M1 money supply consists of currency, travelers’ checks, demand deposits, and other
checkable deposits.
A firm’s cost of capital is the discount rate used in the evaluation of capital budgeting
projects using payback and IRR.
The prime rate of interest has been relatively stable during the past twenty-five years.
The coefficient of variation is a measure of total return on a stock.
If a market is semi-strong form efficient, it also is by definition weak-form efficient.
The minimum required rate of return is a weighted average of the firm’s cost of various
sources of capital.
A central bank defines and regulates the amount of the money supply in the financial
system.
Operating leverage is affected by such items as rental payments, contractual employee
salaries, and general and administrative overhead expenses.
The principle of finance that “reputation matters” implies that for institutions or
businesses to be successful, they must have the trust and confidence of their customers,
employees, and owners, as well as the community and society within which they
operate.
Potential creditors of a firm might analyze financial statements to gauge the firm’s
ability to make timely payments of interest and principal.