1) The issuer has no price risk in a firm commitment offering once the offer price is set.
2) The United States economy has little influence on the economies of other nations.
3) An indirect exchange rate quotation is simply the reciprocal of a direct exchange rate
quotation.
4) Firm commitment flotation costs are typically lower than those of best efforts.
5) At a zero interest rate, the present value of $1 remains at $1 and is not affected by
time.
6) The term ex-ante refers to the past or historical information.
7) The term ex-ante refers to expected or forecasted information.
8) Precautionary motives for holding cash include holding funds to take advantage of
unusual cash discounts for needed materials.
9) The interest paid on bonds issued by corporations in the United States is tax
deductible to the issuing corporation.
10) The only relevant risk for investors that hold diversified portfolios of securities is
nondiversifiable risk.
11) The variance is the square root of the standard deviation.
12) The method of calculating the annual percentage rate (APR) is set by law.
13) The present value of a $100 annuity deposited for 10 years at 10% is $1,593.74.
14) Contractual savings are financial assets set aside for use in the future.
15) A market system that allows for quick execution of customers trades is said to be
informationally efficient.
16) Purchasing power parity (PPP) states that the currency of a country with relatively
higher inflation will depreciate relative to the currency of a country with a relatively
lower inflation rate.
17) In employing DuPont analysis, the user would break the return on total assets into
the profit margin, total asset turnover, and an equity multiplier.