1) liabilities equal approximately _____ of total assets for nonfinancial u.s. businesses.
a.10%
b.25%
c.48%
d.75%
2) use the following cash flow data of haven hardware for the year ended december 31,
2012.
what is the net cash provided by or used in investing activities of haven hardware?
a.-$12,000
b.-$62,000
c.$12,000
d.$164,000
3) which of the following are not managed investment companies?
a.hedge funds
b.unit investment trusts
c.closed-end funds
d.open-end funds
4) ______________ is an important characteristic of the relationship between bond
prices and yields.
a.convexity
b.concavity
c.complexity
d.linearity
5) a retirement plan that offers a tax shelter will defer ______________ taxes on
contributions and investment earnings.
a.income
b.sales
c.property
d.estate
6) a coupon bond that pays interest semiannually has a par value of $1,000, matures in
8 years, and has a yield to maturity of 6%. if the coupon rate is 7%, the intrinsic value
of the bond today will be __________.
a.$1,000
b.$1,062.81
c.$1,081.82
d.$1,100.03
7) a firm has a stock price of $54.75 per share. the firm’s earnings are $75 million, and
the firm has 20 million shares outstanding. the firm has an roe of 15% and a plowback
of 65%. what is the firm’s peg ratio?
a.1.5
b.1.25
c.1.1
d.1
8) the prudent investor rule requires __________.
a.executives of companies to avoid investing in options of companies they work for
b.executives of companies to disclose their transactions in stocks of companies they
work for
c.professional investors who manage money for others to avoid all risky investments
d.professional investors who manage money for others to constrain their investments to
those that would be approved by a prudent investor
9) taxes are applied to the _______________________.
a.real value of sheltered investment income
b.nominal value of unsheltered investment income
c.nominal value of sheltered investment income
d.real value of unsheltered investment income
10) in the mean standard deviation graph, the line that connects the risk-free rate and
the optimal risky portfolio, p, is called the _________.
a.capital allocation line
b.indifference curve
c.investor’s utility line
d.security market line
11) you earned 8% on your corporate bond portfolio this year, and you are in a 15%
federal tax bracket. if over your holding period inflation was 3%, your real after-tax rate
of return was _____.
a.6.8%
b.3.69%
c.4.91%
d.4.25%
12) the ____ requires full disclosure of relevant information relating to the issue of new
securities.
a.insider trading act of 1931
b.securities act of 1933
c.securities exchange act of 1934
d.investment company act of 1940
13) according to the internationalcountryriskguide in 2011, which of the following
countries was the riskiest according to the current composite risk rating?
a.japan
b.united states
c.china
d.india
14) the process of decomposing roe into a series of component ratios is called
______________.
a.dupont analysis
b.technical analysis
c.comparative analysis
d.liquidity analysis
15)
refer to the above figures. which of the following events would most likely result in
higher unemployment?
a.a shift from d2 to d1 in figure a.
b.a shift from d2 to d3 in figure a.
c.a shift from d2 to d1 in figure b.
d.a shift from d2 to d3 in figure b.
16) the market value of all goods and services produced during a given time period is
called ______.
a.gdp
b.industrial production
c.capacity utilization
d.factory orders
17) asset allocation refers to _________.
a.the allocation of the investment portfolio across broad asset classes
b.the analysis of the value of securities
c.the choice of specific assets within each asset class
d.none of these options
18) the historical average rate of return on large company stocks since 1926 has been
_____.
a.5%
b.8%
c.12%
d.20%
19) you would expect the beta of cyclical industries to be ______ and the beta of
defensive industries to be ______.
a.greater than 1; less than 1
b.less than 1; less than 1
c.less than 1; greater than 1
d.greater than 1; greater than 1
20) pharmaceuticals, food, and other necessities would be good performers during the
____ stage of the business cycle.
a.peak
b.contraction
c.trough
d.expansion