4000 Mcqs

Composed & Solved
MGT201 Online Quiz#4 Current 400 MCQs Solved

Question # 1 of 15 ( Start time: 12:09:58 AM !otal Mar"s: 1 An annuit# due is al$a#s $ort% &&&&& a 'ompara(le annuit#) Sele't 'orre't option: *ess t%an More t%an +,ual to Can not (e found from t%e -iven information Question # 2 of 15 ( Start time: 12:11:10 AM !otal Mar"s: 1 .%ere t%e sto'" points $ill lie/ if a sto'" is a part of totall# diversified portfolio0 Sele't 'orre't option: 1t $ill lie (elo$ t%e re-ression line 1t $ill line a(ove t%e re-ression line 1t $ill line e2a'tl# on t%e re-ression line 1t $ill (e tan-ent to t%e re-ression line Question # 3 of 15 ( Start time: 12:11:45 AM !otal Mar"s: 1 .%at is t%e easiest met%od to diversif# a$a# firm6spe'ifi' ris"s0 Sele't 'orre't option: !o (u# sto'"s $it% a (eta of 1)0 !o (uild a portfolio $it% 5610 individual sto'"s !o pur'%ase t%e s%ares of a mutual fund !o pur'%ase sto'"s t%at plot a(ove t%e se'urit# mar"et line Question # 4 of 15 ( Start time: 12:12:23 AM !otal Mar"s: 1 7ominal 1nterest 8ate is also "no$n as: Sele't 'orre't option: +ffe'tive interest 8ate Annual per'enta-e rate 9eriodi' interest rate 8e,uired interest rate Question # 5 of 15 ( Start time: 12:13:02 AM !otal Mar"s: 1 .%en ta2es are 'onsidered/ t%e value of a levered firm e,uals t%e value of t%e&&&&&&&&) Sele't 'orre't option:
Vuhelp groupNote Vuhelp groupComposed & Solved
Vuhelp groupNote Vuhelp group

:nlevered firm :nlevered firm plus t%e value of t%e de(t :nlevered firm plus t%e present value of t%e ta2 s%ield :nlevered firm plus t%e value of t%e de(t plus t%e value of t%e ta2 s%ield Question # ; of 15 ( Start time: 12:14:15 AM !otal Mar"s: 1 !%e &&&&&&&&&& t%e 'oeffi'ient of variation &&&&&&&& t%e relative ris" of t%e investment) Sele't 'orre't option: *ar-er< *ar-er *ar-er< Smaller Smaller< *ar-er Smaller< Smaller Question # 5 of 15 ( Start time: 12:15:05 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 'orre't re-ardin- t%e opportunit# 'ost of 'apital for a pro=e't0 Sele't 'orre't option: !%e opportunit# 'ost of 'apital is t%e return t%at investors -ive up (# investin- in t%e pro=e't rat%er t%an in se'urities of e,uivalent ris") >inan'ial mana-ers use t%e 'apital asset pri'in- model to estimate t%e opportunit# 'ost of 'apital !%e 'ompan# 'ost of 'apital is t%e e2pe'ted rate of return demanded (# investors in a 'ompan# All of t%e -iven options Question # 8 of 15 ( Start time: 12:15:4; AM !otal Mar"s: 1 >or $%i'% of t%e follo$in- 'osts is it -enerall# ne'essar# to appl# a ta2 ad=ustment to a #ield measure0 Sele't 'orre't option: Cost of de(t Cost of preferred sto'" Cost of 'ommon e,uit# Cost of retained earnin-s Question # 9 of 15 ( Start time: 12:1;:51 AM !otal Mar"s: 1 .%at is differen'e (et$een s%ares and (onds0 Sele't 'orre't option: ?onds are representin- o$ners%ip $%ereas s%ares are not Composed & Solved

S%ares are representin- o$ners%ip $%ereas (onds are not S%ares and (onds (ot% represent e,uit# S%ares and (ond (ot% represent lia(ilities Question # 10 of 15 ( Start time: 12:15:1; AM !otal Mar"s: 1 .%i'% of t%e follo$in-s e2pressed t%e proposition t%at t%e 'ost of e,uit# is a positive linear fun'tion of 'apital stru'ture0 Sele't 'orre't option: !%e Capital Asset 9ri'in- Model M&M 9roposition 1 M&M 9roposition 11 !%e *a$ of @ne 9ri'e Question # 11 of 15 ( Start time: 12:15:55 AM !otal Mar"s: 1 !%e 'urrent #ield on a (ond is e,ual to &&&&&&&&) Sele't 'orre't option: Annual interest divided (# t%e 'urrent mar"et pri'e !%e #ield to maturit# Annual interest divided (# t%e par value !%e internal rate of return Question # 12 of 15 ( Start time: 12:18:40 AM !otal Mar"s: 1 .%en a (ond $ill sell at a dis'ount0 Sele't 'orre't option: !%e 'oupon rate is -reater t%an t%e 'urrent #ield and t%e 'urrent #ield is -reater t%an #ield to maturit# !%e 'oupon rate is -reater t%an #ield to maturit# !%e 'oupon rate is less t%an t%e 'urrent #ield and t%e 'urrent #ield is -reater t%an t%e #ield to maturit# !%e 'oupon rate is less t%an t%e 'urrent #ield and t%e 'urrent #ield is less t%an #ield to maturit# Question # 13 of 15 ( Start time: 12:19:15 AM !otal Mar"s: 1 .%i'% of t%e follo$informulas represents a 'orre't 'al'ulation of t%e de-ree of operatinlevera-e0 Sele't 'orre't option: (Q 6 Q?+ AQ Composed & Solved

(+?1! A (+?1! 6 >C BQ(96C D >CE ABQ(96C E Q(96C A BQ(96C 6 >CE Question # 14 of 15 ( Start time: 12:19:31 AM !otal Mar"s: 1 .%at are t%e Fire't 'laim se'urities0 Sele't 'orre't option: !%e se'urities $%ose value depends on t%e 'as% flo$s -enerated (# t%e underl#in- assets !%e se'urities $%ose value depends on t%e value of t%e underl#in- assets !%e se'urities t%at do not dire'tl# -enerate an# returns for its investors All of t%e -iven options Question # 15 of 15 ( Start time: 12:20:1; AM !otal Mar"s: 1 Companies and individuals runnin- different t#pes of (usinesses %ave to ma"e t%e '%oi'es of t%e asset a''ordin- to $%i'% of t%e follo$in-0 Sele't 'orre't option: *ife span of t%e pro=e't Cost of t%e 'apital 8eturn on asset 7one of t%e -iven options Question # 2 of 15 ( Start time: 12:31:43 AM !otal Mar"s: 1 1n t%e dividend dis'ount model/ _____ $%i'% of t%e follo$in- are not in'orporated into t%e dis'ount rate0 Sele't 'orre't option: 8eal ris"6free rate 8is" premium for sto'"s 8eturn on assets +2pe'ted inflation rate Question # 3 of 15 ( Start time: 12:32:15 AM !otal Mar"s: 1 .%i'% of t%e follo$in- 'ould 7@! (e defined as t%e 'apital stru'ture of t%e Compan#0 Sele't 'orre't option: !%e firmGs mi2 of Assets and lia(ilities !%e firmGs 'ommon sto'"s onl# !%e firmGs de(t6e,uit# ratio All of t%e -iven options Composed & Solved

Question # 4 of 15 ( Start time: 12:32:41 AM !otal Mar"s: 1 An impli'it 'ost of addinde(t to t%e 'apital stru'ture is t%at it: Sele't 'orre't option: Adds interest e2pense to t%e operatin- statement 1n'reases t%e re,uired return on e,uit# 8edu'es t%e e2pe'ted return on assets Fe'reases t%e firmGs (eta Question # 5 of 15 ( Start time: 12:33:05 AM !otal Mar"s: 1 .%# 'ommon sto'" of a 'ompan# must provide a %i-%er e2pe'ted return t%an t%e de(t of t%e same 'ompan#0 Sele't 'orre't option: !%ere is less demand for sto'" t%an for (onds !%ere is -reater demand for sto'" t%an for (onds !%ere is more s#stemati' ris" involved for t%e 'ommon sto'" !%ere is a mar"et premium re,uired for (onds Question # ; of 15 ( Start time: 12:33:38 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! an e2ample of %#(rid e,uit# Sele't 'orre't option: Converti(le ?onds Converti(le Fe(enture Common s%ares 9referred s%ares Question # 5 of 15 ( Start time: 12:34:11 AM !otal Mar"s: 1 A set of possi(le values t%at a random varia(le 'an assume and t%eir asso'iated pro(a(ilities of o''urren'e are referred to as ________) Sele't 'orre't option: 9ro(a(ilit# distri(ution !%e e2pe'ted return !%e standard deviation Coeffi'ient of variation Question # 8 of 15 ( Start time: 12:34:40 AM !otal Mar"s: 1 .%i'% if t%e follo$in- is (are true0 1) !%e dividend -ro$t% model %olds if/ at some point Composed & Solved

in time/ t%e dividend -ro$t% rate e2'eeds t%e sto'"Hs re,uired return) 11) A de'rease in t%e dividend -ro$t% rate $ill in'rease a sto'"Hs mar"et value/ all else t%e same) 111) An in'rease in t%e re,uired return on a sto'" $ill de'rease its mar"et value/ all else t%e same) Sele't 'orre't option: 1/ 11/ and 111 1 onl# 111 onl# 11 and 111 onl# Question # 9 of 15 ( Start time: 12:35:13 AM !otal Mar"s: 1 1f 2 sto'"s move in t%e same dire'tion to-et%er t%en $%at $ill (e t%e 'orrelation 'oeffi'ient0 Sele't 'orre't option: 0 1)0 61)0 1)5 Question # 10 of 15 ( Start time: 12:35:38 AM !otal Mar"s: 1 !otal portfolio ris" is ________) Sele't 'orre't option: +,ual to s#stemati' ris" plus non6diversifia(le ris" +,ual to avoida(le ris" plus diversifia(le ris" +,ual to s#stemati' ris" plus unavoida(le ris" +,ual to s#stemati' ris" plus diversifia(le ris" Question # 11 of 15 ( Start time: 12:3;:02 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is related to t%e use *o$er finan'ial levera-e0 Sele't 'orre't option: >i2ed 'osts Caria(le 'osts Fe(t finan'in- Common e,uit# finan'inQuestion # 12 of 15 ( Start time: 12:3;:28 AM !otal Mar"s: 1 !%e $ei-%ted avera-e of possi(le returns/ $it% t%e $ei-%ts (ein- t%e pro(a(ilities of Composed & Solved

o''urren'e is referred to as ________) Sele't 'orre't option: 9ro(a(ilit# distri(ution +2pe'ted return Standard deviation Coeffi'ient of variation Question # 13 of 15 ( Start time: 12:3;:5; AM !otal Mar"s: 1 !%e value of dire't 'laim se'urit# is derived from $%i'% of t%e follo$in-0 Sele't 'orre't option: >undamental anal#sis :nderl#in- real asset Suppl# and demand of se'urities in t%e mar"et All of t%e -iven options Question # 14 of 15 ( Start time: 12:35:22 AM !otal Mar"s: 1 .%at $ould #ou e2pe't to %appen to t%e pri'e of a s%are of sto'" on t%e da# it -oes e26dividend0 Sele't 'orre't option: !%e pri'e s%ould in'rease (# t%e amount of t%e dividend !%e pri'e s%ould de'rease (# t%e amount of t%e dividend !%e pri'e s%ould de'rease (# one6%alf t%e amount of t%e dividend !%e pri'e s%ould remain 'onstant Question # 15 of 15 ( Start time: 12:38:05 AM !otal Mar"s: 1 .%i'% of t%e follo$in$ould e2press t%e ne-ative net $ort% of a firm0 Sele't 'orre't option: +2perien'in- a (usiness failure 1n le-al (an"rupt'# +2perien'in- te'%ni'al insolven'# +2perien'ina''ountin- insolven'# Question # 1 of 15 ( Start time: 12:43:28 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! t%e t#pe of I#(rid or-aniJations0 Sele't 'orre't option: S6!#pe Corporation Composed & Solved

*imited *ia(ilit# 9artners%ip Sole 9roprietors%ip 9rofessional Corporation Question # 2 of 15 ( Start time: 12:44:1; AM !otal Mar"s: 1 .%i'% of t%e follo$in- 'osts $ould (e 'onsidered a fi2ed 'ost0 Sele't 'orre't option: 8a$ materials Fepre'iation ?ad6 de(t losses 9rodu'tion la(or Question # 3 of 15 ( Start time: 12:44:39 AM !otal Mar"s: 1 .%at is a le-al a-reement/ also 'alled t%e deed of trust/ (et$een t%e 'orporation issuin- (onds and t%e (ond%olders t%at esta(lis% t%e terms of t%e (ond issue0 Sele't 'orre't option: 1ndenture Fe(enture ?ond ?ond trustee Question # 4 of 15 ( Start time: 12:45:03 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is related to t%e use *o$er finan'ial levera-e0 Sele't 'orre't option: >i2ed 'osts Caria(le 'osts Fe(t finan'in- Common e,uit# finan'inQuestion # 5 of 15 ( Start time: 12:45:30 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is similar (et$een 8eturn on investment and 9a#(a'" period te'%ni,ues of Capital (ud-etin-0 Sele't 'orre't option: 1nvolvement of interest rate $%ile ma"in- 'al'ulations Fo not a''ount for time value of mone# !ri'"# and 'ompli'ated met%ods All of t%e -iven options Composed & Solved

Question # ; of 15 ( Start time: 12:45:59 AM !otal Mar"s: 1 .%i'% of t%e follo$instatements re-ardin- 'ovarian'e is 'orre't0 Sele't 'orre't option: Covarian'e al$a#s lies in t%e ran-e 61 to D1 Covarian'e/ (e'ause it involves a s,uared value/ must al$a#s (e a positive num(er (or Jero *o$ 'ovarian'es amon- returns for different se'urities leads to %i-% portfolio ris" Covarian'es 'an ta"e on positive/ ne-ative/ or Jero values Question # 5 of 15 ( Start time: 12:4;:2; AM !otal Mar"s: 1 Io$ dividend #ield on a sto'" is similar to t%e 'urrent #ield on a (ond0 Sele't 'orre't option: ?ot% represent %o$ mu'% ea'% se'urit#Hs pri'e $ill in'rease in a #ear ?ot% represent t%e se'urit#Hs annual in'ome divided (# its pri'e ?ot% are an a''urate representation of t%e total annual return an investor 'an e2pe't to earn (# o$nin- t%e se'urit# ?ot% are ,uarterl# #ields t%at must (e annualiJed Question # 8 of 15 ( Start time: 12:45:14 AM !otal Mar"s: 1 1f 2 sto'"s move in t%e same dire'tion to-et%er t%en $%at $ill (e t%e 'orrelation 'oeffi'ient0 Sele't 'orre't option: 0 1)0 61)0 1)5 Question # 9 of 15 ( Start time: 12:45:38 AM !otal Mar"s: 1 .%i'% of t%e follo$in-s e2pressed t%e proposition t%at t%e 'ost of e,uit# is a positive linear fun'tion of 'apital stru'ture0 Sele't 'orre't option: !%e Capital Asset 9ri'in- Model M&M 9roposition 1 M&M 9roposition 11 !%e *a$ of @ne 9ri'e Composed & Solved

Question # 10 of 15 ( Start time: 12:49:05 AM !otal Mar"s: 1 _______ means e2pandint%e num(er of investments $%i'% 'over different "inds of sto'"s) Sele't 'orre't option: Fiversifi'ation Standard deviation Carian'e Covarian'e Question # 11 of 15 ( Start time: 12:49:41 AM !otal Mar"s: 1 An impli'it 'ost of addinde(t to t%e 'apital stru'ture is t%at it: Sele't 'orre't option: Adds interest e2pense to t%e operatin- statement 1n'reases t%e re,uired return on e,uit# 8edu'es t%e e2pe'ted return on assets Fe'reases t%e firmGs (eta Question # 12 of 15 ( Start time: 12:50:15 AM !otal Mar"s: 1 1n t%e dividend dis'ount model/ _____ $%i'% of t%e follo$in- are not in'orporated into t%e dis'ount rate0 Sele't 'orre't option: 8eal ris"6free rate 8is" premium for sto'"s 8eturn on assets +2pe'ted inflation rate Question # 13 of 15 ( Start time: 12:50:41 AM !otal Mar"s: 1 .%ere t%ere is sin-le period 'apital rationin-/ $%at is t%e most sensi(le $a# of ma"ininvestment de'isions0 Sele't 'orre't option: C%oose all pro=e'ts $it% a positive 79C Kroup pro=e'ts to-et%er to allo'ate t%e funds availa(le and sele't t%e -roup of pro=e'ts $it% t%e %i-%est 79C C%oose t%e pro=e't $it% t%e %i-%est 79C Cal'ulate 188 and sele't t%e pro=e'ts $it% t%e %i-%est 188s Composed & Solved

Question # 14 of 15 ( Start time: 12:51:15 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is not a re'o-niJed approa'% for determinin- t%e 'ost of e,uit#0 Sele't 'orre't option: Fividend dis'ount model approa'% ?efore6ta2 'ost of preferred sto'" plus ris" premium approa'% Capital6asset pri'in- model approa'% ?efore6ta2 'ost of de(t plus ris" premium approa'% Question # 15 of 15 ( Start time: 12:52:03 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e '%ara'teristi' of a $ell diversified portfolio0 Sele't 'orre't option: 1ts mar"et ris" is ne-li-i(le 1ts uns#stemati' ris" is ne-li-i(le 1ts s#stemati' ris" is ne-li-i(le All of t%e -iven options Question # 1 of 15 ( Start time: 12:55:10 AM !otal Mar"s: 1 .%i'% of t%e follo$in- $ould (e 'onsidered a 'as%6flo$ item from an Loperatin-L a'tivit#0 Sele't 'orre't option: Cas% outflo$ to t%e -overnment for ta2es Cas% outflo$ to s%are%olders as dividends Cas% inflo$ to t%e firm from sellin- ne$ 'ommon e,uit# s%ares Cas% outflo$ to pur'%ase (onds issued (# anot%er 'ompan# Question # 2 of 15 ( Start time: 12:55:39 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is an e2ample of restru'turin- t%e firm0 Sele't 'orre't option: Fividends are in'reased from 8s)1 to 8s)2 per s%are A ne$ investment in'reases t%e firmGs (usiness ris" 7e$ e,uit# is issued and t%e pro'eeds repa# de(t A ne$ ?oard of Fire'tors is ele'ted to t%e firm Question # 3 of 15 ( Start time: 12:5;:20 AM !otal Mar"s: 1 !%e 8?S pa#s 5);0M/ 'ompounded dail# ((ased on 3;0 da#s / on a 96mont% 'ertifi'ate of deposit/ if #ou deposit 8s)20/ 000 #ou $ould e2pe't to earn around ________ in interest) Sele't 'orre't option: Composed & Solved

8s)840 8s)858 8s)1/032 8s)1/121 Question # 4 of 15 ( Start time: 12:5;:54 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is related to t%e use *o$er finan'ial levera-e0 Sele't 'orre't option: >i2ed 'osts Caria(le 'osts Fe(t finan'in- Common e,uit# finan'inQuestion # 5 of 15 ( Start time: 12:55:23 AM !otal Mar"s: 1 :pon $%i'% of t%e follo$in- a firmGs de-ree of operatinlevera-e (F@* depends primaril#0 Sele't 'orre't option: Sales varia(ilit# *evel of fi2ed operatin- 'osts Closeness to its operatin- (rea"6even point Fe(t6to6 e,uit# ratio Question # ; of 15 ( Start time: 12:55:53 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e 'as% re,uired durin- a spe'ifi' period to meet interest e2penses and prin'ipal pa#ments0 Sele't 'orre't option: Fe(t 'apa'it# Fe(t6servi'e (urden Ade,ua'# 'apa'it# >i2ed6'%ar-e (urden Question # 5 of 15 ( Start time: 12:58:21 AM !otal Mar"s: 1 ______ are also "no$n as Spontaneous >inan'in-) Sele't 'orre't option: Current lia(ilities Current assets Composed & Solved

>i2ed assets *on-6term lia(ilities Question # 8 of 15 ( Start time: 12:58:48 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! t%e t#pe of I#(rid or-aniJations0 Sele't 'orre't option: S6!#pe Corporation *imited *ia(ilit# 9artners%ip Sole 9roprietors%ip 9rofessional Corporation Question # 9 of 15 ( Start time: 12:59:12 AM !otal Mar"s: 1 .%i'% of t%e follo$in- fa'tors mi-%t affe't sto'" returns0 Sele't 'orre't option: ?usiness '#'le 1nterest rate flu'tuations 1nflation rates All of t%e a(ove Question # 10 of 15 ( Start time: 12:59:35 AM !otal Mar"s: 1 .%i'% of t%e follo$in- isAare t%e '%ara'teristi'(s of 9erpetuit#0 Sele't 'orre't option: 1t is an annuit# 1t %as no definite end 1t is a 'onstant stream of identi'al 'as% flo$s All of t%e -iven options Question # 11 of 15 ( Start time: 01:00:09 AM !otal Mar"s: 1 A 'apital (ud-etinte'%ni,ue t%rou-% $%i'% dis'ount rate e,uates t%e present value of t%e future net 'as% flo$s from an investment pro=e't $it% t%e pro=e'tHs initial 'as% outflo$ is "no$n as: Sele't 'orre't option: 9a#(a'" period 1nternal rate of return 7et present value 9rofita(ilit# inde2 Composed & Solved

Question # 12 of 15 ( Start time: 01:00:45 AM !otal Mar"s: 1 C%oose amon- t%e follo$in-s/ t%e 'orre't statement re-ardin- ever# =ournal entr#) Sele't 'orre't option: Sum of Fe(its N Sum of Credits Sum of Fe(its OSum of Credits Sum of Fe(its P Sum of Credits 7one of t%e -iven options Question # 13 of 15 ( Start time: 01:01:11 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! a 'as% outflo$ for t%e firm0 Sele't 'orre't option: Fepre'iation Fividends 1nterest !a2es Question # 14 of 15 ( Start time: 01:01:42 AM !otal Mar"s: 1 .%i'% of t%e follo$informula relates (eta of t%e sto'" to t%e standard deviation0 Sele't 'orre't option: Covarian'e of sto'" $it% mar"et Q varian'e of t%e mar"et Covarian'e of sto'" $it% mar"et A varian'e of t%e mar"et Carian'e of t%e mar"et A Covarian'e of sto'" $it% mar"et Slope of t%e re-ression line Question # 15 of 15 ( Start time: 01:02:44 AM !otal Mar"s: 1 .%i'% of t%e follo$in- isAare t%e 'omponent(s of $or"in- 'apital mana-ement0 Sele't 'orre't option: Current assets >i2ed assets >i2ed assets and lon-6term lia(ilities Current assets and 'urrent lia(ilities Question # 1 of 15 ( Start time: 01:08:11 AM !otal Mar"s: 1 .%ere t%ere is sin-le period 'apital rationin-/ $%at is t%e most sensi(le $a# of ma"ininvestment de'isions0 Sele't 'orre't option: Composed & Solved

C%oose all pro=e'ts $it% a positive 79C Kroup pro=e'ts to-et%er to allo'ate t%e funds availa(le and sele't t%e -roup of pro=e'ts $it% t%e %i-%est 79C C%oose t%e pro=e't $it% t%e %i-%est 79C Cal'ulate 188 and sele't t%e pro=e'ts $it% t%e %i-%est 188s Question # 2 of 15 ( Start time: 01:08:30 AM !otal Mar"s: 1 .%i'% of t%e follo$in- affe'ts pri'e of t%e (ond0 Sele't 'orre't option: Mar"et interest rate 8e,uired rate of return 1nterest rate ris" All of t%e -iven options Question # 3 of 15 ( Start time: 01:09:0; AM !otal Mar"s: 1 .%# a sin-le/ overall 'ost of 'apital is often used to evaluate pro=e'ts0 Sele't 'orre't option: 1t avoids t%e pro(lem of 'omputin- t%e re,uired rate of return for ea'% investment 9roposal 1t is t%e onl# $a# to measure a firmGs re,uired return 1t a'"no$led-es t%at most ne$ investment pro=e'ts %ave a(out t%e same de-ree of ris" 1t a'"no$led-es t%at most ne$ investment pro=e'ts offer a(out t%e same e2pe'ted return Question # 4 of 15 ( Start time: 01:10:30 AM !otal Mar"s: 1 Se'urit# mar"et line -ives t%e relations%ip (et$een _____ and _______) Sele't 'orre't option: Mar"et ris" and t%e re,uired return S#stemati' ris" and t%e re,uired return 7on6diversified ris" and t%e re,uired return All of t%e -iven options Question # 5 of 15 ( Start time: 01:11:00 AM !otal Mar"s: 1 A(ove t%e (rea"even +?1!/ in'reased finan'ial levera-e $ill ________ +9S/ all else t%e same) Assume t%ere are no ta2es Sele't 'orre't option: 1n'rease Fe'rease Composed & Solved

+it%er in'rease or de'rease 7one of t%e -iven options Question # ; of 15 ( Start time: 01:11:40 AM !otal Mar"s: 1 A 'ompan# $%ose sto'" is sellin- at a 9A+ ratio -reater t%an t%e 9A+ ratio of a mar"et inde2 most li"el# %as _______) Sele't 'orre't option: An anti'ipated earnin-s -ro$t% rate $%i'% is less t%an t%at of t%e avera-e firm A dividend #ield $%i'% is less t%an t%at of t%e avera-e firm *ess predi'ta(le earnin-s -ro$t% t%an t%at of t%e avera-e firm Kreater '#'li'alit# of earnin-s -ro$t% t%an t%at of t%e avera-e firm Question # 5 of 15 ( Start time: 01:12:59 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e 'as% re,uired durin- a spe'ifi' period to meet interest e2penses and prin'ipal pa#ments0 Sele't 'orre't option: Fe(t 'apa'it# Fe(t6servi'e (urden Ade,ua'# 'apa'it# >i2ed6'%ar-e (urden Question # 8 of 15 ( Start time: 01:13:54 AM !otal Mar"s: 1 ______ are also "no$n as Spontaneous >inan'in-) Sele't 'orre't option: Current lia(ilities Current assets >i2ed assets *on-6term lia(ilities Question # 9 of 15 ( Start time: 01:14:29 AM !otal Mar"s: 1 .%en ta2es are 'onsidered/ t%e value of a levered firm e,uals t%e value of t%e& _____) Sele't 'orre't option: :nlevered firm :nlevered firm plus t%e value of t%e de(t :nlevered firm plus t%e present value of t%e ta2 s%ield :nlevered firm plus t%e value of t%e de(t plus t%e value of t%e ta2 s%ield Composed & Solved

Question # 10 of 15 ( Start time: 01:14:58 AM !otal Mar"s: 1 !%e ________ t%e 'oeffi'ient of variation ______ t%e relative ris" of t%e investment) Sele't 'orre't option: *ar-er< *ar-er *ar-er< Smaller Smaller< *ar-er Smaller< Smaller Question # 11 of 15 ( Start time: 01:15:20 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! a 'as% outflo$ for t%e firm0 Sele't 'orre't option: Fepre'iation Fividends 1nterest !a2es Question # 12 of 15 ( Start time: 01:15:39 AM !otal Mar"s: 1 .%i'% of t%e follo$in- 'osts $ould (e 'onsidered a fi2ed 'ost0 Sele't 'orre't option: 8a$ materials Fepre'iation ?ad6 de(t losses 9rodu'tion la(or Question # 13 of 15 ( Start time: 01:1;:04 AM !otal Mar"s: 1 Consider t$o (onds/ A and ?) ?ot% (onds presentl# are sellin- at t%eir par value of 8s) 1/000) +a'% pa#s interest of 8s) 120 annuall#) ?ond A $ill mature in 5 #ears $%ile (ond ? $ill mature in ; #ears) 1f t%e #ields to maturit# on t%e t$o (onds '%an-e from 12M to 10M/ __________) Sele't 'orre't option: ?ot% (onds $ill in'rease in value/ (ut (ond A $ill in'rease more t%an (ond ? ?ot% (onds $ill in'rease in value/ (ut (ond ? $ill in'rease more t%an (ond A ?ot% (onds $ill de'rease in value/ (ut (ond A $ill de'rease more t%an (ond ? ?ot% (onds $ill de'rease in value/ (ut (ond ? $ill de'rease more t%an (ond A Question # 14 of 15 ( Start time: 01:1;:51 AM !otal Mar"s: 1 Coeffi'ient of variation is 7@! t%e measure of ________) Composed & Solved

Sele't 'orre't option: 8is" 9ro(a(ilit# 8elative dispersion 8is" per unit of e2pe'ted return Question # 15 of 15 ( Start time: 01:18:02 AM !otal Mar"s: 1 !%e value of a (ond is dire'tl# derived from $%i'% of t%e follo$in-0 Sele't 'orre't option: Cas% flo$s Coupon re'eipts 9ar re'over# at maturit# All of t%e -iven options Question # 1 of 15 ( Start time: 01:20:44 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is as +?1!0 Sele't 'orre't option: >unds provided (# operations +arnin-s (efore ta2es 7et in'ome @peratin- profit Question # 2 of 15 ( Start time: 01:21:10 AM !otal Mar"s: 1 .%at is t%e differen'e (et$een e'onomi' profit and a''ountin- profit0 Sele't 'orre't option: +'onomi' profit in'ludes a '%ar-e for all providers of 'apital $%ile a''ountin- profit in'ludes onl# a '%ar-e for de(t +'onomi' profit 'overs t%e profit over t%e life of t%e firm/ $%ile a''ountin- profit onl# 'overs t%e most re'ent a''ountin- period A''ountin- profit is (ased on 'urrent a''epted a''ountin- rules $%ile e'onomi' profit is (ased on 'as% flo$s All of t%e -iven options are 'orre't Question # 3 of 15 ( Start time: 01:21:52 AM !otal Mar"s: 1 !%e overall ($ei-%ted avera-e 'ost of 'apital is 'omposed of $ei-%ted avera-es of $%i'% of t%e follo$in-0 Sele't 'orre't option: Composed & Solved

!%e 'ost of 'ommon e,uit# and t%e 'ost of de(t !%e 'ost of 'ommon e,uit# and t%e 'ost of preferred sto'" !%e 'ost of preferred sto'" and t%e 'ost of de(t !%e 'ost of 'ommon e,uit#/ t%e 'ost of preferred sto'"/ and t%e 'ost of de(t Question # 4 of 15 ( Start time: 01:22:32 AM !otal Mar"s: 1 .%i'% of t%e follo$in- refers to (rin-in- t%e future 'as% flo$ to t%e present time0 Sele't 'orre't option: 7et present value Fis'ountin- @pportunit# 'ost 1nternal rate of return Question # 5 of 15 ( Start time: 01:23:0; AM !otal Mar"s: 1 .%at is t%e traditional approa'% to$ards t%e valuation of a 'ompan#0 Sele't 'orre't option: !%e 'ost of 'apital is independent of t%e 'apital stru'ture of t%e firm !%e firm maintains 'onstant ris" re-ardless of t%e t#pe of finan'in- emplo#ed !%ere e2ists no optimal 'apital stru'ture !%at mana-ement 'an in'rease t%e total value of t%e firm t%rou-% t%e =udi'ious use of finan'ial levera-e Question # ; of 15 ( Start time: 01:24:32 AM !otal Mar"s: 1 Se'urit# mar"et line -ives t%e relations%ip (et$een _____ and _______) Sele't 'orre't option: Mar"et ris" and t%e re,uired return S#stemati' ris" and t%e re,uired return 7on6diversified ris" and t%e re,uired return All of t%e -iven options Question # 5 of 15 ( Start time: 01:25:02 AM !otal Mar"s: 1 7ominal 1nterest 8ate is also "no$n as: Sele't 'orre't option: +ffe'tive interest 8ate Annual per'enta-e rate Composed & Solved

9eriodi' interest rate 8e,uired interest rate Question # 8 of 15 ( Start time: 01:25:39 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is related to t%e use *o$er finan'ial levera-e0 Sele't 'orre't option: >i2ed 'osts Caria(le 'osts Fe(t finan'in- Common e,uit# finan'inQuestion # 9 of 15 ( Start time: 01:2;:10 AM !otal Mar"s: 1 .%at is t%e e2pe'ted return of a Jero6(eta se'urit#0 Sele't 'orre't option: !%e ris"6free rate Rero rate of return A ne-ative rate of return !%e mar"et rate of return Question # 10 of 15 ( Start time: 01:25:19 AM !otal Mar"s: 1 .%at is #ield to maturit# on a (ond0 Sele't 'orre't option: ?elo$ t%e 'oupon rate $%en t%e (ond sells at a dis'ount/ and e,ual to t%e 'oupon rate $%en t%e (ond sells at a premium !%e dis'ount rate t%at $ill set t%e present value of t%e pa#ments e,ual to t%e (ond pri'e ?ased on t%e assumption t%at an# pa#ments re'eived are reinvested at t%e 'oupon rate 7one of t%e a(ove Question # 11 of 15 ( Start time: 01:25:48 AM !otal Mar"s: 1 .%at is t%e present value of 8s)8/000 to (e paid at t%e end of t%ree #ears if interest rate is 11M0 Sele't 'orre't option: 8s);/015 8s)4/852 8s);/525 8s)1/842 Composed & Solved

Question # 12 of 15 ( Start time: 01:28:08 AM !otal Mar"s: 1 ______ is paid (# 'ompanies $it% lo$er -rade (onds li"e CC or C ratin-s) Sele't 'orre't option: Fefault ris" premium Soverei-n 8is" 9remium Mar"et ris" premium Maturit# ris" premium Question # 13 of 15 ( Start time: 01:28:43 AM !otal Mar"s: 1 1f $e $ere to in'rease A?C 'ompan# 'ost of e,uit# assumption/ $%at $ould $e e2pe't to %appen to t%e present value of all future 'as% flo$s0 Sele't 'orre't option: An in'rease A de'rease 7o '%an-e 1n'omplete information Question # 14 of 15 ( Start time: 01:29:35 AM !otal Mar"s: 1 1n t%e dividend dis'ount model/ _____ $%i'% of t%e follo$in- are not in'orporated into t%e dis'ount rate0 Sele't 'orre't option: 8eal ris"6free rate 8is" premium for sto'"s 8eturn on assets +2pe'ted inflation rate Question # 15 of 15 ( Start time: 01:29:53 AM !otal Mar"s: 1 .%at t#pe of lon-6term finan'in- most li"el# %as t%e follo$in- features: 1 it %as an infinite life/ 2 it pa#s dividends/ and 3 its 'as% flo$s are e2pe'ted to (e a 'onstant annuit# stream0 Sele't 'orre't option: *on-6term de(t 9referred sto'" Common sto'" 7one of t%e -iven options Composed & Solved

Question # 1 of 15 ( Start time: 01:33:00 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is related to t%e use *o$er finan'ial levera-e0 Sele't 'orre't option: >i2ed 'osts Caria(le 'osts Fe(t finan'in- Common e,uit# finan'inQuestion # 2 of 15 ( Start time: 01:33:23 AM !otal Mar"s: 1 A 56#ear ordinar# annuit# %as a present value of 8s)1/000) 1f t%e interest rate is 8 per'ent/ t%e amount of ea'% annuit# pa#ment is 'losest to $%i'% of t%e follo$in-0 Sele't 'orre't option: 8s) 250)44 8s) 231)91 8s)181);2 8s)184)08 Question # 3 of 15 ( Start time: 01:33:49 AM !otal Mar"s: 1 A set of possi(le values t%at a random varia(le 'an assume and t%eir asso'iated pro(a(ilities of o''urren'e are referred to as ________) Sele't 'orre't option: 9ro(a(ilit# distri(ution !%e e2pe'ted return !%e standard deviation Coeffi'ient of variation Question # 4 of 15 ( Start time: 01:34:15 AM !otal Mar"s: 1 >or most firms/ 9A+ ratios and ris"&______) Sele't 'orre't option: .ill (e dire'tl# related .ill %ave an inverse relations%ip .ill (e unrelated 7one of t%e a(ove) Question # 5 of 15 ( Start time: 01:34:43 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e e2pe'ted 'as% dividend t%at is normall# paid to s%are%olders0 Composed & Solved

Sele't 'orre't option: Sto'" split Sto'" dividend +2tra dividend 8e-ular dividend Question # ; of 15 ( Start time: 01:35:25 AM !otal Mar"s: 1 1n 'al'ulatin- t%e 'osts of t%e individual 'omponents of a firmGs finan'in-/ t%e 'orporate ta2 rate is important to $%i'% of t%e follo$in- 'omponent 'ost formulas0 Sele't 'orre't option: Common sto'" Fe(t 9referred sto'" 7one of t%e a(ove Question # 5 of 15 ( Start time: 01:35:55 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! an e2ample of a finan'ial intermediar#0 Sele't 'orre't option: .is'onsin S&*/ a savin-s and loan asso'iation Stron- Capital Appre'iation/ a mutual fund Mi'rosoft Corporation/ a soft$are firm Colle-e Credit/ a 'redit union Question # 8 of 15 ( Start time: 01:3;:18 AM !otal Mar"s: 1 .%i'% of t%e follo$instipulate a relations%ip (et$een e2pe'ted return and ris"0 Sele't 'orre't option: A9! stipulates CA9M stipulates ?ot% CA9M and A9! stipulate 7eit%er CA9M nor A9! stipulate Question # 9 of 15 ( Start time: 01:3;:35 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is related to t%e use *o$er finan'ial levera-e0 Sele't 'orre't option: >i2ed 'osts Caria(le 'osts Composed & Solved

Fe(t finan'in- Common e,uit# finan'inQuestion # 10 of 15 ( Start time: 01:3;:59 AM !otal Mar"s: 1 Io$ LS%are%older $ealt%L is represented in a firm0 Sele't 'orre't option: !%e num(er of people emplo#ed in t%e firm !%e (oo" value of t%e firmGs assets less t%e (oo" value of its lia(ilities !%e mar"et pri'e per s%are of t%e firmGs 'ommon sto'" !%e amount of salar# paid to its emplo#ees Question # 11 of 15 ( Start time: 01:35:30 AM !otal Mar"s: 1 !%e sto'" in #our portfolio $as sellin- for 8s)40 per s%are #esterda#/ (ut %as toda# de'lared a t%ree for t$o split) .%i'% of t%e follo$instatements seems to (e true0 Sele't 'orre't option: !%ere $ill (e t$o6t%irds as man# s%ares outstandin-/ and t%e# $ill sell for 8s);0)00 ea'% !%ere $ill (e four times as man# s%ares outstandin-/ and t%e# $ill sell for 8s)1;0)00 ea'% !%ere $ill (e 50 per'ent more s%ares outstandin- and t%e# $ill sell for 8s)2;);5 ea'% !%ere $ill (e one6and6one6%alf times as man# s%ares outstandin-/ and t%e# $ill sell for 8s);0)00 ea'% Question # 12 of 15 ( Start time: 01:38:15 AM !otal Mar"s: 1 .%i'% of t%e follo$in- refers to (rin-in- t%e future 'as% flo$ to t%e present time0 Sele't 'orre't option: 7et present value Fis'ountin- @pportunit# 'ost 1nternal rate of return Question # 13 of 15 ( Start time: 01:38:41 AM !otal Mar"s: 1 >or $%i'% of t%e follo$in'osts is it -enerall# ne'essar# to appl# a ta2 ad=ustment to a #ield measure0 Sele't 'orre't option: Cost of de(t Cost of preferred sto'" Composed & Solved

Cost of 'ommon e,uit# Cost of retained earnin-s Question # 14 of 15 ( Start time: 01:39:15 AM !otal Mar"s: 1 Io$ t%e (eta of t%e sto'" 'ould (e 'al'ulated0 Sele't 'orre't option: ?# monitorin- pri'e of t%e sto'" ?# monitorinrate of return of t%e sto'" ?# 'omparin- t%e '%an-es in t%e sto'" mar"et pri'e to t%e '%an-es in t%e sto'" mar"et inde2 All of t%e -iven options Question # 15 of 15 ( Start time: 01:39:42 AM !otal Mar"s: 1 .%i'% of t%e follo$in- refers to t%e 'ost of ta"in- up one option $%ile sa'rifi'in- t%e ot%er0 Sele't 'orre't option: @pportunit# 'ost @peratin- 'ost Sun" 'ost >loatation 'ost Question # 1 of 15 ( Start time: 01:41:55 AM !otal Mar"s: 1 :pon $%i'% of t%e follo$in- a firmGs de-ree of operatinlevera-e (F@* depends primaril#0 Sele't 'orre't option: Sales varia(ilit# *evel of fi2ed operatin- 'osts Closeness to its operatin- (rea"6even point Fe(t6to6 e,uit# ratio Question # 2 of 15 ( Start time: 01:42:44 AM !otal Mar"s: 1 .%at $ould #ou e2pe't to %appen to t%e pri'e of a s%are of sto'" on t%e da# it -oes e26dividend0 Sele't 'orre't option: !%e pri'e s%ould in'rease (# t%e amount of t%e dividend !%e pri'e s%ould de'rease (# t%e amount of t%e dividend !%e pri'e s%ould de'rease (# one6%alf t%e amount of t%e dividend Composed & Solved

!%e pri'e s%ould remain 'onstant Question # 3 of 15 ( Start time: 01:43:30 AM !otal Mar"s: 1 !%e overall ($ei-%ted avera-e 'ost of 'apital is 'omposed of $ei-%ted avera-es of $%i'% of t%e follo$in-0 Sele't 'orre't option: !%e 'ost of 'ommon e,uit# and t%e 'ost of de(t !%e 'ost of 'ommon e,uit# and t%e 'ost of preferred sto'" !%e 'ost of preferred sto'" and t%e 'ost of de(t !%e 'ost of 'ommon e,uit#/ t%e 'ost of preferred sto'"/ and t%e 'ost of de(t Question # 4 of 15 ( Start time: 01:44:11 AM !otal Mar"s: 1 .%i'% of t%e follo$instipulate a relations%ip (et$een e2pe'ted return and ris"0 Sele't 'orre't option: A9! stipulates CA9M stipulates ?ot% CA9M and A9! stipulate 7eit%er CA9M nor A9! stipulate Question # 5 of 15 ( Start time: 01:44:3; AM !otal Mar"s: 1 .%i'% of t%e follo$informulas represents a 'orre't 'al'ulation of t%e de-ree of operatinlevera-e0 Sele't 'orre't option: (Q 6 Q?+ AQ (+?1! A (+?1! 6 >C BQ(96C D >CE ABQ(96C E Q(96C A BQ(96C 6 >CE Question # ; of 15 ( Start time: 01:45:03 AM !otal Mar"s: 1 _______ means e2pandin- t%e num(er of investments $%i'% 'over different "inds of sto'"s) Sele't 'orre't option: Fiversifi'ation Standard deviation Carian'e Covarian'e Composed & Solved

Question # 5 of 15 ( Start time: 01:45:28 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is related to t%e use of %i-%er operatinlevera-e0 Sele't 'orre't option: >i2ed 'osts Caria(le 'osts Fe(t finan'in- Common e,uit# finan'in- Question # 8 of 15 ( Start time: 01:4;:01 AM !otal Mar"s: 1 7ominal 1nterest 8ate is also "no$n as: Sele't 'orre't option: +ffe'tive interest 8ate Annual per'enta-e rate 9eriodi' interest rate 8e,uired interest rate Question # 9 of 15 ( Start time: 01:4;:25 AM !otal Mar"s: 1 .%i'% statement is 7@! true re-ardin- t%e mar"et portfolio0 Sele't 'orre't option: 1t in'ludes all pu(li'l# traded finan'ial assets 1t is t%e tan-en'# point (et$een t%e 'apital mar"et line and t%e indifferen'e 'urve All se'urities in t%e mar"et portfolio are %eld in proportion to t%eir mar"et values 1t lies on t%e effi'ient frontier Question # 10 of 15 ( Start time: 01:45:18 AM !otal Mar"s: 1 .%o determine t%e mar"et pri'e of a s%are of 'ommon sto'"0 Sele't 'orre't option: !%e (oard of dire'tors of t%e firm !%e sto'" e2'%an-e on $%i'% t%e sto'" is listed !%e president of t%e 'ompan# 1ndividuals (u#in- and sellin- t%e sto'" Question # 11 of 15 ( Start time: 01:45:53 AM !otal Mar"s: 1 Companies and individuals runnin- different t#pes of (usinesses %ave to ma"e t%e '%oi'es of t%e asset a''ordin- to $%i'% of t%e follo$in-0 Sele't 'orre't option: Composed & Solved

*ife span of t%e pro=e't Cost of t%e 'apital 8eturn on asset 7one of t%e -iven options Question # 12 of 15 ( Start time: 01:48:19 AM !otal Mar"s: 1 .%en t%e Jero 'oupon (ond approa'%es to its maturit#/ t%e mar"et value of t%e (ond approa'%es to $%i'% of t%e follo$in-0 Sele't 'orre't option: 1ntrinsi' value ?oo" value 9ar value Iistori' 'ost Question # 13 of 15 ( Start time: 01:48:54 AM !otal Mar"s: 1 .%i'% of t%e follo$in- $ould e2press t%e ne-ative net $ort% of a firm0 Sele't 'orre't option: +2perien'in- a (usiness failure 1n le-al (an"rupt'# +2perien'in- te'%ni'al insolven'# +2perien'in- a''ountin- insolven'# Question # 14 of 15 ( Start time: 01:49:35 AM !otal Mar"s: 1 1f sto'" is a part of totall# diversified portfolio t%en its 'ompan# ris" must (e e,ual to: Sele't 'orre't option: 0 0)5 1 61 Question # 15 of 15 ( Start time: 01:50:30 AM !otal Mar"s: 1 C%oose amon- t%e follo$in-s/ t%e 'orre't statement re-ardin- ever# =ournal entr#) Sele't 'orre't option: Sum of Fe(its N Sum of Credits Sum of Fe(its OSum of Credits Sum of Fe(its P Sum of Credits 7one of t%e -iven options Composed & Solved

Question # 1 of 15 ( Start time: 01:51:32 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e 'as% re,uired durin- a spe'ifi' period to meet interest e2penses and prin'ipal pa#ments0 Sele't 'orre't option: Fe(t 'apa'it# Fe(t6servi'e (urden Ade,ua'# 'apa'it# >i2ed6'%ar-e (urden Question # 2 of 15 ( Start time: 01:51:59 AM !otal Mar"s: 1 7ominal 1nterest 8ate is also "no$n as: Sele't 'orre't option: +ffe'tive interest 8ate Annual per'enta-e rate 9eriodi' interest rate 8e,uired interest rate Question # 3 of 15 ( Start time: 01:52:42 AM !otal Mar"s: 1 !%e sto'" in #our portfolio $as sellin- for 8s)40 per s%are #esterda#/ (ut %as toda# de'lared a t%ree for t$o split) .%i'% of t%e follo$instatements seems to (e true0 Sele't 'orre't option: !%ere $ill (e t$o6t%irds as man# s%ares outstandin-/ and t%e# $ill sell for 8s);0)00 ea'% !%ere $ill (e four times as man# s%ares outstandin-/ and t%e# $ill sell for 8s)1;0)00 ea'% !%ere $ill (e 50 per'ent more s%ares outstandin- and t%e# $ill sell for 8s)2;);5 ea'% !%ere $ill (e one6and6one6%alf times as man# s%ares outstandin-/ and t%e# $ill sell for 8s);0)00 ea'% Question # 4 of 15 ( Start time: 01:53:4; AM !otal Mar"s: 1 .%at is differen'e (et$een s%ares and (onds0 Sele't 'orre't option: ?onds are representin- o$ners%ip $%ereas s%ares are not S%ares are representin- o$ners%ip $%ereas (onds are not S%ares and (onds (ot% represent e,uit# S%ares and (ond (ot% represent lia(ilities Question # 5 of 15 ( Start time: 01:55:15 AM !otal Mar"s: 1 Composed & Solved

Se'urit# mar"et line -ives t%e relations%ip (et$een &&&&&&& and &&&&&&&&&) Sele't 'orre't option: Mar"et ris" and t%e re,uired return S#stemati' ris" and t%e re,uired return 7on6diversified ris" and t%e re,uired return All of t%e -iven options Question # ; of 15 ( Start time: 01:55:52 AM !otal Mar"s: 1 1f $e invest in man# se'urities $%i'% are &&&&&&&&to ea'% ot%er t%en it is possi(le to redu'e overall ris" for #our investment) Sele't 'orre't option: Compara(le Correlated Ii-%l# 'orrelated 7e-ativel# 'orrelated Question # 5 of 15 ( Start time: 01:58:38 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e -eneral assumption of 9er'ent of Sales >ore'astin-0 Sele't 'orre't option: Current Assets usuall# -ro$ in proportion to 8evenues Current Assets usuall# -ro$ in proportion to +2penses Current Assets usuall# -ro$ in proportion to *ia(ilities Current Assets usuall# -ro$ in proportion to Sales Question # 8 of 15 ( Start time: 01:59:22 AM !otal Mar"s: 1 .%i'% of t%e follo$in- isAare t%e 'omponent(s of $or"in- 'apital mana-ement0 Sele't 'orre't option: Current assets >i2ed assets >i2ed assets and lon-6term lia(ilities Current assets and 'urrent lia(ilities Question # 9 of 15 ( Start time: 01:59:52 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is not a re'o-niJed approa'% for determinin- t%e 'ost of e,uit#0 Sele't 'orre't option: Fividend dis'ount model approa'% Composed & Solved

?efore6ta2 'ost of preferred sto'" plus ris" premium approa'% Capital6asset pri'in- model approa'% ?efore6ta2 'ost of de(t plus ris" premium approa'% Question # 10 of 15 ( Start time: 02:00:32 AM !otal Mar"s: 1 .%en 1nvestors $ant %i-% plo$(a'" ratios0 Sele't 'orre't option: .%enever 8@+ O " .%enever " O 8@+ @nl# $%en t%e# are in lo$ ta2 (ra'"ets .%enever (an" interest rates are %i-% Question # 11 of 15 ( Start time: 02:01:02 AM !otal Mar"s: 1 .%# a sin-le/ overall 'ost of 'apital is often used to evaluate pro=e'ts0 Sele't 'orre't option: 1t avoids t%e pro(lem of 'omputin- t%e re,uired rate of return for ea'% investment 9roposal 1t is t%e onl# $a# to measure a firmGs re,uired return 1t a'"no$led-es t%at most ne$ investment pro=e'ts %ave a(out t%e same de-ree of ris" 1t a'"no$led-es t%at most ne$ investment pro=e'ts offer a(out t%e same e2pe'ted return Question # 12 of 15 ( Start time: 02:01:58 AM !otal Mar"s: 1 !%e statement of 'as% flo$s reports a firmGs 'as% flo$s se-re-ated into $%i'% of t%e follo$in- 'ate-ori'al order0 Sele't 'orre't option: @peratin-/ investin-/ and finan'in1nvestin-/ operatin-/ and finan'in>inan'in-/ operatin- and investin>inan'in-/ investin-/ and operatinQuestion # 13 of 15 ( Start time: 02:02:28 AM !otal Mar"s: 1 1nvestors ma# (e $illin- to pa# a premium for sta(le dividends (e'ause of t%e informational 'ontent of &&&&&&&&&&/ t%e desire of investors for &&&&&&&&&&/ and 'ertain &&&&&&&&&&) Sele't 'orre't option: Composed & Solved

1nstitutional 'onsiderations< dividends< 'urrent in'ome Fividends< 'urrent in'ome< institutional 'onsiderations Current in'ome< dividends< institutional 'onsiderations 1nstitutional 'onsiderations< 'urrent in'ome< dividends Question # 14 of 15 ( Start time: 02:03:21 AM !otal Mar"s: 1 .%i'% of t%e follo$instatements is !8:+ re-ardin- 9ermanent A''ounts0 Sele't 'orre't option: A''ounts t%at are found on 1n'ome Statement A''ounts t%at are found on Statement of 8etained +arnin-s A''ounts t%at are found on ?alan'e S%eet All of t%e -iven options Question # 15 of 15 ( Start time: 02:03:58 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e per'enta-e of interest '%ar-ed at ea'% 'ompoundin- time0 Sele't 'orre't option: 7ominal interest 8ate +ffe'tive interest 8ate Annual per'enta-e rate 9eriodi' interest rate Question # 5 of 15 ( Start time: 02:05:00 AM !otal Mar"s: 1 !otal portfolio ris" is a 'om(ination of: Sele't 'orre't option: S#stemati' ris" plus non6diversifia(le ris" Avoida(le ris" plus diversifia(le ris" S#stemati' ris" plus unavoida(le ris" S#stemati' ris" plus diversifia(le ris" Question # 8 of 15 ( Start time: 02:05:32 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e 'as% re,uired durin- a spe'ifi' period to meet interest e2penses and prin'ipal pa#ments0 Sele't 'orre't option: Fe(t 'apa'it# Fe(t6servi'e (urden Composed & Solved

Ade,ua'# 'apa'it# >i2ed6'%ar-e (urden Question # 9 of 15 ( Start time: 02:05:5; AM !otal Mar"s: 1 A 56#ear ordinar# annuit# %as a present value of 8s)1/000) 1f t%e interest rate is 8 per'ent/ t%e amount of ea'% annuit# pa#ment is 'losest to $%i'% of t%e follo$in-0 Sele't 'orre't option: 8s) 250)44 8s) 231)91 8s)181);2 8s)184)08 Question # 10 of 15 ( Start time: 02:08:1; AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! true re-ardin- t%e 'apital mar"et0 Sele't 'orre't option: .%ere lon-6term funds 'an (e raised Mone# is invested for periods lon-er t%an a #ear .%ere !>Cs and 71! are e2'%an-ed and traded .%ere overni-%t lendin- & (orro$in- ta"es pla'e Question # 11 of 15 ( Start time: 02:08:40 AM !otal Mar"s: 1 .%i'% of t%e follo$informula relates (eta of t%e sto'" to t%e standard deviation0 Sele't 'orre't option: Covarian'e of sto'" $it% mar"et Q varian'e of t%e mar"et Covarian'e of sto'" $it% mar"et A varian'e of t%e mar"et Carian'e of t%e mar"et A Covarian'e of sto'" $it% mar"et Slope of t%e re-ression line Question # 12 of 15 ( Start time: 02:08:55 AM !otal Mar"s: 1 .%i'% of t%e follo$ins%o$s A** possi(le 8is" S8eturn 'om(inations for All 'om(inations of t%e sto'"s in t%e portfolio6 $%et%er effi'ient or not) Sele't 'orre't option: 9ara'%ute -rap% Capital mar"et line Se'urit# mar"et line All of t%e -iven options Composed & Solved

Question # 13 of 15 ( Start time: 02:09:28 AM !otal Mar"s: 1 >or most firms/ 9A+ ratios and ris"&______) Sele't 'orre't option: .ill (e dire'tl# related .ill %ave an inverse relations%ip .ill (e unrelated 7one of t%e a(ove) Question # 14 of 15 ( Start time: 02:09:48 AM !otal Mar"s: 1 .%at is t%e e2pe'ted return of a Jero6(eta se'urit#0 Sele't 'orre't option: !%e ris"6free rate Rero rate of return A ne-ative rate of return !%e mar"et rate of return Question # 15 of 15 ( Start time: 02:10:08 AM !otal Mar"s: 1 .%i'% of t%e follo$instatements (in -eneral is 'orre't0 Sele't 'orre't option: A lo$ re'eiva(les turnover is desira(le !%e lo$er t%e total de(t6to6e,uit# ratio/ t%e lo$er t%e finan'ial ris" for a firm An in'rease in net profit mar-in $it% no '%an-e in sales or assets means a $ea"er 8@1 !%e %i-%er t%e ta2 rate for a firm/ t%e lo$er t%e interest 'overa-e ratio Question # 1 of 15 ( Start time: 04:44:5; AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! !%e 'ost of e,uit#0 Sele't 'orre't option: !%e minimum rate t%at a firm s%ould earn on t%e e,uit#6finan'ed part of an investment A return on t%e e,uit#6finan'ed portion of an investment t%at/ at $orst/ leaves t%e mar"et pri'e of t%e sto'" un'%an-ed ?# far t%e most diffi'ult 'omponent 'ost to estimate Kenerall# lo$er t%an t%e (efore6ta2 'ost of de(t Question # 2 of 15 ( Start time: 04:4;:12 AM !otal Mar"s: 1 .%i'% of t%e follo$instatements is true0 Sele't 'orre't option: Composed & Solved

!%e finan'ial ris" of a firm de'reases $%en it ta"es on a ris"# pro=e't !%e finan'ial ris" of a firm in'reases $%en it ta"es on more e,uit# !%e (usiness ris" of a firm in'reases $%en it ta"es on a ris"# pro=e't !%e (usiness ris" of a firm in'reases $%en it ta"es on more de(t Question # 3 of 15 ( Start time: 04:45:15 AM !otal Mar"s: 1 .%# mar"ets and mar"et returns flu'tuate0 Sele't 'orre't option: ?e'ause of politi'al fa'tors ?e'ause of so'ial fa'tors ?e'ause of so'io6politi'al fa'tors ?e'ause of ma'ro s#stemati' fa'tors Question # 4 of 15 ( Start time: 04:45:33 AM !otal Mar"s: 1 .%en a (ond $ill sell at a dis'ount0 Sele't 'orre't option: !%e 'oupon rate is -reater t%an t%e 'urrent #ield and t%e 'urrent #ield is -reater t%an #ield to maturit# !%e 'oupon rate is -reater t%an #ield to maturit# !%e 'oupon rate is less t%an t%e 'urrent #ield and t%e 'urrent #ield is -reater t%an t%e #ield to maturit# !%e 'oupon rate is less t%an t%e 'urrent #ield and t%e 'urrent #ield is less t%an #ield to maturit# Question # 5 of 15 ( Start time: 04:48:01 AM !otal Mar"s: 1 Stud# t%e time line and a''ompan#in- 56period 'as%6flo$ pattern (elo$) 0 1 2 3 4 5 ; !ime line T66666666T66666666T66666666T66666666T66666666T66666666T 8s)10 8s)10 8s)10 8s)10 8s)10 Cas% flo$s U U A ? !%e present value of t%e 56period annuit# s%o$n a(ove as of 9oint A is t%e present value of a 56period &&&&&&&&&&&&&& / $%ereas t%e future value of t%e same annuit# as of 9oint ? is t%e future value of a 56period &&&&&&&&&&&&&& ) Sele't 'orre't option: @rdinar# annuit#< ordinar# annuit# @rdinar# annuit#< annuit# due Annuit# due< annuit# due Annuit# due< ordinar# annuit# Question # ; of 15 ( Start time: 04:48:2; AM !otal Mar"s: 1 .%i'% -roup of ratios s%o$s t%e e2tent to $%i'% t%e firm is finan'ed $it% de(t0 Composed & Solved

Sele't 'orre't option: *i,uidit# ratios Fe(t ratios Covera-e ratios 9rofita(ilit# ratios Question # 5 of 15 ( Start time: 04:48:42 AM !otal Mar"s: 1 1n $%i'% of t%e follo$in- approa'% #ou need to (rin- all t%e pro=e'ts to t%e same len-t% in time0 Sele't 'orre't option: M188 approa'% Koin- 'on'ern approa'% Common life approa'% +,uivalent annual approa'% Question # 8 of 15 ( Start time: 04:49:14 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! an e2ample of %#(rid e,uit# Sele't 'orre't option: Converti(le ?onds Converti(le Fe(enture Common s%ares 9referred s%ares Question # 9 of 15 ( Start time: 04:49:31 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! an e2ample of a finan'ial intermediar#0 Sele't 'orre't option: .is'onsin S&*/ a savin-s and loan asso'iation Stron- Capital Appre'iation/ a mutual fund Mi'rosoft Corporation/ a soft$are firm Colle-e Credit/ a 'redit union Question # 10 of 15 ( Start time: 04:49:38 AM !otal Mar"s: 1 .%i'% of t%e follo$in- e,uation is 7@! 'orre't0 Sele't 'orre't option: Kross 8evenue S Admin & @peratin- +2penses N @peratin- 8evenue @t%er +2penses D @t%er 8evenue N +?1! Composed & Solved

+?1! S >inan'ial C%ar-es & 1nterest N +?! 7et 1n'ome S Fividends N 8etained +arninQuestion # 11 of 15 ( Start time: 04:50:03 AM !otal Mar"s: 1 1f 2 sto'"s move in t%e same dire'tion to-et%er t%en $%at $ill (e t%e 'orrelation 'oeffi'ient0 Sele't 'orre't option: 0 1)0 61)0 1)5 Question # 12 of 15 ( Start time: 04:50:11 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! true re-ardin- t%e 'apital mar"et0 Sele't 'orre't option: .%ere lon-6term funds 'an (e raised Mone# is invested for periods lon-er t%an a #ear .%ere !>Cs and 71! are e2'%an-ed and traded .%ere overni-%t lendin- & (orro$in- ta"es pla'e Question # 13 of 15 ( Start time: 04:50:20 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t#pe a !emporar# A''ount0 Sele't 'orre't option: Asset *ia(ilit# 8eserves 8evenue Question # 14 of 15 ( Start time: 04:50:38 AM !otal Mar"s: 1 .%i'% of t%e follo$in- refers to t%e ris" asso'iated $it% interest rate un'ertaint#0 Sele't 'orre't option: Fefault ris" premium Soverei-n 8is" 9remium Mar"et ris" premium Maturit# ris" premium Question # 15 of 15 ( Start time: 04:50:53 AM !otal Mar"s: 1 Composed & Solved

A statisti'al measure of t%e varia(ilit# of a distri(ution around its mean is referred to as &&&&&&&&&&) Sele't 'orre't option: 9ro(a(ilit# distri(ution +2pe'ted return Standard deviation Coeffi'ient of variation Question # 1 of 15 ( Start time: 04:55:29 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! t%e t#pe of I#(rid or-aniJations0 Sele't 'orre't option: S6!#pe Corporation *imited *ia(ilit# 9artners%ip Sole 9roprietors%ip 9rofessional Corporation Question # 2 of 15 ( Start time: 04:55:3; AM !otal Mar"s: 1 An annuit# due is al$a#s $ort% &&&&& a 'ompara(le annuit#) Sele't 'orre't option: *ess t%an More t%an +,ual to Can not (e found from t%e -iven information Question # 3 of 15 ( Start time: 04:55:42 AM !otal Mar"s: 1 1f all t%in-s e,ual/ $%en diversifi'ation is most effe'tive0 Sele't 'orre't option: Se'uritiesG returns are positivel# 'orrelated Se'uritiesG returns are un'orrelated Se'uritiesG returns are %i-% Se'uritiesG returns are ne-ativel# 'orrelated Question # 4 of 15 ( Start time: 04:58:00 AM !otal Mar"s: 1 Io$ t%e (eta of t%e sto'" 'ould (e 'al'ulated0 Sele't 'orre't option: ?# monitorin- pri'e of t%e sto'" Composed & Solved

?# monitorinrate of return of t%e sto'" ?# 'omparin- t%e '%an-es in t%e sto'" mar"et pri'e to t%e '%an-es in t%e sto'" mar"et inde2 All of t%e -iven options Question # 5 of 15 ( Start time: 04:58:09 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 'alled t%e ta2 savin-s of t%e firm derived from t%e dedu'ti(ilit# of interest e2pense0 Sele't 'orre't option: 1nterest ta2 s%ield Fepre'ia(le (asis >inan'in- um(rella Current #ield Question # ; of 15 ( Start time: 04:59:34 AM !otal Mar"s: 1 A(ove t%e (rea"even +?1!/ in'reased finan'ial levera-e $ill &&&&&&&&&& +9S/ all else t%e same) Assume t%ere are no ta2es Sele't 'orre't option: 1n'rease Fe'rease +it%er in'rease or de'rease 7one of t%e -iven options Question # 5 of 15 ( Start time: 04:59:53 AM !otal Mar"s: 1 .%at is t%e easiest met%od to diversif# a$a# firm6spe'ifi' ris"s0 Sele't 'orre't option: !o (u# sto'"s $it% a (eta of 1)0 !o (uild a portfolio $it% 5610 individual sto'"s !o pur'%ase t%e s%ares of a mutual fund !o pur'%ase sto'"s t%at plot a(ove t%e se'urit# mar"et line Question # 8 of 15 ( Start time: 05:00:00 AM !otal Mar"s: 1 1f ris" and return 'om(ination of an# sto'" is a(ove t%e SM*/ $%at does it mean0 Sele't 'orre't option: 1t is offerin- lo$er rate of return as 'ompared to t%e effi'ient sto'" 1t is offerin- %i-%er rate of return as 'ompared to t%e effi'ient sto'" 1ts rate of return is Jero as 'ompared to t%e effi'ient sto'" Composed & Solved

1t is offerin- rate of return e,ual to t%e effi'ient sto'" Question # 9 of 15 ( Start time: 05:00:30 AM !otal Mar"s: 1 Kiven no '%an-e in re,uired returns/ t%e pri'e of a sto'" $%ose dividend is 'onstant $ill&&&&&&&&&&) Sele't 'orre't option: Fe'rease over time at a rate of rM 8emain un'%an-ed 1n'rease over time at a rate of rM Fe'rease over time at a rate e,ual to t%e dividend -ro$t% rate Question # 10 of 15 ( Start time: 05:01:01 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e ma2imum amount of de(t (and ot%er fi2ed6'%ar-e finan'int%at a firm 'an ade,uatel# servi'e0 Sele't 'orre't option: Fe(t 'apa'it# Fe(t6servi'e (urden Ade,ua'# 'apa'it# >i2ed6'%ar-e (urden Question # 11 of 15 ( Start time: 05:01:15 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is related to t%e use *o$er finan'ial levera-e0 Sele't 'orre't option: >i2ed 'osts Caria(le 'osts Fe(t finan'inCommon e,uit# finan'inQuestion # 12 of 15 ( Start time: 05:01:24 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is a pa#ment of additional s%ares to s%are%olders in lieu of 'as%0 Sele't 'orre't option: Sto'" split Sto'" dividend +2tra dividend 8e-ular dividend Composed & Solved

Question # 13 of 15 ( Start time: 05:02:08 AM !otal Mar"s: 1 A''ordin- to MM 11/ $%at %appens $%en a firmGs de(t6to6e,uit# ratio in'reases0 Sele't 'orre't option: 1ts finan'ial ris" in'reases 1ts operatin- ris" in'reases !%e e2pe'ted return on e,uit# in'reases !%e e2pe'ted return on e,uit# de'reases Question # 14 of 15 ( Start time: 05:03:01 AM !otal Mar"s: 1 .%ere t%ere is sin-le period 'apital rationin-/ $%at is t%e most sensi(le $a# of ma"ininvestment de'isions0 Sele't 'orre't option: C%oose all pro=e'ts $it% a positive 79C Kroup pro=e'ts to-et%er to allo'ate t%e funds availa(le and sele't t%e -roup of pro=e'ts $it% t%e %i-%est 79C C%oose t%e pro=e't $it% t%e %i-%est 79C Cal'ulate 188 and sele't t%e pro=e'ts $it% t%e %i-%est 188s Question # 15 of 15 ( Start time: 05:04:29 AM !otal Mar"s: 1 .%i'% of t%e follo$in- in'ludes t%e plannin-/ dire'tin-/ monitorin-/ or-aniJin-/ and 'ontrollin- of t%e monetar# resour'es of an or-aniJation0 Sele't 'orre't option: >inan'ial a''ountin>inan'ial mana-ement >inan'ial en-ineerin>inan'ial (ud-etinQuestion # 1 of 15 ( Start time: 05:23:24 AM !otal Mar"s: 1 &&&&&&&&&& is t%e varia(ilit# of return on sto'"s or portfolios not e2plained (# -eneral mar"et movements) 1t is avoida(le t%rou-% diversifi'ation) Sele't 'orre't option: S#stemati' ris" Standard deviation :ns#stemati' ris" Coeffi'ient of variation Question # 2 of 15 ( Start time: 05:23:45 AM !otal Mar"s: 1 Composed & Solved

.%i'% of t%e follo$in- is 7@! t%e step of 9er'enta-e of sales to (e used in >inan'ial >ore'astin-0 Sele't 'orre't option: +stimate #ear6(#6#ear Sales 8evenue and +2penses +stimate *evels of 1nvestment 7eeds re,uired to Meet +stimated Sales +stimate t%e >inan'in- 7eeds +stimate t%e retained earnin-s Question # 3 of 15 ( Start time: 05:24:24 AM !otal Mar"s: 1 &&&&&&&& is paid (# 'ompanies $it% lo$er -rade (onds li"e CC or C ratin-s) Sele't 'orre't option: Fefault ris" premium Soverei-n 8is" 9remium Mar"et ris" premium Maturit# ris" premium Question # 4 of 15 ( Start time: 05:24:32 AM !otal Mar"s: 1 1n 'al'ulatin- t%e 'osts of t%e individual 'omponents of a firmGs finan'in-/ t%e 'orporate ta2 rate is important to $%i'% of t%e follo$in- 'omponent 'ost formulas0 Sele't 'orre't option: Common sto'" Fe(t 9referred sto'" 7one of t%e a(ove Question # 5 of 15 ( Start time: 05:24:40 AM !otal Mar"s: 1 !%e sto'" in #our portfolio $as sellin- for 8s)40 per s%are #esterda#/ (ut %as toda# de'lared a t%ree for t$o split) .%i'% of t%e follo$instatements seems to (e true0 Sele't 'orre't option: !%ere $ill (e t$o6t%irds as man# s%ares outstandin-/ and t%e# $ill sell for 8s);0)00 ea'% !%ere $ill (e four times as man# s%ares outstandin-/ and t%e# $ill sell for 8s)1;0)00 ea'% !%ere $ill (e 50 per'ent more s%ares outstandin- and t%e# $ill sell for 8s)2;);5 ea'% !%ere $ill (e one6and6one6%alf times as man# s%ares outstandin-/ and t%e# $ill sell for 8s);0)00 ea'% Question # ; of 15 ( Start time: 05:24:45 AM !otal Mar"s: 1 Composed & Solved

.%i'% of t%e follo$in- 'an (e used to 'al'ulate t%e ris" of t%e lar-er portfolio0 Sele't 'orre't option: Standard deviation +9S approa'% Matri2 approa'% KordonHs Approa'% Question # 5 of 15 ( Start time: 05:25:05 AM !otal Mar"s: 1 !%e ris" t%at 'overs events li"e une2pe'ted '%an-es in t%e e'onom# refers to: Sele't 'orre't option: S#stemati' ris" :ns#stemati' ris" !otal ris" All of t%e a(ove Question # 8 of 15 ( Start time: 05:25:20 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e ma2imum amount of de(t (and ot%er fi2ed6'%ar-e finan'int%at a firm 'an ade,uatel# servi'e0 Sele't 'orre't option: Fe(t 'apa'it# Fe(t6servi'e (urden Ade,ua'# 'apa'it# >i2ed6'%ar-e (urden Question # 9 of 15 ( Start time: 05:25:25 AM !otal Mar"s: 1 .%at is #ield to maturit# on a (ond0 Sele't 'orre't option: ?elo$ t%e 'oupon rate $%en t%e (ond sells at a dis'ount/ and e,ual to t%e 'oupon rate $%en t%e (ond sells at a premium !%e dis'ount rate t%at $ill set t%e present value of t%e pa#ments e,ual to t%e (ond pri'e ?ased on t%e assumption t%at an# pa#ments re'eived are reinvested at t%e 'oupon rate 7one of t%e a(ove Question # 10 of 15 ( Start time: 05:25:49 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e per'enta-e of interest '%ar-ed at ea'% 'ompoundin- time0 Sele't 'orre't option: Composed & Solved

7ominal interest 8ate +ffe'tive interest 8ate Annual per'enta-e rate 9eriodi' interest rate Question # 11 of 15 ( Start time: 05:25:5; AM !otal Mar"s: 1 .%ere t%ere is sin-le period 'apital rationin-/ $%at is t%e most sensi(le $a# of ma"ininvestment de'isions0 Sele't 'orre't option: C%oose all pro=e'ts $it% a positive 79C Kroup pro=e'ts to-et%er to allo'ate t%e funds availa(le and sele't t%e -roup of pro=e'ts $it% t%e %i-%est 79C C%oose t%e pro=e't $it% t%e %i-%est 79C Cal'ulate 188 and sele't t%e pro=e'ts $it% t%e %i-%est 188s Question # 12 of 15 ( Start time: 05:2;:03 AM !otal Mar"s: 1 .%i'% of t%e follo$in- $ould 7@! (e t%e part of t%e ris" if t%e sto'" is a sin-le sto'" investment0 Sele't 'orre't option: Compan# spe'ifi' ris" :n6diversifia(le ris" Fiversifia(le ris" 8andom ris" Question # 13 of 15 ( Start time: 05:2;:20 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e ma2imum amount of de(t (and ot%er fi2ed6'%ar-e finan'int%at a firm 'an ade,uatel# servi'e0 Sele't 'orre't option: Fe(t 'apa'it# Fe(t6servi'e (urden Ade,ua'# 'apa'it# >i2ed6'%ar-e (urden Question # 14 of 15 ( Start time: 05:2;:38 AM !otal Mar"s: 1 !%e e2pli'it 'osts asso'iated $it% 'orporate default/ su'% as le-al e2penses/ are t%e &&&&&&&&&&& of t%e firm) Sele't 'orre't option: Composed & Solved

>lotation 'osts Fefault (eta 'oeffi'ients Fire't (an"rupt'# 'osts 1ndire't (an"rupt'# 'osts Question # 15 of 15 ( Start time: 05:25:45 AM !otal Mar"s: 1 .%i'% of t%e follo$in- $ill 7@! e,uate t%e future value of 'as% inflo$s to t%e present value of 'as% outflo$s0 Sele't 'orre't option: Fis'ount rate 9rofita(ilit# inde2 1nternal rate of return Multiple 1nternal rate of return Question # 1 of 15 ( Start time: 05:35:30 AM !otal Mar"s: 1 .%i'% of t%e follo$in- fa'tors mi-%t affe't sto'" returns0 Sele't 'orre't option: ?usiness '#'le 1nterest rate flu'tuations 1nflation rates All of t%e a(ove Question # 2 of 15 ( Start time: 05:35:48 AM !otal Mar"s: 1 .%at is t%e additional amount a (orro$er must pa# to lender to 'ompensate for assumin- t%e ris" asso'iated $it% non6pa#ment0 Sele't 'orre't option: Fefault ris" premium Soverei-n 8is" 9remium Mar"et ris" premium Maturit# ris" premium Question # 3 of 15 ( Start time: 05:3;:12 AM !otal Mar"s: 1 .%i'% of t%e follo$informulas represents a 'orre't 'al'ulation of t%e de-ree of operatinlevera-e0 Sele't 'orre't option: (Q 6 Q?+ AQ (+?1! A (+?1! 6 >C Composed & Solved

BQ(96C D >CE ABQ(96C E Q(96C A BQ(96C 6 >CE Question # 4 of 15 ( Start time: 05:3;:22 AM !otal Mar"s: 1 !%e lo-i' (e%ind &&&&&&&&& is t%at instead of loo"in- at net 'as% flo$s #ou loo" at 'as% inflo$s and outflo$s separatel# for ea'% point in time) Sele't 'orre't option: 188 M188 9C 79C Question # 5 of 15 ( Start time: 05:3;:38 AM !otal Mar"s: 1 .%en ta2es are 'onsidered/ t%e value of a levered firm e,uals t%e value of t%e&&&&&&&&) Sele't 'orre't option: :nlevered firm :nlevered firm plus t%e value of t%e de(t :nlevered firm plus t%e present value of t%e ta2 s%ield :nlevered firm plus t%e value of t%e de(t plus t%e value of t%e ta2 s%ield Question # ; of 15 ( Start time: 05:3;:45 AM !otal Mar"s: 1 .%at is a le-al a-reement/ also 'alled t%e deed of trust/ (et$een t%e 'orporation issuin(onds and t%e (ond%olders t%at esta(lis% t%e terms of t%e (ond issue0 Sele't 'orre't option: 1ndenture Fe(enture ?ond ?ond trustee Question # 5 of 15 ( Start time: 05:35:05 AM !otal Mar"s: 1 .%i'% if t%e follo$in- refers to 'apital (ud-etin-0 Sele't 'orre't option: 1nvestment in lon-6term lia(ilities 1nvestment in fi2ed assets 1nvestment in 'urrent assets 1nvestment in s%ort6term lia(ilities Composed & Solved

Question # 8 of 15 ( Start time: 05:35:23 AM !otal Mar"s: 1 .%at is t%e most important 'riteria in 'apital (ud-etin-0 Sele't 'orre't option: 8eturn on investment 9rofita(ilit# inde2 7et present value 9a# (a'" period Question # 9 of 15 ( Start time: 05:35:43 AM !otal Mar"s: 1 !%e value of t%e (ond is 7@! dire'tl# tied to t%e value of $%i'% of t%e follo$in- assets0 Sele't 'orre't option: 8eal assets of t%e (usiness *i,uid assets of t%e (usiness >i2ed assets of t%e (usiness *on- term assets of t%e (usiness Question # 10 of 15 ( Start time: 05:38:14 AM !otal Mar"s: 1 >or most firms/ 9A+ ratios and ris"&&&&&&&&&) Sele't 'orre't option: .ill (e dire'tl# related .ill %ave an inverse relations%ip .ill (e unrelated 7one of t%e a(ove) Question # 11 of 15 ( Start time: 05:38:21 AM !otal Mar"s: 1 Io$ 'an a 'ompan# improve (lo$er its de(t6to6total asset ratio0 Sele't 'orre't option: ?# (orro$in- more ?# s%iftin- s%ort6term to lon-6term de(t ?# s%iftin- lon-6term to s%ort6term de(t ?# sellin- 'ommon sto'" Question # 12 of 15 ( Start time: 05:38:35 AM !otal Mar"s: 1 >or Compan# A/ plo$ (a'" ratio is 30M) .%at $ill (e its 9a#6out ratio0 Sele't 'orre't option: 3)33M Composed & Solved

30M 31M 50M Question # 13 of 15 ( Start time: 05:38:55 AM !otal Mar"s: 1 As interest rates -o up/ t%e present value of a stream of fi2ed 'as% flo$s &&&&&) Sele't 'orre't option: Koes do$n Koes up Sta#s t%e same Can not (e found from t%e -iven information Question # 14 of 15 ( Start time: 05:39:13 AM !otal Mar"s: 1 .%i'% of t%e follo$in- s%o$s A** possi(le 8is" S8eturn 'om(inations for All 'om(inations of t%e sto'"s in t%e portfolio6 $%et%er effi'ient or not) Sele't 'orre't option: 9ara'%ute -rap% Capital mar"et line Se'urit# mar"et line All of t%e -iven options Question # 15 of 15 ( Start time: 05:39:44 AM !otal Mar"s: 1 All of t%e follo$in- are t%e finan'ial statements used for t%e purpose of reportin- and anal#sis +VC+9!: Sele't 'orre't option: ?alan'e S%eet 1n'ome Statement Cas% (ud-et Statement of 8etained +arnin-s Question # 1 of 15 ( Start time: 05:48:12 AM !otal Mar"s: 1 .%o determine t%e mar"et pri'e of a s%are of 'ommon sto'"0 Sele't 'orre't option: !%e (oard of dire'tors of t%e firm !%e sto'" e2'%an-e on $%i'% t%e sto'" is listed !%e president of t%e 'ompan# 1ndividuals (u#in- and sellin- t%e sto'" Composed & Solved

Question # 2 of 15 ( Start time: 05:48:55 AM !otal Mar"s: 1 .%i'% of t%e follo$in- needs to (e e2'luded $%ile $e 'al'ulate t%e in'remental 'as% flo$s0 Sele't 'orre't option: Fepre'iation Sun" 'ost @pportunit# 'ost 7on6'as% item Question # 3 of 15 ( Start time: 05:49:14 AM !otal Mar"s: 1 :nder t%e idealiJed 'onditions of MM/ $%i'% statement is 'orre't $%en a firm issues ne$ sto'" in order to pa# a 'as% dividend on e2istin- s%ares0 Sele't 'orre't option: !%e ne$ s%ares are $ort% less t%an t%e old s%ares !%e old s%ares drop in value to e,ual t%e ne$ pri'e !%e value of t%e firm is redu'ed (# t%e amount of t%e dividend !%e value of t%e firm is unaffe'ted Question # 4 of 15 ( Start time: 05:50:22 AM !otal Mar"s: 1 .%i'% of t%e follo$in- $ould 7@! (e t%e part of t%e ris" if t%e sto'" is a sin-le sto'" investment0 Sele't 'orre't option: Compan# spe'ifi' ris" :n6diversifia(le ris" Fiversifia(le ris" 8andom ris" Question # 5 of 15 ( Start time: 05:50:40 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e ris" of investin- funds in anot%er 'ountr#0 Sele't 'orre't option: Fefault ris" premium Soverei-n 8is" 9remium Mar"et ris" premium Maturit# ris" premium Question # ; of 15 ( Start time: 05:51:08 AM !otal Mar"s: 1 Composed & Solved

.%i'% of t%e follo$instipulate a relations%ip (et$een e2pe'ted return and ris"0 Sele't 'orre't option: A9! stipulates CA9M stipulates ?ot% CA9M and A9! stipulate 7eit%er CA9M nor A9! stipulate Question # 5 of 15 ( Start time: 05:51:15 AM !otal Mar"s: 1 .%i'% of t%e follo$in- allo$s to -rap%i'all# depi'tin- t%e timin- of t%e 'as% flo$s as $ell as t%eir nature as eit%er inflo$s or outflo$s0 Sele't 'orre't option: Cas% flo$ dia-ram Cas% (ud-et Cas% flo$ statement 7one of t%e -iven options Question # 8 of 15 ( Start time: 05:51:45 AM !otal Mar"s: 1 A 56#ear ordinar# annuit# %as a present value of 8s)1/000) 1f t%e interest rate is 8 per'ent/ t%e amount of ea'% annuit# pa#ment is 'losest to $%i'% of t%e follo$in-0 Sele't 'orre't option: 8s) 250)44 8s) 231)91 8s)181);2 8s)184)08 Question # 9 of 15 ( Start time: 05:52:04 AM !otal Mar"s: 1 1nvestors ma# (e $illin- to pa# a premium for sta(le dividends (e'ause of t%e informational 'ontent of &&&&&&&&&&/ t%e desire of investors for &&&&&&&&&&/ and 'ertain &&&&&&&&&&) Sele't 'orre't option: 1nstitutional 'onsiderations< dividends< 'urrent in'ome Fividends< 'urrent in'ome< institutional 'onsiderations Current in'ome< dividends< institutional 'onsiderations 1nstitutional 'onsiderations< 'urrent in'ome< dividends Question # 10 of 15 ( Start time: 05:52:11 AM !otal Mar"s: 1 Composed & Solved

!%e e2pli'it 'osts asso'iated $it% 'orporate default/ su'% as le-al e2penses/ are t%e &&&&&&&&&&& of t%e firm) Sele't 'orre't option: >lotation 'osts Fefault (eta 'oeffi'ients Fire't (an"rupt'# 'osts 1ndire't (an"rupt'# 'osts Question # 11 of 15 ( Start time: 05:52:32 AM !otal Mar"s: 1 Io$ e'onomi' value is added (+CA 'al'ulated0 Sele't 'orre't option: 1t is t%e differen'e (et$een t%e mar"et value of t%e firm and t%e (oo" value of e,uit# 1t is t%e firmGs net operatin- profit after ta2 (7@9A! less a dollar 'ost of 'apital '%ar-e 1t is t%e net in'ome of t%e firm less a dollar 'ost t%at e,uals .AAC multiplied (# t%e (oo" value of lia(ilities and e,uities 7one of t%e -iven option Question # 12 of 15 ( Start time: 05:53:10 AM !otal Mar"s: 1 &&&&&&&& is paid (# 'ompanies $it% lo$er -rade (onds li"e CC or C ratin-s) Sele't 'orre't option: Fefault ris" premium Soverei-n 8is" 9remium Mar"et ris" premium Maturit# ris" premium Question # 13 of 15 ( Start time: 05:53:18 AM !otal Mar"s: 1 1n effi'ient mar"et t%e sto'" pri'e depends upon t%e re,uired return $%i'% depends upon &&&&&&&&&) Sele't 'orre't option: Mar"et ris" !otal ris" Fiversified ris" 7on6 s#stemati' ris" Question # 14 of 15 ( Start time: 05:53:53 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e 'as% re,uired durin- a spe'ifi' period to meet interest e2penses and prin'ipal pa#ments0 Composed & Solved

Sele't 'orre't option: Fe(t 'apa'it# Fe(t6servi'e (urden Ade,ua'# 'apa'it# >i2ed6'%ar-e (urden Question # 15 of 15 ( Start time: 05:54:00 AM !otal Mar"s: 1 !otal portfolio ris" is &&&&&&&&&&) Sele't 'orre't option: +,ual to s#stemati' ris" plus non6diversifia(le ris" +,ual to avoida(le ris" plus diversifia(le ris" +,ual to s#stemati' ris" plus unavoida(le ris" +,ual to s#stemati' ris" plus diversifia(le ris" Question # 1 of 15 ( Start time: 0;:02:09 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! an e2ample of a finan'ial intermediar#0 Sele't 'orre't option: .is'onsin S&*/ a savin-s and loan asso'iation Stron- Capital Appre'iation/ a mutual fund Mi'rosoft Corporation/ a soft$are firm Colle-e Credit/ a 'redit union Question # 2 of 15 ( Start time: 0;:02:15 AM !otal Mar"s: 1 .%i'% of t%e follo$in- are "no$n as Fis'retionar# >inan'in-0 Sele't 'orre't option: Current lia(ilities Current assets >i2ed assets *on-6term lia(ilities Question # 3 of 15 ( Start time: 0;:03:18 AM !otal Mar"s: 1 .%i'% of t%e follo$in- refers to a poli'# of dividend Lsmoot%in-L0 Sele't 'orre't option: Maintainin- a 'onstant dividend pa#out ratio Weepin- t%e re-ular dividend at t%e same level indefinitel# Maintainin- a stead# pro-ression of dividend in'reases over time Composed & Solved

Alternatin- 'as% dividends $it% sto'" dividends Question # 4 of 15 ( Start time: 0;:04:3; AM !otal Mar"s: 1 .%i'% of t%e follo$instatements (in -eneral is 'orre't0 Sele't 'orre't option: A lo$ re'eiva(les turnover is desira(le !%e lo$er t%e total de(t6to6e,uit# ratio/ t%e lo$er t%e finan'ial ris" for a firm An in'rease in net profit mar-in $it% no '%an-e in sales or assets means a $ea"er 8@1 !%e %i-%er t%e ta2 rate for a firm/ t%e lo$er t%e interest 'overa-e ratio Question # 5 of 15 ( Start time: 0;:05:04 AM !otal Mar"s: 1 .%i'% of t%e follo$in- $ould -enerall# %ave unlimited lia(ilit#0 Sele't 'orre't option: A limited partner in a partners%ip A s%are%older in a 'orporation !%e o$ner of a sole proprietors%ip A mem(er in a limited lia(ilit# 'ompan# (**C Question # ; of 15 ( Start time: 0;:05:23 AM !otal Mar"s: 1 Cal'ulate t%e (rea"6even point for sales revenues -iven t%e follo$in- information) !%e firm %as 8s)1/ 000/000 in fi2ed 'osts) !%e firm anti'ipates t%at varia(le 'osts $ill (e 8s)1 for ever# 8s)5 in sales) Sele't 'orre't option: 8s)1/ 250/000 8s)1/ 000/000 8s)250/ 000 8s)200/ 000 Question # 5 of 15 ( Start time: 0;:05:39 AM !otal Mar"s: 1 1n effi'ient mar"et t%e sto'" pri'e depends upon t%e re,uired return $%i'% depends upon &&&&&&&&&) Sele't 'orre't option: Mar"et ris" !otal ris" Fiversified ris" 7on6 s#stemati' ris" Composed & Solved

Question # 8 of 15 ( Start time: 0;:05:55 AM !otal Mar"s: 1 :pon $%i'% of t%e follo$in- a firmGs de-ree of operatinlevera-e (F@* depends primaril#0 Sele't 'orre't option: Sales varia(ilit# *evel of fi2ed operatin- 'osts Closeness to its operatin- (rea"6even point Fe(t6to6e,uit# ratio Question # 9 of 15 ( Start time: 0;:0;:02 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 'orre't re-ardin- t%e opportunit# 'ost of 'apital for a pro=e't0 Sele't 'orre't option: !%e opportunit# 'ost of 'apital is t%e return t%at investors -ive up (# investin- in t%e pro=e't rat%er t%an in se'urities of e,uivalent ris") >inan'ial mana-ers use t%e 'apital asset pri'in- model to estimate t%e opportunit# 'ost of 'apital !%e 'ompan# 'ost of 'apital is t%e e2pe'ted rate of return demanded (# investors in a 'ompan# All of t%e -iven options Question # 10 of 15 ( Start time: 0;:0;:58 AM !otal Mar"s: 1 A 'ompan# $%ose sto'" is sellin- at a 9A+ ratio -reater t%an t%e 9A+ ratio of a mar"et inde2 most li"el# %as &&&&&&&&&) Sele't 'orre't option: An anti'ipated earnin-s -ro$t% rate $%i'% is less t%an t%at of t%e avera-e firm A dividend #ield $%i'% is less t%an t%at of t%e avera-e firm *ess predi'ta(le earnin-s -ro$t% t%an t%at of t%e avera-e firm Kreater '#'li'alit# of earnin-s -ro$t% t%an t%at of t%e avera-e firm Question # 11 of 15 ( Start time: 0;:05:19 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is >A*S+ a(out 9erpetuit#0 Sele't 'orre't option: 1t is a series of 'as% flo$s Cas% flo$s o''ur for a spe'ifi' time period 1ts 'as% flo$s are identi'al 7one of t%e -iven options Composed & Solved

Question # 12 of 15 ( Start time: 0;:05:39 AM !otal Mar"s: 1 .%at does t%e la$ of 'onservation of value implies0 Sele't 'orre't option: !%e mi2 of senior and su(ordinated de(t does not affe't t%e value of t%e firm !%e mi2 of 'onverti(le and non6'onverti(le de(t does not affe't t%e value of t%e firm !%e mi2 of 'ommon sto'" and preferred sto'" does not affe't t%e value of t%e firm All of t%e -iven options Question # 13 of 15 ( Start time: 0;:08:09 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 'alled t%e ta2 savin-s of t%e firm derived from t%e dedu'ti(ilit# of interest e2pense0 Sele't 'orre't option: 1nterest ta2 s%ield Fepre'ia(le (asis >inan'in- um(rella Current #ield Question # 14 of 15 ( Start time: 0;:08:29 AM !otal Mar"s: 1 .%at are t%e Fire't 'laim se'urities0 Sele't 'orre't option: !%e se'urities $%ose value depends on t%e 'as% flo$s -enerated (# t%e underl#in- assets !%e se'urities $%ose value depends on t%e value of t%e underl#in- assets !%e se'urities t%at do not dire'tl# -enerate an# returns for its investors All of t%e -iven options Question # 15 of 15 ( Start time: 0;:08:45 AM !otal Mar"s: 1 An investment proposal s%ould (e =ud-ed in $%et%er or not it provides: Sele't 'orre't option: A return e,ual to t%e return re,uire (# t%e investor A return more t%an re,uired (# investor A return less t%an re,uired (# investor A return e,ual to or more t%an re,uired (# investor Question # 1 of 15 ( Start time: 0;:14:45 AM !otal Mar"s: 1 &&&&&&&& is paid (# 'ompanies $it% lo$er -rade (onds li"e CC or C ratin-s) Sele't 'orre't option: Composed & Solved

Fefault ris" premium Soverei-n 8is" 9remium Mar"et ris" premium Maturit# ris" premium Question # 2 of 15 ( Start time: 0;:14:54 AM !otal Mar"s: 1 Io$ LS%are%older $ealt%L is represented in a firm0 Sele't 'orre't option: !%e num(er of people emplo#ed in t%e firm !%e (oo" value of t%e firmGs assets less t%e (oo" value of its lia(ilities !%e mar"et pri'e per s%are of t%e firmGs 'ommon sto'" !%e amount of salar# paid to its emplo#ees Question # 3 of 15 ( Start time: 0;:15:13 AM !otal Mar"s: 1 .%i'% of t%e follo$in- needs to (e e2'luded $%ile $e 'al'ulate t%e in'remental 'as% flo$s0 Sele't 'orre't option: Fepre'iation Sun" 'ost @pportunit# 'ost 7on6'as% item Question # 4 of 15 ( Start time: 0;:15:20 AM !otal Mar"s: 1 1f all t%in-s e,ual/ $%en diversifi'ation is most effe'tive0 Sele't 'orre't option: Se'uritiesG returns are positivel# 'orrelated Se'uritiesG returns are un'orrelated Se'uritiesG returns are %i-% Se'uritiesG returns are ne-ativel# 'orrelated Question # 5 of 15 ( Start time: 0;:15:25 AM !otal Mar"s: 1 .%i'% of t%e follo$in- refers to finan'ial ris"0 Sele't 'orre't option: 8is" of o$nin- e,uit# se'urities 8is" fa'ed (# e,uit# %olders $%en de(t is used Keneral (usiness ris" of t%e firm 9ossi(ilit# t%at interest rates $ill in'rease Composed & Solved

Question # ; of 15 ( Start time: 0;:1;:32 AM !otal Mar"s: 1 An ar(itra-e opportunit# e2ists if an investor 'an 'onstru't a &&&&&&&&&& investment portfolio t%at $ill #ield a sure profit) Sele't 'orre't option: 9ositive 7e-ative Rero All of t%e a(ove Question # 5 of 15 ( Start time: 0;:1;:45 AM !otal Mar"s: 1 .%i'% of t%e follo$in- ris" 'an (e diversified a$a#0 Sele't 'orre't option: S#stemati' ris" ?eta >irm spe'ifi' ris" Mar"et ris" Question # 8 of 15 ( Start time: 0;:15:05 AM !otal Mar"s: 1 .%i'% of t%e follo$in-s are t%e propositions of Modi-liani and MillerGs0 Sele't 'orre't option: !%e mar"et value of a firmGs 'ommon sto'" is independent of its 'apital stru'ture !%e mar"et value of a firmGs de(t is independent of its 'apital stru'ture !%e mar"et value of an# firm is independent of its 'apital stru'ture 7one of t%e -iven options Question # 9 of 15 ( Start time: 0;:15:25 AM !otal Mar"s: 1 .%i'% of t%e follo$instatements is true0 Sele't 'orre't option: !%e finan'ial ris" of a firm de'reases $%en it ta"es on a ris"# pro=e't !%e finan'ial ris" of a firm in'reases $%en it ta"es on more e,uit# !%e (usiness ris" of a firm in'reases $%en it ta"es on a ris"# pro=e't !%e (usiness ris" of a firm in'reases $%en it ta"es on more de(t Question # 10 of 15 ( Start time: 0;:15:45 AM !otal Mar"s: 1 1f sto'" is a part of totall# diversified portfolio t%en its 'ompan# ris" must (e e,ual to: Sele't 'orre't option: Composed & Solved

0 0)5 1 61 Question # 11 of 15 ( Start time: 0;:18:04 AM !otal Mar"s: 1 A statisti'al measure of t%e varia(ilit# of a distri(ution around its mean is referred to as &&&&&&&&&&) Sele't 'orre't option: 9ro(a(ilit# distri(ution +2pe'ted return Standard deviation Coeffi'ient of variation Question # 12 of 15 ( Start time: 0;:18:20 AM !otal Mar"s: 1 .%i'% of t%e follo$in- s%o$s A** possi(le 8is" S8eturn 'om(inations for All 'om(inations of t%e sto'"s in t%e portfolio6 $%et%er effi'ient or not) Sele't 'orre't option: 9ara'%ute -rap% Capital mar"et line Se'urit# mar"et line All of t%e -iven options Question # 13 of 15 ( Start time: 0;:18:25 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is a pa#ment of additional s%ares to s%are%olders in lieu of 'as%0 Sele't 'orre't option: Sto'" split Sto'" dividend +2tra dividend 8e-ular dividend Question # 14 of 15 ( Start time: 0;:18:35 AM !otal Mar"s: 1 .%at t#pe of lon-6term finan'in- most li"el# %as t%e follo$in- features: 1 it %as an infinite life/ 2 it pa#s dividends/ and 3 its 'as% flo$s are e2pe'ted to (e a 'onstant annuit# stream0 Sele't 'orre't option: Composed & Solved

*on-6term de(t 9referred sto'" Common sto'" 7one of t%e -iven options Question # 15 of 15 ( Start time: 0;:19:03 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! true re-ardin- t%e 'apital mar"et0 Sele't 'orre't option: .%ere lon-6term funds 'an (e raised Mone# is invested for periods lon-er t%an a #ear .%ere !>Cs and 71! are e2'%an-ed and traded .%ere overni-%t lendin- & (orro$in- ta"es pla'e Question # 1 of 15 ( Start time: 0;:29:41 AM !otal Mar"s: 1 !%e Fu9ont Approa'% (rea"s do$n t%e earnin- po$er on s%are%oldersG (oo" value (8@+ as follo$s: 8@+ N &&&&&&&&&&) Sele't 'orre't option: 7et profit mar-in X !otal asset turnover X +,uit# multiplier !otal asset turnover X Kross profit mar-in X Fe(t ratio !otal asset turnover X 7et profit mar-in !otal asset turnover X Kross profit mar-in X +,uit# multiplier Question # 2 of 15 ( Start time: 0;:30:01 AM !otal Mar"s: 1 .%i'% t#pe of responsi(ilities are primaril# assi-ned to Controller and !reasurer respe'tivel#0 Sele't 'orre't option: @perational< finan'ial mana-ement >inan'ial mana-ement< a''ountinA''ountin-< finan'ial mana-ement >inan'ial mana-ement< operations Question # 3 of 15 ( Start time: 0;:30:21 AM !otal Mar"s: 1 .%i'% of t%e follo$in- in'ludes t%e plannin-/ dire'tin-/ monitorin-/ or-aniJin-/ and 'ontrollin- of t%e monetar# resour'es of an or-aniJation0 Sele't 'orre't option: >inan'ial a''ountin>inan'ial mana-ement Composed & Solved

>inan'ial en-ineerin>inan'ial (ud-etinQuestion # 4 of 15 ( Start time: 0;:30:29 AM !otal Mar"s: 1 .%i'% of t%e follo$in- 'ould (e defined as t%e 'apital stru'ture of t%e Compan#0 Sele't 'orre't option: !%e firmGs mi2 of different se'urities !%e firmGs de(t6e,uit# ratio !%e mar"et imperfe'tion t%at t%e firmGs mana-er 'an e2ploit All of t%e a(ove Question # 5 of 15 ( Start time: 0;:31:23 AM !otal Mar"s: 1 .%# a sin-le/ overall 'ost of 'apital is often used to evaluate pro=e'ts0 Sele't 'orre't option: 1t avoids t%e pro(lem of 'omputin- t%e re,uired rate of return for ea'% investment 9roposal 1t is t%e onl# $a# to measure a firmGs re,uired return 1t a'"no$led-es t%at most ne$ investment pro=e'ts %ave a(out t%e same de-ree of ris" 1t a'"no$led-es t%at most ne$ investment pro=e'ts offer a(out t%e same e2pe'ted return Question # ; of 15 ( Start time: 0;:31:50 AM !otal Mar"s: 1 .%i'% of t%e follo$in- allo$s to -rap%i'all# depi'tin- t%e timin- of t%e 'as% flo$s as $ell as t%eir nature as eit%er inflo$s or outflo$s0 Sele't 'orre't option: Cas% flo$ dia-ram Cas% (ud-et Cas% flo$ statement 7one of t%e -iven options Question # 5 of 15 ( Start time: 0;:31:55 AM !otal Mar"s: 1 .%at t#pe of lon-6term finan'in- most li"el# %as t%e follo$in- features: 1 it %as an infinite life/ 2 it pa#s dividends/ and 3 its 'as% flo$s are e2pe'ted to (e a 'onstant annuit# stream0 Sele't 'orre't option: *on-6term de(t 9referred sto'" Common sto'" Composed & Solved

7one of t%e -iven options Question # 8 of 15 ( Start time: 0;:32:05 AM !otal Mar"s: 1 .%i'% of t%e follo$in- value of t%e s%ares '%an-es $it% investorHs per'eption a(out t%e 'ompan#Hs future and suppl# and demand situation0 Sele't 'orre't option: 9ar value Mar"et value 1ntrinsi' value >a'e value Question # 9 of 15 ( Start time: 0;:32:33 AM !otal Mar"s: 1 .%i'% of t%e follo$in- affe'ts pri'e of t%e (ond0 Sele't 'orre't option: Mar"et interest rate 8e,uired rate of return 1nterest rate ris" All of t%e -iven options Question # 10 of 15 ( Start time: 0;:32:44 AM !otal Mar"s: 1 .%i'% of t%e follo$in-s e2pressed t%e proposition t%at t%e value of t%e firm is independent of its 'apital stru'ture0 Sele't 'orre't option: !%e Capital Asset 9ri'in- Model M&M 9roposition 1 M&M 9roposition 11 !%e *a$ of @ne 9ri'e Question # 11 of 15 ( Start time: 0;:33:41 AM !otal Mar"s: 1 .%i'% of t%e follo$in- 'ould 7@! (e defined as t%e 'apital stru'ture of t%e Compan#0 Sele't 'orre't option: !%e firmGs mi2 of Assets and lia(ilities !%e firmGs 'ommon sto'"s onl# !%e firmGs de(t6e,uit# ratio All of t%e -iven options Question # 12 of 15 ( Start time: 0;:34:03 AM !otal Mar"s: 1 Composed & Solved

A''ordin- to t%e Capital Asset 9ri'in- Model (CA9M / a $ell6diversified portfolioGs rate of return is a fun'tion of $%i'% of t%e follo$in-: Sele't 'orre't option: :ni,ue ris" 8einvestment ris" Mar"et ris" :ns#stemati' ris" Question # 13 of 15 ( Start time: 0;:34:23 AM !otal Mar"s: 1 1f ris" and return 'om(ination of an# sto'" is a(ove t%e SM*/ $%at does it mean0 Sele't 'orre't option: 1t is offerin- lo$er rate of return as 'ompared to t%e effi'ient sto'" 1t is offerin- %i-%er rate of return as 'ompared to t%e effi'ient sto'" 1ts rate of return is Jero as 'ompared to t%e effi'ient sto'" 1t is offerin- rate of return e,ual to t%e effi'ient sto'" Question # 14 of 15 ( Start time: 0;:34:50 AM !otal Mar"s: 1 .%# 'ommon sto'" of a 'ompan# must provide a %i-%er e2pe'ted return t%an t%e de(t of t%e same 'ompan#0 Sele't 'orre't option: !%ere is less demand for sto'" t%an for (onds !%ere is -reater demand for sto'" t%an for (onds !%ere is more s#stemati' ris" involved for t%e 'ommon sto'" !%ere is a mar"et premium re,uired for (onds Question # 15 of 15 ( Start time: 0;:35:11 AM !otal Mar"s: 1 .%at is t%e present value of 8s)1/000 to (e paid at t%e end of 5 #ears if t%e 'orre't ris" ad=usted interest rate is 8M0 Sele't 'orre't option: 8s)514 8s)1/4;2 8s)322);9 8s)401)98 Question # 1 of 15 ( Start time: 0;:41:50 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e e2pe'ted 'as% dividend t%at is normall# paid to s%are%olders0 Composed & Solved

Sele't 'orre't option: Sto'" split Sto'" dividend +2tra dividend 8e-ular dividend Question # 2 of 15 ( Start time: 0;:41:58 AM !otal Mar"s: 1 .%i'% of t%e follo$in- allo$s to -rap%i'all# depi'tin- t%e timin- of t%e 'as% flo$s as $ell as t%eir nature as eit%er inflo$s or outflo$s0 Sele't 'orre't option: Cas% flo$ dia-ram Cas% (ud-et Cas% flo$ statement 7one of t%e -iven options Question # 3 of 15 ( Start time: 0;:42:0; AM !otal Mar"s: 1 .%at is t%e present value of 8s) 3/500/000 to (e paid at t%e end of 50 #ears if t%e 'orre't ris" ad=usted interest rate is 18M0 Sele't 'orre't option: 8s)105/000 8s)1/500/000 8s)3955/000 8s) 350/000 Question # 4 of 15 ( Start time: 0;:42:12 AM !otal Mar"s: 1 .%at is t%e differen'e (et$een e'onomi' profit and a''ountin- profit0 Sele't 'orre't option: +'onomi' profit in'ludes a '%ar-e for all providers of 'apital $%ile a''ountin- profit in'ludes onl# a '%ar-e for de(t +'onomi' profit 'overs t%e profit over t%e life of t%e firm/ $%ile a''ountin- profit onl# 'overs t%e most re'ent a''ountin- period A''ountin- profit is (ased on 'urrent a''epted a''ountin- rules $%ile e'onomi' profit is (ased on 'as% flo$s All of t%e -iven options are 'orre't Question # 5 of 15 ( Start time: 0;:42:20 AM !otal Mar"s: 1 Composed & Solved

.it% 'ontinuous 'ompoundin- at 8 per'ent for 20 #ears/ $%at is t%e appro2imate future value of a 8s) 20/000 initial investment0 Sele't 'orre't option: 8s)52/000 8s)93/219 8s)99/0;1 8s)915/240 Question # ; of 15 ( Start time: 0;:42:2; AM !otal Mar"s: 1 !%e $ei-%ted avera-e of possi(le returns/ $it% t%e $ei-%ts (ein- t%e pro(a(ilities of o''urren'e is referred to as &&&&&&&&&&) Sele't 'orre't option: 9ro(a(ilit# distri(ution +2pe'ted return Standard deviation Coeffi'ient of variation Question # 5 of 15 ( Start time: 0;:42:42 AM !otal Mar"s: 1 .%en ta2es are 'onsidered/ t%e value of a levered firm e,uals t%e value of t%e&&&&&&&&) Sele't 'orre't option: :nlevered firm :nlevered firm plus t%e value of t%e de(t :nlevered firm plus t%e present value of t%e ta2 s%ield :nlevered firm plus t%e value of t%e de(t plus t%e value of t%e ta2 s%ield Question # 8 of 15 ( Start time: 0;:42:48 AM !otal Mar"s: 1 1f $e invest in man# se'urities $%i'% are &&&&&&&&to ea'% ot%er t%en it is possi(le to redu'e overall ris" for #our investment) Sele't 'orre't option: Compara(le Correlated Ii-%l# 'orrelated 7e-ativel# 'orrelated Question # 9 of 15 ( Start time: 0;:43:4; AM !otal Mar"s: 1 .%i'% of t%e follo$in-s e2pressed t%e proposition t%at t%e 'ost of e,uit# is a positive linear fun'tion of 'apital stru'ture0 Composed & Solved

Sele't 'orre't option: !%e Capital Asset 9ri'in- Model M&M 9roposition 1 M&M 9roposition 11 !%e *a$ of @ne 9ri'e Question # 10 of 15 ( Start time: 0;:44:04 AM !otal Mar"s: 1 An ar(itra-e opportunit# e2ists if an investor 'an 'onstru't a &&&&&&&&&& investment portfolio t%at $ill #ield a sure profit) Sele't 'orre't option: 9ositive 7e-ative Rero All of t%e a(ove Question # 11 of 15 ( Start time: 0;:44:14 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is related to t%e use *o$er finan'ial levera-e0 Sele't 'orre't option: >i2ed 'osts Caria(le 'osts Fe(t finan'inCommon e,uit# finan'inQuestion # 12 of 15 ( Start time: 0;:44:22 AM !otal Mar"s: 1 .%i'% statement is 7@! true re-ardin- t%e mar"et portfolio0 Sele't 'orre't option: 1t in'ludes all pu(li'l# traded finan'ial assets 1t is t%e tan-en'# point (et$een t%e 'apital mar"et line and t%e indifferen'e 'urve All se'urities in t%e mar"et portfolio are %eld in proportion to t%eir mar"et values 1t lies on t%e effi'ient frontier Question # 13 of 15 ( Start time: 0;:44:32 AM !otal Mar"s: 1 .%i'% of t%e follo$in- in'ludes t%e plannin-/ dire'tin-/ monitorin-/ or-aniJin-/ and 'ontrollin- of t%e monetar# resour'es of an or-aniJation0 Sele't 'orre't option: >inan'ial a''ountin- Composed & Solved

>inan'ial mana-ement >inan'ial en-ineerin>inan'ial (ud-etinQuestion # 14 of 15 ( Start time: 0;:44:41 AM !otal Mar"s: 1 !%e Fu9ont Approa'% (rea"s do$n t%e earnin- po$er on s%are%oldersG (oo" value (8@+ as follo$s: 8@+ N &&&&&&&&&&) Sele't 'orre't option: 7et profit mar-in X !otal asset turnover X +,uit# multiplier !otal asset turnover X Kross profit mar-in X Fe(t ratio !otal asset turnover X 7et profit mar-in !otal asset turnover X Kross profit mar-in X +,uit# multiplier Question # 15 of 15 ( Start time: 0;:44:49 AM !otal Mar"s: 1 .%ere t%e effi'ient sto'" 'om(ination of ris" and return in effi'ient mar"et s%ould lie0 Sele't 'orre't option: @n t%e SM* ?elo$ t%e SM* A(ove t%e SM* 1t ma# lie an#$%ere for effi'ient 'om(ination Question # 1 of 15 ( Start time: 0;:5;:08 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! t%e t#pe of I#(rid or-aniJations0 Sele't 'orre't option: S6!#pe Corporation *imited *ia(ilit# 9artners%ip Sole 9roprietors%ip 9rofessional Corporation Question # 2 of 15 ( Start time: 0;:5;:18 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 'orre't/ if a firm %as a re,uired rate of return e,ual to t%e 8@+0 Sele't 'orre't option: !%e firm 'an in'rease mar"et pri'e and 9A+ (# retainin- more earnin-s) !%e firm 'an in'rease mar"et pri'e and 9A+ (# in'reasin- t%e -ro$t% rate) !%e amount of earnin-s retained (# t%e firm does not affe't mar"et pri'e or t%e 9A+) 7one of t%e -iven options Composed & Solved

Question # 3 of 15 ( Start time: 0;:55:13 AM !otal Mar"s: 1 1n $%i'% of t%e follo$in- approa'% #ou need to (rin- all t%e pro=e'ts to t%e same len-t% in time0 Sele't 'orre't option: M188 approa'% Koin- 'on'ern approa'% Common life approa'% +,uivalent annual approa'% Question # 4 of 15 ( Start time: 0;:55:21 AM !otal Mar"s: 1 Io$ e'onomi' value is added (+CA 'al'ulated0 Sele't 'orre't option: 1t is t%e differen'e (et$een t%e mar"et value of t%e firm and t%e (oo" value of e,uit# 1t is t%e firmGs net operatin- profit after ta2 (7@9A! less a dollar 'ost of 'apital '%ar-e 1t is t%e net in'ome of t%e firm less a dollar 'ost t%at e,uals .AAC multiplied (# t%e (oo" value of lia(ilities and e,uities 7one of t%e -iven option Question # 5 of 15 ( Start time: 0;:55:32 AM !otal Mar"s: 1 All of t%e follo$in- are t%e finan'ial statements used for t%e purpose of reportin- and anal#sis +VC+9!: Sele't 'orre't option: ?alan'e S%eet 1n'ome Statement Cas% (ud-et Statement of 8etained +arnin-s Question # ; of 15 ( Start time: 0;:55:40 AM !otal Mar"s: 1 .%i'% of t%e follo$in- refers to a %i-%l# 'ompetitive mar"et $%ere -ood (usiness ideas are ta"en up immediatel#0 Sele't 'orre't option: Capital mar"et +ffi'ient mar"et Mone# mar"et 8eal asset mar"et Composed & Solved

Question # 5 of 15 ( Start time: 0;:58:35 AM !otal Mar"s: 1 As interest rates -o up/ t%e present value of a stream of fi2ed 'as% flo$s &&&&&) Sele't 'orre't option: Koes do$n Koes up Sta#s t%e same Can not (e found from t%e -iven information Question # 8 of 15 ( Start time: 0;:58:58 AM !otal Mar"s: 1 .%i'% statement is 7@! true re-ardin- t%e mar"et portfolio0 Sele't 'orre't option: 1t in'ludes all pu(li'l# traded finan'ial assets 1t is t%e tan-en'# point (et$een t%e 'apital mar"et line and t%e indifferen'e 'urve All se'urities in t%e mar"et portfolio are %eld in proportion to t%eir mar"et values 1t lies on t%e effi'ient frontier Question # 9 of 15 ( Start time: 0;:59:0; AM !otal Mar"s: 1 .%at is t%e traditional approa'% to$ards t%e valuation of a 'ompan#0 Sele't 'orre't option: !%e 'ost of 'apital is independent of t%e 'apital stru'ture of t%e firm !%e firm maintains 'onstant ris" re-ardless of t%e t#pe of finan'in- emplo#ed !%ere e2ists no optimal 'apital stru'ture !%at mana-ement 'an in'rease t%e total value of t%e firm t%rou-% t%e =udi'ious use of finan'ial levera-e Question # 10 of 15 ( Start time: 0;:59:25 AM !otal Mar"s: 1 1f $e $ere to in'rease A?C 'ompan# 'ost of e,uit# assumption/ $%at $ould $e e2pe't to %appen to t%e present value of all future 'as% flo$s0 Sele't 'orre't option: An in'rease A de'rease 7o '%an-e 1n'omplete information Question # 11 of 15 ( Start time: 0;:59:45 AM !otal Mar"s: 1 A''ordin- to &&&&&&&&&&&/ t%e firmGs 'ost of e,uit# in'reases $it% -reater de(t finan'in-/ (ut t%e .ACC remains un'%an-ed) Composed & Solved

Sele't 'orre't option: M&M 9roposition 1 $it% ta2es M&M 9roposition 1 $it%out ta2es M&M 9roposition 11 $it%out ta2es M&M 9roposition 11 $it% ta2es Question # 12 of 15 ( Start time: 05:00:24 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! an e2ample of %#(rid e,uit# Sele't 'orre't option: Converti(le ?onds Converti(le Fe(enture Common s%ares 9referred s%ares Question # 13 of 15 ( Start time: 05:00:33 AM !otal Mar"s: 1 1f t%e pro(a(ilit# is $ritten on Y6a2is and t%e rate of return is mentioned on t%e V6a2is/ .%i'% "ind of relations%ip it s%o$s $%en t%ere is %i-%er t%e standard deviation t%e %i-%er t%e ris") Sele't 'orre't option: 1ndire't relations%ip 1nverse relations%ip Fire't relations%ip 7o relations%ip Question # 14 of 15 ( Start time: 05:00:50 AM !otal Mar"s: 1 .%en ta2es are 'onsidered/ t%e value of a levered firm e,uals t%e value of t%e&&&&&&&&) Sele't 'orre't option: :nlevered firm :nlevered firm plus t%e value of t%e de(t :nlevered firm plus t%e present value of t%e ta2 s%ield :nlevered firm plus t%e value of t%e de(t plus t%e value of t%e ta2 s%ield Question # 15 of 15 ( Start time: 05:00:59 AM !otal Mar"s: 1 .%at $ould (e t%e result $%en t%ere is an in'rease in t%e num(er of s%ares outstandin- (# redu'in- t%e par value of sto'"0 Sele't 'orre't option: Composed & Solved

Sto'" split Sto'" dividend +2tra dividend 8e-ular dividend Question # 1 of 15 ( Start time: 05:11:14 AM !otal Mar"s: 1 An annuit# due is al$a#s $ort% &&&&& a 'ompara(le annuit#) Sele't 'orre't option: *ess t%an More t%an +,ual to Can not (e found from t%e -iven information Question # 2 of 15 ( Start time: 05:11:35 AM !otal Mar"s: 1 .%i'% of t%e follo$informulas represents a 'orre't 'al'ulation of t%e de-ree of operatinlevera-e0 Sele't 'orre't option: (Q 6 Q?+ AQ (+?1! A (+?1! 6 >C BQ(96C D >CE ABQ(96C E Q(96C A BQ(96C 6 >CE Question # 3 of 15 ( Start time: 05:11:42 AM !otal Mar"s: 1 !%e $ei-%ted avera-e of possi(le returns/ $it% t%e $ei-%ts (ein- t%e pro(a(ilities of o''urren'e is referred to as &&&&&&&&&&) Sele't 'orre't option: 9ro(a(ilit# distri(ution +2pe'ted return Standard deviation Coeffi'ient of variation Question # 4 of 15 ( Start time: 05:12:01 AM !otal Mar"s: 1 .%i'% statement is 7@! true re-ardin- t%e mar"et portfolio0 Sele't 'orre't option: 1t in'ludes all pu(li'l# traded finan'ial assets 1t is t%e tan-en'# point (et$een t%e 'apital mar"et line and t%e indifferen'e 'urve All se'urities in t%e mar"et portfolio are %eld in proportion to t%eir mar"et values Composed & Solved

1t lies on t%e effi'ient frontier Question # 5 of 15 ( Start time: 05:12:10 AM !otal Mar"s: 1 .%i'% of t%e follo$in-s are t%e propositions of Modi-liani and MillerGs0 Sele't 'orre't option: !%e mar"et value of a firmGs 'ommon sto'" is independent of its 'apital stru'ture !%e mar"et value of a firmGs de(t is independent of its 'apital stru'ture !%e mar"et value of an# firm is independent of its 'apital stru'ture 7one of t%e -iven options Question # ; of 15 ( Start time: 05:12:33 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is simpl# t%e $ei-%ted avera-e of t%e possi(le returns/ $it% t%e $ei-%ts (ein- t%e pro(a(ilities of o''urren'e0 Sele't 'orre't option: 9ro(a(ilit# distri(ution +2pe'ted return Standard deviation Coeffi'ient of variation Question # 5 of 15 ( Start time: 05:13:35 AM !otal Mar"s: 1 .%at is a le-al a-reement/ also 'alled t%e deed of trust/ (et$een t%e 'orporation issuin(onds and t%e (ond%olders t%at esta(lis% t%e terms of t%e (ond issue0 Sele't 'orre't option: 1ndenture Fe(enture ?ond ?ond trustee Question # 8 of 15 ( Start time: 05:13:42 AM !otal Mar"s: 1 All of t%e follo$in- are t%e finan'ial statements used for t%e purpose of reportin- and anal#sis +VC+9!: Sele't 'orre't option: ?alan'e S%eet 1n'ome Statement Cas% (ud-et Statement of 8etained +arnin-s Composed & Solved

Question # 9 of 15 ( Start time: 05:13:50 AM !otal Mar"s: 1 A set of possi(le values t%at a random varia(le 'an assume and t%eir asso'iated pro(a(ilities of o''urren'e are referred to as &&&&&&&&&&) Sele't 'orre't option: 9ro(a(ilit# distri(ution !%e e2pe'ted return !%e standard deviation Coeffi'ient of variation Question # 10 of 15 ( Start time: 05:14:10 AM !otal Mar"s: 1 .%i'% of t%e follo$instatements (in -eneral is 'orre't0 Sele't 'orre't option: A lo$ re'eiva(les turnover is desira(le !%e lo$er t%e total de(t6to6e,uit# ratio/ t%e lo$er t%e finan'ial ris" for a firm An in'rease in net profit mar-in $it% no '%an-e in sales or assets means a $ea"er 8@1 !%e %i-%er t%e ta2 rate for a firm/ t%e lo$er t%e interest 'overa-e ratio Question # 11 of 15 ( Start time: 05:14:15 AM !otal Mar"s: 1 .%i'% of t%e follo$informula relates (eta of t%e sto'" to t%e standard deviation0 Sele't 'orre't option: Covarian'e of sto'" $it% mar"et Q varian'e of t%e mar"et Covarian'e of sto'" $it% mar"et A varian'e of t%e mar"et Carian'e of t%e mar"et A Covarian'e of sto'" $it% mar"et Slope of t%e re-ression line Question # 12 of 15 ( Start time: 05:14:25 AM !otal Mar"s: 1 1n t%e dividend dis'ount model/ &&&&&&& $%i'% of t%e follo$in- are not in'orporated into t%e dis'ount rate0 Sele't 'orre't option: 8eal ris"6free rate 8is" premium for sto'"s 8eturn on assets +2pe'ted inflation rate Question # 13 of 15 ( Start time: 05:14:35 AM !otal Mar"s: 1 !%e overall ($ei-%ted avera-e 'ost of 'apital is 'omposed of $ei-%ted avera-es of $%i'% of t%e follo$in-0 Composed & Solved

Sele't 'orre't option: !%e 'ost of 'ommon e,uit# and t%e 'ost of de(t !%e 'ost of 'ommon e,uit# and t%e 'ost of preferred sto'" !%e 'ost of preferred sto'" and t%e 'ost of de(t !%e 'ost of 'ommon e,uit#/ t%e 'ost of preferred sto'"/ and t%e 'ost of de(t Question # 14 of 15 ( Start time: 05:15:02 AM !otal Mar"s: 1 .%i'% -roup of ratios s%o$s t%e e2tent to $%i'% t%e firm is finan'ed $it% de(t0 Sele't 'orre't option: *i,uidit# ratios Fe(t ratios Covera-e ratios 9rofita(ilit# ratios Question # 15 of 15 ( Start time: 05:15:24 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! an e2ample of a finan'ial intermediar#0 Sele't 'orre't option: .is'onsin S&*/ a savin-s and loan asso'iation Stron- Capital Appre'iation/ a mutual fund Mi'rosoft Corporation/ a soft$are firm Colle-e Credit/ a 'redit union Question # 1 of 15 ( Start time: 05:20:55 AM !otal Mar"s: 1 A 'apital (ud-etinte'%ni,ue t%rou-% $%i'% dis'ount rate e,uates t%e present value of t%e future net 'as% flo$s from an investment pro=e't $it% t%e pro=e'tHs initial 'as% outflo$ is "no$n as: Sele't 'orre't option: 9a#(a'" period 1nternal rate of return 7et present value 9rofita(ilit# inde2 Question # 2 of 15 ( Start time: 05:21:24 AM !otal Mar"s: 1 A''ordin- to t%e Capital Asset 9ri'in- Model (CA9M / a $ell6diversified portfolioGs rate of return is a fun'tion of $%i'% of t%e follo$in-: Sele't 'orre't option: Composed & Solved

:ni,ue ris" 8einvestment ris" Mar"et ris" :ns#stemati' ris" Question # 3 of 15 ( Start time: 05:21:44 AM !otal Mar"s: 1 .%at is t%e e2pe'ted return of a Jero6(eta se'urit#0 Sele't 'orre't option: !%e ris"6free rate Rero rate of return A ne-ative rate of return !%e mar"et rate of return Question # 4 of 15 ( Start time: 05:21:52 AM !otal Mar"s: 1 .%at is t%e differen'e (et$een e'onomi' profit and a''ountin- profit0 Sele't 'orre't option: +'onomi' profit in'ludes a '%ar-e for all providers of 'apital $%ile a''ountin- profit in'ludes onl# a '%ar-e for de(t +'onomi' profit 'overs t%e profit over t%e life of t%e firm/ $%ile a''ountin- profit onl# 'overs t%e most re'ent a''ountin- period A''ountin- profit is (ased on 'urrent a''epted a''ountin- rules $%ile e'onomi' profit is (ased on 'as% flo$s All of t%e -iven options are 'orre't Question # 5 of 15 ( Start time: 05:21:59 AM !otal Mar"s: 1 1nvestors ma# (e $illin- to pa# a premium for sta(le dividends (e'ause of t%e informational 'ontent of &&&&&&&&&&/ t%e desire of investors for &&&&&&&&&&/ and 'ertain &&&&&&&&&&) Sele't 'orre't option: 1nstitutional 'onsiderations< dividends< 'urrent in'ome Fividends< 'urrent in'ome< institutional 'onsiderations Current in'ome< dividends< institutional 'onsiderations 1nstitutional 'onsiderations< 'urrent in'ome< dividends Question # ; of 15 ( Start time: 05:22:08 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e e2pe'ted 'as% dividend t%at is normall# paid to s%are%olders0 Sele't 'orre't option: Composed & Solved

Sto'" split Sto'" dividend +2tra dividend 8e-ular dividend Question # 5 of 15 ( Start time: 05:22:15 AM !otal Mar"s: 1 >or most firms/ 9A+ ratios and ris"&&&&&&&&&) Sele't 'orre't option: .ill (e dire'tl# related .ill %ave an inverse relations%ip .ill (e unrelated 7one of t%e a(ove) Question # 8 of 15 ( Start time: 05:22:25 AM !otal Mar"s: 1 .%ere t%e effi'ient sto'" 'om(ination of ris" and return in effi'ient mar"et s%ould lie0 Sele't 'orre't option: @n t%e SM* ?elo$ t%e SM* A(ove t%e SM* 1t ma# lie an#$%ere for effi'ient 'om(ination Question # 9 of 15 ( Start time: 05:22:34 AM !otal Mar"s: 1 .%i'% -roup of ratios s%o$s t%e e2tent to $%i'% t%e firm is finan'ed $it% de(t0 Sele't 'orre't option: *i,uidit# ratios Fe(t ratios Covera-e ratios 9rofita(ilit# ratios Question # 10 of 15 ( Start time: 05:22:58 AM !otal Mar"s: 1 A''ordin- to MM 11/ $%at %appens $%en a firmGs de(t6to6e,uit# ratio in'reases0 Sele't 'orre't option: 1ts finan'ial ris" in'reases 1ts operatin- ris" in'reases !%e e2pe'ted return on e,uit# in'reases !%e e2pe'ted return on e,uit# de'reases Composed & Solved

Question # 11 of 15 ( Start time: 05:23:18 AM !otal Mar"s: 1 .%# mar"ets and mar"et returns flu'tuate0 Sele't 'orre't option: ?e'ause of politi'al fa'tors ?e'ause of so'ial fa'tors ?e'ause of so'io6politi'al fa'tors ?e'ause of ma'ro s#stemati' fa'tors Question # 12 of 15 ( Start time: 05:23:2; AM !otal Mar"s: 1 .%i'% of t%e follo$informulas represents a 'orre't 'al'ulation of t%e de-ree of operatinlevera-e0 Sele't 'orre't option: (Q 6 Q?+ AQ (+?1! A (+?1! 6 >C BQ(96C D >CE ABQ(96C E Q(96C A BQ(96C 6 >CE Question # 13 of 15 ( Start time: 05:23:34 AM !otal Mar"s: 1 .%i'% of t%e follo$in-s e2pressed t%e proposition t%at t%e 'ost of e,uit# is a positive linear fun'tion of 'apital stru'ture0 Sele't 'orre't option: !%e Capital Asset 9ri'in- Model M&M 9roposition 1 M&M 9roposition 11 !%e *a$ of @ne 9ri'e Question # 14 of 15 ( Start time: 05:23:52 AM !otal Mar"s: 1 An 86#ear annuit# due %as a present value of 8s)1/000) 1f t%e interest rate is 5 per'ent/ t%e amount of ea'% annuit# pa#ment is 'losest to $%i'% of t%e follo$in-0 Sele't 'orre't option: 8s)154)53 8s)145)3; 8s)109)39 8s)104)52 Question # 15 of 15 ( Start time: 05:24:45 AM !otal Mar"s: 1 Composed & Solved

.%en ta2es are 'onsidered/ t%e value of a levered firm e,uals t%e value of t%e&&&&&&&&) Sele't 'orre't option: :nlevered firm :nlevered firm plus t%e value of t%e de(t :nlevered firm plus t%e present value of t%e ta2 s%ield :nlevered firm plus t%e value of t%e de(t plus t%e value of t%e ta2 s%ield Question # 1 of 15 ( Start time: 05:34:43 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e main o(=e'tive of Z+'onomi'sH0 Sele't 'orre't option: 9rofit ma2imiJation Ma2imiJation of s%are%olders $ealt% Colle'tion of a''urate/ s#stemati'/ and timel# finan'ial data All of t%e -iven options Question # 2 of 15 ( Start time: 05:34:51 AM !otal Mar"s: 1 Mar"et ris" is measured in terms of t%e &&&&&&&&&&& of t%e mar"et portfolio or inde2) Sele't 'orre't option: Carian'e Covarian'e Standard deviation Correlation 'oeffi'ient Question # 3 of 15 ( Start time: 05:35:10 AM !otal Mar"s: 1 .%# $e need Capital rationin-0 ( Sele't 'orre't option: ?e'ause/ t%ere are not enou-% positive 79C pro=e'ts ?e'ause/ 'ompanies do not al$a#s %ave a''ess to all of t%e funds t%e# 'ould ma"e use of ?e'ause/ mana-ers find it diffi'ult to de'ide %o$ to fund pro=e'ts ?e'ause/ (an"s re,uire ver# %i-% returns on pro=e'ts Question # 4 of 15 ( Start time: 05:35:34 AM !otal Mar"s: 1 1f ris" and return 'om(ination of an# sto'" is a(ove t%e SM*/ $%at does it mean0 Sele't 'orre't option: 1t is offerin- lo$er rate of return as 'ompared to t%e effi'ient sto'" 1t is offerin- %i-%er rate of return as 'ompared to t%e effi'ient sto'" Composed & Solved

1ts rate of return is Jero as 'ompared to t%e effi'ient sto'" 1t is offerin- rate of return e,ual to t%e effi'ient sto'" Question # 5 of 15 ( Start time: 05:35:5; AM !otal Mar"s: 1 Io$ e'onomi' value is added (+CA 'al'ulated0 Sele't 'orre't option: 1t is t%e differen'e (et$een t%e mar"et value of t%e firm and t%e (oo" value of e,uit# 1t is t%e firmGs net operatin- profit after ta2 (7@9A! less a dollar 'ost of 'apital '%ar-e 1t is t%e net in'ome of t%e firm less a dollar 'ost t%at e,uals .AAC multiplied (# t%e (oo" value of lia(ilities and e,uities 7one of t%e -iven option Question # ; of 15 ( Start time: 05:3;:05 AM !otal Mar"s: 1 1f all t%in-s e,ual/ $%en diversifi'ation is most effe'tive0 Sele't 'orre't option: Se'uritiesG returns are positivel# 'orrelated Se'uritiesG returns are un'orrelated Se'uritiesG returns are %i-% Se'uritiesG returns are ne-ativel# 'orrelated Question # 5 of 15 ( Start time: 05:3;:12 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is 7@! t%e step of 9er'enta-e of sales to (e used in >inan'ial >ore'astin-0 Sele't 'orre't option: +stimate #ear6(#6#ear Sales 8evenue and +2penses +stimate *evels of 1nvestment 7eeds re,uired to Meet +stimated Sales +stimate t%e >inan'in- 7eeds +stimate t%e retained earnin-s Question # 8 of 15 ( Start time: 05:3;:21 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e 'as% re,uired durin- a spe'ifi' period to meet interest e2penses and prin'ipal pa#ments0 Sele't 'orre't option: Fe(t 'apa'it# Fe(t6servi'e (urden Ade,ua'# 'apa'it# >i2ed6'%ar-e (urden Composed & Solved

Question # 9 of 15 ( Start time: 05:3;:29 AM !otal Mar"s: 1 C%oose amon- t%e follo$in-s/ t%e 'orre't statement re-ardin- ever# =ournal entr#) Sele't 'orre't option: Sum of Fe(its N Sum of Credits Sum of Fe(its OSum of Credits Sum of Fe(its P Sum of Credits 7one of t%e -iven options Question # 10 of 15 ( Start time: 05:3;:3; AM !otal Mar"s: 1 .%i'% of t%e follo$in- is an e2ample of restru'turin- t%e firm0 Sele't 'orre't option: Fividends are in'reased from 8s)1 to 8s)2 per s%are A ne$ investment in'reases t%e firmGs (usiness ris" 7e$ e,uit# is issued and t%e pro'eeds repa# de(t A ne$ ?oard of Fire'tors is ele'ted to t%e firm Question # 11 of 15 ( Start time: 05:3;:58 AM !otal Mar"s: 1 !%e 8?S pa#s 5);0M/ 'ompounded dail# ((ased on 3;0 da#s / on a 96mont% 'ertifi'ate of deposit/ if #ou deposit 8s)20/ 000 #ou $ould e2pe't to earn around &&&&&&&&&& in interest) Sele't 'orre't option: 8s)840 8s)858 8s)1/032 8s)1/121 Question # 12 of 15 ( Start time: 05:35:05 AM !otal Mar"s: 1 .%i'% of t%e follo$in- is t%e ma2imum amount of de(t (and ot%er fi2ed6'%ar-e finan'int%at a firm 'an ade,uatel# servi'e0 Sele't 'orre't option: Fe(t 'apa'it# Fe(t6servi'e (urden Ade,ua'# 'apa'it# >i2ed6'%ar-e (urden Question # 13 of 15 ( Start time: 05:35:12 AM !otal Mar"s: 1 Composed Solved
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:pon $%i'% of t%e follo$in- a firmGs de-ree of operatinlevera-e (F@* depends primaril#0 Sele't 'orre't option: Sales varia(ilit# *evel of fi2ed operatin- 'osts Closeness to its operatin- (rea"6even point Fe(t6to6e,uit# ratio Question # 14 of 15 ( Start time: 05:35:19 AM !otal Mar"s: 1 :pon $%i'% of t%e follo$in- a firmGs de-ree of operatinlevera-e (F@* depends primaril#0 Sele't 'orre't option: Sales varia(ilit# *evel of fi2ed operatin- 'osts Closeness to its operatin- (rea"6even point Fe(t6to6e,uit# ratio Question # 15 of 15 ( Start time: 05:35:43 AM !otal Mar"s: 1 .%i'% statement is 7@! true re-ardin- t%e mar"et portfolio0 Sele't 'orre't option: 1t in'ludes all pu(li'l# traded finan'ial assets 1t is t%e tan-en'# point (et$een t%e 'apital mar"et line and t%e indifferen'e 'urve All se'urities in t%e mar"et portfolio are %eld in proportion to t%eir mar"et values 1t lies on t%e effi'ient frontier

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Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group

Vuhelp groupNote Vuhelp group