A note is a(n):
A. unsecured debt that is generally payable within the next 10 years.
B. formal type of loan that is secured by real estate.
C. long-term debt secured by part, or all, of the assets of the borrower.
D. debt that is secured by a borrowers accounts receivable.
E. written agreement that details the information relative to a bond issue.
You have $1,100 today and want to triple your money in 5 years. What interest rate
must you earn if the interest is compounded annually?
A. 18.08 percent
B. 19.90 percent
C. 22.15 percent
D. 24.57 percent
E. 27.21 percent
If the financial markets are semistrong form efficient, then:
A. only the most talented analysts can determine the true value of a security.
B. only individuals with private information have a marketplace advantage.
C. technical analysis provides the best tool to use to gain a marketplace advantage.
D. no one individual has an advantage in the marketplace.
E. every security offers the same rate of return.
This morning, Jeff found a bond certificate lying on the floor of a bank. He picked it up
and noticed that the bond matured today. He presented the bond to the bank teller and
received both the principal and interest payment. The bond that Jeff found must have
been which one of the following?
A. Debenture
B. Note
C. Registered form bond
D. Bearer form bond
E. Callable bond
The Blackwell Group is unable to obtain financing for any new projects under any
circumstances. Which term best applies to this situation?
A. Contingency planning
B. Soft rationing
C. Hard rationing
D. Sensitivity analysis
E. Scenario analysis
Eurobonds are best defined as international bonds issued in _____ and denominated in
____.
A. a single country; multiple currencies
B. a single country; a single currency
C. multiple countries; multiple currencies
D. multiple countries; a single currency
E. Euroland; euros
Which one of the following statements related to stock buybacks is correct?
A. Stock buybacks are a means of obtaining shares for employee stock option grants.
B. Stock buybacks are becoming rare and may soon disappear totally.
C. In 2007 and 2008, U.S. companies issued more shares than they repurchased.
D. Firms are permitted only one large share repurchase program.
E. Share repurchases are limited to 10 percent of the firms outstanding shares.
The Food Store is planning a major expansion for four years from today. In preparation
for this, the company is setting aside $35,000 each quarter, starting today, for the next
four years. How much money will the firm have when it is ready to expand if it can
earn an average of 6.25 percent on its savings?
A. $528,409.29
B. $540,288.16
C. $610,411.20
D. $640,516.63
E. $662,009.14
Which one of the following decreases net income but does not affect the operating cash
flow of a firm that owes no taxes for the current year?
A. Indirect cost
B. Direct cost
C. Noncash item
D. Period cost
E. Variable cost
Which one of the following best states the primary goal of inventory management?
A. Minimize the number of orders per year
B. Minimize the average inventory level
C. Minimize total inventory costs
D. Minimize the level of inventory for the most expensive items
E. Minimize opportunity costs
Donuts Delite just paid an annual dividend of $1.10 a share. The firm expects to
increase this dividend by 8 percent per year the following three years and then decrease
the dividend growth to 2 percent annually thereafter. Which one of the following is the
correct computation of the dividend for year 7?
A. ($1.10) (1.08 x 3) (1.02 x 4)
B. ($1.10) (1.08 x 3) (1.02 x 3)
C. ($1.10) (1.08)3 (1.02)4
D. ($1.10) (1.08)3 (1.02)3
E. ($1.10) (1.08)3 (1.02)2