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1) bankruptcy filings in the united states:
a.are mostly personal bankruptcies
b.are mostly business bankruptcies
c.are evenly divided between personal and business bankruptcies
d.none of the above
2) which of the following firms is most likely to pay out a larger portion of their
earnings to shareholders?
a.a small company
b.a mature company
c.a young company
d.a growth company
3) an annuity is considered:
a.an ordinary annuity if the payments occur at the beginning of each period
b.an annuity due if the payments occur at the end of each period
c.an ordinary annuity if the payments occur at the end of each period
d.an annuity due if the payments occur at the beginning of each period
e.both (c) and (d)
4) roxy records, records the following cash flows at the end of each year for a project. if
the firm's discount rate is 11%, what is the future value of the project?
a.$4,293,253
b.$2,547,837
c.$4,200,696
d.$4,657,524
5) rico pagano holds the stock of nosbitzh & company. pagano is concerned that over
the next 6 months the stock of nozbitzh & co. may fall by 20%. to protect the value of
his position, pagano could
a.sell a naked call
b.buy a protective put
c.sell a protective put
d.buy a call
6) in the year just ended, ellie mays power tools had net income of $200,000 based
upon a sales level of $1,500,000. its total assets are $800,000 while its total equity is
$700,000. if ellie may pays out 0% of its net income in dividends, then what is the firms
sustainable growth rate going forward?
a..40%
b.38%
c.40%
d.none of the above
7) for a typical callable bond, what is the call price for 12% coupon bond?
a.$880
b.$1,000
c.$1,120
d.there is not enough information to determine
8) a portfolio has 40% invested in asset 1 and 60% invested in asset 2. if asset 1 has a
beta of 1.2 and asset 2 has a beta of 1.8, whats the beta of the portfolio?
a.1.50
b.1.56
c.1.20
d.1.80
e.cannot tell from the given information
9) considering the following information what is the value of the call?
a.$7.50
b.$4.38
c.$4.17
d.$4.00
10) you are contemplating leasing a new car. the monthly lease payments (to be made at
the end of each months) are for 36 months. at the end of the lease you have the option
of purchasing the car for $17,800. if you could finance the car at 5.9% for the same
period, what is the most that you should be willing to pay in monthly lease payments if
the sticker price of the car is $25,800?
a.$331
b.$299
c.$413
d.$199
11) you are a venture capitalist who can invest only $10 million dollars in a firm today.
the firm is expected to be worth $100 million five years from now when it has its ipo. if
you require to be a 50% owner of the firms common stock at the time of the ipo, then
what is your annualized rate of return on this investment?
a.158.49%
b.100.00%
c.37.97%
d.none of the above
12) smith enterprises declares a 4-1 stock spilt. if you own 600 shares of smith stock,
how many share do you own after the split?
a.600
b.150
c.2400
d.1200
