1) the financial statements of burnaby mountain trading company are shown below.
note: the common shares are trading in the stock market for $27 each.
refer to the financial statements of burnaby mountain trading company. the firm’s
fixed-asset turnover ratio for 2012 is _________. (please keep in mind that when a ratio
involves both income statement and balance sheet numbers, the balance sheet numbers
for the beginning and end of the year must be averaged.)
a.2.8
b.6
c.9
d.11.11
2) a bond’s price volatility _________ at _________ rate as maturity increases.
a.increases; an increasing
b.increases; a decreasing
c.decreases; an increasing
d.decreases; a decreasing
3) webs differ from mutual funds in that:
i. webs can be shorted.
ii. webs trade continuously on the amex.
iii. webs are passively managed.
a.ii only
b.ii and iii only
c.i and iii only
d.i, ii, and iii
4) the daily settlement of obligations on futures positions is called _____________.
a.a margin call
b.marking to market
c.a variation margin check
d.the initial margin requirement
5) the yen-per-dollar spot rate is 104. the yen-per-dollar forward rate is 107. if the u.s.
risk-free rate is 2.4%, what is the likely yen risk-free rate?
a.1.24%
b.2.35%
c.3.98%
d.5.35%
6) the ebit of a firm is $300, the tax rate is 35%, the depreciation is $20, capital
expenditures are $60, and the increase in net working capital is $30. what is the free
cash flow to the firm?
a.$85
b.$125
c.$185
d.$305
7) which of the following is most closely related to recessions?
a.positive long-run economic growth
b.rapid growth in the price level
c.falling rates of unemployment
d.negative growth in output
8) active portfolio managers try to construct a risky portfolio with _______.
a.a higher sharpe ratio than a passive strategy
b.a lower sharpe ratio than a passive strategy
c.the same sharpe ratio as a passive strategy
d.very few securities
9) in recent years the greatest dollar amount of securitization occurred for which type of
loan?
a.home mortgages
b.credit card debt
c.automobile loans
d.equipment leasing
10) consider the liquidity preference theory of the term structure of interest rates. on
average, one would expect investors to require _________.
a.a higher yield on short-term bonds than on long-term bonds
b.a higher yield on long-term bonds than on short-term bonds
c.the same yield on both short-term bonds and long-term bonds
d.none of these options (the liquidity preference theory cannot be used to make any of
the other statements.)