answer✔$55.65
An investor bought a share in company X in 2015 for $60 and sells this share again in 2017. In
the two years that she held the share, she received $4.50 in dividends. The Holding Period of
Return for this company is 14.25%. Based on the available information, the selling price of this
share would then be (rounded to two digits): - Answer✔$64.05
Statement 1:
Bonds are prices in the market through an index.
Statement 2:
An index of 102 means that the par value of a bond of $1000 is valued at $1020 in the market. -
Answer✔Both statements are correct
A bond has a par value of $1,000. Currently, the index of this bond is 99.75. The market value of
this bond is then: - Answer✔$997.50
A bond pays $91.00 in interest each year. The market value is $1,035.00, which is equal to an
index of 103.5. Based on this information, the yield of this bond would then be: - Answer✔8.8%
When calculating a holding period of return, dividends are excluded. - Answer✔False
The annual returns of the Dow Jones Industrial Average and the S&P 500 index are highly
positively correlated. - Answer✔True
Financial markets only involve buyers and sellers of financial instruments. - Answer✔False
The bid price is the price a broker will give you for the stock you want to sell. - Answer✔False
2|Page
, ©THESTAR 2024/2025 ALL RIGHTS RESERVED 12:43 PM.
Interest expense is tax deductible but dividends are not. - Answer✔True
You are provided below with a consolidated balance sheet of Darden Restaurants for the
periods of end-May 2016 and 2015. You can also retrieve this report from
https://s2.q4cdn.com/922937207/files/doc_financials/2016/AR/Darden_2016AR.pdf (Links to
an external site.)Links to an external site. , where you can find the data on page 26. Based on
this balance sheet, the debt-to-equity ratio for end-May 2015 is... - Answer✔1.57
From a balance sheet, you are provided with the following information:
Total equity = $ 1,500,000
Debt-to-equity ratio = 1.5
Based on this information, the total debt of this balance sheet is equal to.... -
Answer✔$2,250,000
Hotel Coimbra in Portugal had an ADR in 2017 of $325, while its REVPAR was $157. Based on
this information, we can calculate that this hotel's occupancy rate was ... in 2017. -
Answer✔48%
You are provided below with a consolidated balance sheet of Darden Restaurants for the
periods of end-May 2016 and 2015. You can also retrieve this report from
https://s2.q4cdn.com/922937207/files/doc_financials/2016/AR/Darden_2016AR.pdf (Links to
an external site.)Links to an external site. , where you can find the data on page 26. Based on
this balance sheet, the debt-to-equity ratio for end-May 2016 is... - Answer✔1.35
From a balance sheet, you are provided with the following information:
Total assets = $ 3,500,000
Debt-to-assets ratio = 0.25
Based on this information, the total equity position on this balance sheet is equal to.... -
Answer✔$2,625,000
The DuPont ratio is a combination of two ratios. These are the profit margin and the solvency
ratio. - Answer✔False
3|Page
HFT 4464 Final Exam Prep Questions With
Correct Answers 100% Verified.
A bond is: - Answer✔A form of debt capital issued by a corporation.
The advantages of a corporation are: - Answer✔It has unlimited life and limited liability, and it
is relatively easy to raise capital.
Statement 1:
A bank account is an example of a current asset.
Statement 2:
Inventory is an example of a fixed asset. - Answer✔Statement 1 is correct; statement 2 is
incorrect
The goal of financial management is: - Answer✔To maximize the wealth of the owners.
Which of the following is correct? - Answer✔Financial management is the process of making
decisions about assets, the financing of those assets, and the distribution of any potential cash
flow generated by the assets.
A company's liabilities increased by $2,000,000. This means that - Answer✔This company's total
assets will increase by $2,000,000
A company has a cash inflow of $300,000 and a cash outflow of $400,000. Therefore, its cash
flow has... - Answer✔decreased by $100,000
Keeping records for a business separate from the owner's personal affairs is in keeping with the
_______ principle - Answer✔business entity
1|Page
, ©THESTAR 2024/2025 ALL RIGHTS RESERVED 12:43 PM.
A balance sheet has a total debit side of $ 2,000,000. The total liabilities are $500,000.
Therefore, the total Onwers' equity is: - Answer✔$1,500,000
The upward valuation of land subsequent to its purchase violates the _______
principle. - Answer✔cost
An investor bought a share in company X in 2015 and sells this share again in 2017 for $60. In
the two years that she held the share, she received $2.75 in dividends. The Holding Period of
Return for this company is 12.75%. Based on the available information, the purchasing price of
this share would then be (rounded to two digits): - Answer✔$55.65
An investor bought a share in company X in 2015 for $60 and sells this share again in 2017. In
the two years that she held the share, she received $4.50 in dividends. The Holding Period of
Return for this company is 14.25%. Based on the available information, the selling price of this
share would then be (rounded to two digits): - Answer✔$64.05
Statement 1:
Bonds are prices in the market through an index.
Statement 2:
An index of 102 means that the par value of a bond of $1000 is valued at $1020 in the market. -
Answer✔Both statements are correct
A bond has a par value of $1,000. Currently, the index of this bond is 99.75. The market value of
this bond is then: - Answer✔$997.50
A bond pays $91.00 in interest each year. The market value is $1,035.00, which is equal to an
index of 103.5. Based on this information, the yield of this bond would then be: - Answer✔8.8%
When calculating a holding period of return, dividends are excluded. - Answer✔False
The annual returns of the Dow Jones Industrial Average and the S&P 500 index are highly
positively correlated. - Answer✔True
Financial markets only involve buyers and sellers of financial instruments. - Answer✔False
The bid price is the price a broker will give you for the stock you want to sell. - Answer✔False
2|Page
, ©THESTAR 2024/2025 ALL RIGHTS RESERVED 12:43 PM.
Interest expense is tax deductible but dividends are not. - Answer✔True
You are provided below with a consolidated balance sheet of Darden Restaurants for the
periods of end-May 2016 and 2015. You can also retrieve this report from
https://s2.q4cdn.com/922937207/files/doc_financials/2016/AR/Darden_2016AR.pdf (Links to
an external site.)Links to an external site. , where you can find the data on page 26. Based on
this balance sheet, the debt-to-equity ratio for end-May 2015 is... - Answer✔1.57
From a balance sheet, you are provided with the following information:
Total equity = $ 1,500,000
Debt-to-equity ratio = 1.5
Based on this information, the total debt of this balance sheet is equal to.... -
Answer✔$2,250,000
Hotel Coimbra in Portugal had an ADR in 2017 of $325, while its REVPAR was $157. Based on
this information, we can calculate that this hotel's occupancy rate was ... in 2017. -
Answer✔48%
You are provided below with a consolidated balance sheet of Darden Restaurants for the
periods of end-May 2016 and 2015. You can also retrieve this report from
https://s2.q4cdn.com/922937207/files/doc_financials/2016/AR/Darden_2016AR.pdf (Links to
an external site.)Links to an external site. , where you can find the data on page 26. Based on
this balance sheet, the debt-to-equity ratio for end-May 2016 is... - Answer✔1.35
From a balance sheet, you are provided with the following information:
Total assets = $ 3,500,000
Debt-to-assets ratio = 0.25
Based on this information, the total equity position on this balance sheet is equal to.... -
Answer✔$2,625,000
The DuPont ratio is a combination of two ratios. These are the profit margin and the solvency
ratio. - Answer✔False
3|Page
