FINA 3000 Exam 1 T/F questions and solutions
In our current event, we described Peleton as using a disruptor model. - answers
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Grubhub's stock price increased due to good news in the U.S. jobs market. - answers ji ji ji ji ji ji ji ji ji ji ji ji ji ji
A loan is designed as a simple interest loan. This means that the amount of interest paid with each payment will
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decrease. - answersTRUE
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All else equal, the greater the number of compound periods, the greater the PV of an investment. -
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answersFALSE
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From our current event, Tesla now has the largest market capitalization of any auto maker in the United
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States. - answers
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A perpetuity is an annuity with an infinite number of payments. - answersTRUE
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In our hedge fund current event, Dr. Pope suggested that the hedge fund manager could impact change in the
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world by removing boards of directors that do not agree with his vision. - answers
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A disadvantage of a sole proprietor is unlimited liability. - answersTRUE
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Preemptive right refers to the idea that common shareholders have limited voting rights in firm decisions. - ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji
answersFALSE
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In our Tesla current event, we mentioned one key long term issue for Tesla is the ability to scale their
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production. - answers
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The future value of a growing annuity will increase if the growth rate increases. - answersTRUE
ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji
The effective annual rate of interest is always greater than the annual percentage rate for any number of
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compound periods (including yearly). - answersFALSE
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A liquidity investor would likely prefer the yield to maturity over the current yield when considering bond
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investments. - answersFALSE
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The TIE ratio measures a firm's ability to make interest payments on debt. - answersTRUE
ji ji ji ji ji ji ji ji ji ji ji ji ji ji
A new investment opportunity costs $1,000 today, and promises to pay $1,500 in exactly two years. This is a
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good investment if the interest rate is less than 12%. - answersTRUE
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The future value of an investment is greater with compound interest rather than simple interest. (all else
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equal) - answersTRUE
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If a bond's yield to maturity is greater than the coupon rate, we say the bond trades at a discount. -
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answersTRUE
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In our current event, we described Peleton as using a disruptor model. - answers
ji ji ji ji ji ji ji ji ji ji ji ji ji
Grubhub's stock price increased due to good news in the U.S. jobs market. - answers ji ji ji ji ji ji ji ji ji ji ji ji ji ji
A loan is designed as a simple interest loan. This means that the amount of interest paid with each payment will
ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji
decrease. - answersTRUE
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All else equal, the greater the number of compound periods, the greater the PV of an investment. -
ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji
answersFALSE
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From our current event, Tesla now has the largest market capitalization of any auto maker in the United
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States. - answers
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A perpetuity is an annuity with an infinite number of payments. - answersTRUE
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In our hedge fund current event, Dr. Pope suggested that the hedge fund manager could impact change in the
ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji
world by removing boards of directors that do not agree with his vision. - answers
ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji
A disadvantage of a sole proprietor is unlimited liability. - answersTRUE
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Preemptive right refers to the idea that common shareholders have limited voting rights in firm decisions. - ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji
answersFALSE
ji
In our Tesla current event, we mentioned one key long term issue for Tesla is the ability to scale their
ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji
production. - answers
ji ji ji
The future value of a growing annuity will increase if the growth rate increases. - answersTRUE
ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji
The effective annual rate of interest is always greater than the annual percentage rate for any number of
ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji
compound periods (including yearly). - answersFALSE
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A liquidity investor would likely prefer the yield to maturity over the current yield when considering bond
ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji
investments. - answersFALSE
ji ji ji
The TIE ratio measures a firm's ability to make interest payments on debt. - answersTRUE
ji ji ji ji ji ji ji ji ji ji ji ji ji ji
A new investment opportunity costs $1,000 today, and promises to pay $1,500 in exactly two years. This is a
ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji
good investment if the interest rate is less than 12%. - answersTRUE
ji ji ji ji ji ji ji ji ji ji ji ji
The future value of an investment is greater with compound interest rather than simple interest. (all else
ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji
equal) - answersTRUE
ji ji ji
If a bond's yield to maturity is greater than the coupon rate, we say the bond trades at a discount. -
ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji
answersTRUE
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