Fin 550 Final Exam Part 1 and 2
The five major classes of ratios include the following, except
Which of the following statements regarding financial risk and business risk is true?
Which of the following is not a flow ratio?
Which of the following ratios is not a measurement of the firm’s liquidity?
A common-size income statement expresses all income statement items
The growth rate of equity earnings without external financing is equal to
The most appropriate discount rate to use when applying the Operating Free Cash Flows model is the firm’s
All of the following are ways in which a firm can increase its growth rate of equity earnings without any external financing except
Which of the following is an underlying assumption of the constant growth dividend discount model (DDM)?
Dividend growth is a function of
The dividend payout ratio for the aggregate market is 65 percent, the required rate of return is 13 percent, and the expected growth rate for dividends is 8 percent. Compute the current earnings multiple.
The correlation of stock market returns between the U.S. and Japan is ____ and ____.
Which of the following economic series are included in the NBER lagging indicator series?
The growth rate will most likely increase if the:
If, for the S&P Industrials Index, the profit margin was .25 and the equity turnover ratio was 12, the ROE would be:
At what stage in the industrial life cycle is there an influx of competition?
To estimate earnings per share an analyst will start by estimating
During a recession,
In which industrial life cycle stage do sales correlate highly with an economic series or the economy in general?
Which of the following is not characteristic of the “decline” phase of the industry life cycle?
A speculative stock possesses a ____ probability of ____ return and is currently ____.
Which of the following is not considered when looking at free cash flow to equity technique?
Under the present value of operating free cash flow technique, the firm’s operating free cash flow to the firm is discounted at the firm’s
In Berkshire Hathaway annual reports Warren Buffett highlights financial tenets that he believes are important. Which of the following is not a financial tenet of Warren Buffett?
Which of the following statements concerning SWOT analysis is false?
Fin 550 Final Exam Part 2
A stock currently sells for $75 per share. A put option on the stock with an exercise price $70 currently sells for $0.50. The put option is
Which of the following is consistent with put-call-spot parity?
An advantage of a forward contract over a futures contract is that
The cost of carry includes all of the following except
A call option in which the stock price is higher than the exercise price is said to be
The basis (Bt,T) at time t between the spot price (St) and a futures contract expiring at time T (Ft,T) is
The bond that maximizes the difference between the invoice price and the delivery price is referred to as the
An investor who wants a long position in a ____ must first place the order with a broker, who then passes it on to the trading pit or electronic network. Details of the order are then passed on to the exchange clearinghouse.
When F0,T > E(ST) it is known as
According to the cost of carry model the relationship between the spot (S0) and futures price (F0,T) is
A vertical spread involves buying and selling call options in the same stock with
In a money spread, an investor would
In the Black-Scholes option pricing model, an increase in time to expiration (T) will cause
The Black-Scholes model assumes that stock price movements can be described by
Which of the following is not a variable required to determine an option’s value in the Black-Scholes valuation model?
Investment companies or mutual funds that continue to sell and repurchase shares after their initial public offerings are referred to as
Investing in emerging markets can be viewed as a global application of
The Securities Act of 1933
Which of the following are guiding principles for ethical behavior in the asset management industry as put forward by the CFA Center for Financial Market Integrity?
An investment vehicle that acts like a mutual fund of hedge funds, and allows investors access to managers that might otherwise be unavailable is known as
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