The Priceville Bull Dogs offers credit terms of 2/15, net 40 to all of its customers.
Historically, 80 percent of its customers take advantage of the discount. What is the
firms average collection period?
A. 17.60 days
B. 17.87 days
C. 18.20 days
D. 20.33 days
E. 21.08 days
Fried Foods has sales of $238,900, total assets of $217,000, total equity of $121,300,
net income of $18,700, and dividends paid of $7,000. What is the internal growth rate?
A. 5.48 percent
B. 5.70 percent
C. 5.98 percent
D. 7.34 percent
E. 7.92 percent
If you have three thousand euros, how many dollars do you have given the following
exchange rates?
in U.S Per U.S
Euro 1.3266 0.7538
A. $2,261.42
B. $2,608.14
C. $3,211.09
D. $3,979.80
E. $4,216.50
Which one of the following is defined as the average compound return earned per year
over a multiyear period?
A. Geometric average return
B. Variance of returns
C. Standard deviation of returns
D. Arithmetic average return
E. Normal distribution of returns
Which one of the following is true concerning a controlled disbursement account?
A. The number of checks that can be disbursed on any one day is limited.
B. The bank will inform the firm of the amount that needs to be transferred on a daily
basis.
C. The amount that can be disbursed on any given day is limited to the balance in the
account when the bank opens in the morning.
D. The total number of checks that can be written in any one month is limited.
E. The amount of the disbursements is limited to the amount the firm has available on
its bank line of credit.
Noahs Landing stock is expected to produce the following returns given the various
states of the economy. What is the expected return on this stock?
A. 4.05 percent
B. 4.23 percent
C. 4.51 percent
D. 5.47 percent
E. 20.26 percent
A real rate of return is defined as a rate that has been adjusted for which one of the
following?
A. Inflation
B. Interest rate risk
C. Taxes
D. Liquidity
E. Default risk
A stock produced returns of 16 percent, 9 percent, and 21 percent over three of the past
four years, respectively. The arithmetic average for the past four years is 10 percent.
What is the standard deviation of the stocks returns for the four-year period?
A. 6.82 percent
B. 8.54 percent
C. 9.09 percent
D. 10.83 percent
E. 11.75 percent
Forecasting risk is best defined as:
A. reality risk.
B. value risk.
C. potential risk.
D. management risk.
E. estimation risk.
Youve just found a 7 percent coupon bond on the market that sells for par value. What
is the maturity on this bond?
A. The bond must mature in 1 year.
B. The bond could have any maturity date.
C. The bond must be maturing today.
D. The bond must mature in 10 years.
E. None of these are correct.
Kate owns a stock with a market price of $31 per share. This stock pays a constant
annual dividend of $0.60 per share. If the price of the stock suddenly increases to $36 a
share, you would expect the:I. dividend yield to increase.II. dividend yield to
decrease.III. capital gains yield to increase.IV. capital gains yield to decrease.
A. I only
B. II only
C. III only
D. I and III only
E. II and IV only
The average risk premium on long-term government bonds for the period 1926-2011
was equal to:
A. zero.
B. 1 percent.
C. the rate of return on the bonds plus the corporate bond rate.
D. the rate of return on the bonds minus the T-bill rate.
E. the rate of return on the bonds minus the inflation rate.