1) which type of institution is in a unique position to bear exchange rate risk by creating
a natural hedge?
a.national banks
b.multinational corporations
c.large corporations
d.international banks
2) the irr is analogous to:
a.a bonds current yield
b.a stocks dividend yield
c.a bonds yield-to-maturity
d.a stocks yield to maturity
3) narrbegin: exhibit 17-2
exhibit 23-2
coffee; 37,500 lbs per contract, $ per lb. may 2004
narrend
refer to exhibit 23-2. what was the lowest contract price for coffee futures for june
delivery on this trading day?
a.$39,375
b.$37,500
c.$38,625
d.$42,000
4) you checked the /$ exchange rate today and you found that one dollar cost you
0.8214. when you checked the three months (90 day) /$ forward exchange rate one
dollar was trading at 0.8026. what is the annualized forward premium (discount) for the
dollar?
a.2.29%
b.-2.29%
c.9.16%
d.-9.16%
5) one characteristic of share privatizations is
a.that they are generally much larger than the ipos of their private-sector counterparts
b.that they are generally much smaller than the ipos of their private-sector counterparts
c.that the decision to privatize is made solely on economic grounds
d.none of the above
6) bavarian sausage, inc. has a cost equity of 22% and a beta of 1.8. the expected
market return is 14%. what is the risk-free rate?
a.4%
b.22%
c.8%
d.12%
7) narrbegin: bavarian brewhouse
bavarian brewhouse
capital structure information for bavarian brewhouse
narrend
what is bavarian brewhouses after tax cost of debt, if their marginal tax rate equals
34%?
a.8.00%
b.5.28%
c.6.95%
d.2.72%
8) in the equation below, the number 100 represents
$75.13 = $100 / (1 + .1)3
a.the present value a cash flow to be received at a later date
b.the future value a cash flow to be received at a later date
c.the discount rate for the future cash flow
d.the number of periods before the cash flow is to be received
9) the key difference between valuing vc investment and other kinds of investments is
that:
a.the expected returns do not need to be as high because the risk of most vc investments
is not as high as most other types of investments
b.the expected return must be quite high because the risk of most vc investments is
much higher than most other types of investments
c.the expected returns must be about the same because the risk of most vc investments
is about the same as most other types of investments
d.none of the above
10) louis incorporated expects non-normal dividend growth over the next three years;
that is a 10% growth rate in the first year, then 20%, and then 25% followed by growth
of 5% thereafter. if the last dividend paid was $0.25 and the appropriate discount rate is
12%; what is the price of the stock today?
a.$5.18
b.$5.46
c.$6.19
d.$4.40
11) which of the following is issued by the firm that grants investors the right to buy
shares of stock at a fixed price, for a given period of time?
a.stock futures
b.put options
c.warrants
d.none of the above
12) a “broker market” is:
a.when buyers and sellers contact each other directly to arrange an exchange of
securities
b.a market in which the buyer and seller are not brought together directly but, rather,
have their orders executed by securities dealers
c.a market in which buyers and sellers are brought together on a securities exchange to
trade securities
d.none of the above