Archives: Quiz
Investments & Securities Chapter 20 1 assuming positive basis and negligible borrowing cost, which of the following transactions could yield positive arbitrage profits if pursued by a hedge fund
1. Which of the following are characteristics of a hedge fund? I. Pooling of assets II. Strict regulatory oversight by the SEC III. Investing in equities, debt instruments, and derivative instruments IV. Professional management of assets A. I and II […]
Finance Chapter 8 2 Auditors who prefer statistical sampling to non statistical sampling may do so because statistical sampling helps the auditor
Chapter 08 – Audit Sampling: An Overview and Application to Tests of Controls 38. Which of the following best describes the distinguishing feature of statistical sampling? A. It requires the examination of a smaller number of supporting documents. B. It […]
Investments & Securities Chapter 20 2 consider a hedge fund with $250 million in assets at the start of the year. if the gross return on assets is 18% and the total expense ratio
35. Consider a hedge fund with $250 million in assets at the start of the year. If the gross return on assets is 18% and the total expense ratio is 2.5% of the year–end value, what is the rate of […]
Finance Chapter 8 1 Attribute sampling is used to estimate the proportion of a population that possesses a specified characteristic
Chapter 08 – Audit Sampling: An Overview and Application to Tests of Controls 1. Auditing standards permit both statistical and nonstatistical methods of audit sampling. TRUE AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Risk Analysis Blooms: Remember Difficulty: 1 […]
Investments & Securities Chapter 19 2 all exchange rates are expressed as units of foreign currency that can be purchased with one dollar answer the following about decomposing the manager’s performance
42. WEBS are _____________. A. mutual funds marketed internationally on the Internet B. synthetic domestic stock indexes C. equity indexes that replicate the price and yield performance of foreign stock portfolios D. single stock investments in a foreign security AACSB: […]
Finance Chapter 7 2 When testing a computerized accounting system, which of the following is false regarding the test data approach
Chapter 07 – Auditing Internal Control over Financial Reporting 42. Which of the following statements included in management’s assessment of the effectiveness of internal control over financial reporting would be considered acceptable for issuing an unqualified opinion? A. Nothing has […]
Investments & Securities Chapter 19 1 a fund has assets denominated in euros and liabilities in yen due in 6 months. the 6- month forward rate for the euro is $1.36 per euro
1. In 2011, U.S. securities represented ______ of the world market for equities. A. less than 25% B. more than two-thirds C. between 30% and 40% D. a consistent 50% AACSB: Analytic Blooms: Remember Difficulty: 2 Medium Learning Objective: 19-01 […]
Finance Chapter 7 1 In a public company, management’s report on internal control must be signed by the members of the audit committee
Chapter 07 – Auditing Internal Control over Financial Reporting 1. All companies must follow the guidelines of AS5. FALSE AACSB: Communication AICPA BB: Industry AICPA FN: Decision Making Blooms: Remember Difficulty: 1 Easy Learning Objective: 07-01 Understand management’s responsibilities for […]
Investments & Securities Chapter 18 3 which of the following investment strategies would have produced the highest returns in the time period since 1926
62. The table presents the actual return of each sector of the manager’s portfolio in column (1), the fraction of the portfolio allocated to each sector in column (2), the benchmark or neutral sector allocations in column (3), and the […]
Finance Chapter 6 3 After the auditor has prepared a flowchart of the internal controls surrounding sales and evaluated the design of the system
Chapter 06 – Internal Control in a Financial Statement Audit 81. Which of the following is a general control that would most likely assist an entity whose systems analyst left the entity in the middle of a major project? A. […]
Investments & Securities Chapter 18 2 one hundred fund managers enter a contest to see how many times in 13 years they can earn a higher return than their competitors
29. The M 2 measure of portfolio performance was developed by ______________. A. Modigliani and Miller B. Modigliani and Modigliani C. Merton and Miller D. Fama and French AACSB: Analytic Blooms: Remember Difficulty: 1 Easy Learning Objective: 18-01 Compute risk-adjusted […]
Finance Chapter 6 2 During consideration of internal control in a financial statement audit of a nonpublic company, an auditor is not obligated to
Chapter 06 – Internal Control in a Financial Statement Audit 50. A substantive strategy differs from a reliance strategy in that a substantive strategy includes A. Increased implementation of detailed tests of transactions and balances. B. Extra tests of controls. […]
Investments & Securities Chapter 18 1 which one of the following averaging methods is the preferred method of constructing returns series for use in evaluating portfolio performance
1. A mutual fund with a beta of 1.1 has outperformed the S&P 500 over the last 20 years. We know that this mutual fund manager _____. A. must have had superior stock selection ability. B. must have had superior […]
Finance Chapter 6 1 Which of the following most likely would not be considered an inherent limitation of the potential effectiveness of an entity’s internal controls
Chapter 06 – Internal Control in a Financial Statement Audit 1. The concept of internal control includes IT systems and manual systems. TRUE AACSB: Analytic AICPA BB: Industry AICPA FN: Risk Analysis Blooms: Remember Difficulty: 1 Easy Learning Objective: 06-04 […]
Investments & Securities Chapter 17 2 the student loan marketing association has short-term student loans funded by long-term debt. to hedge out this interest rate risk
51. An investor establishes a long position in a futures contract now (time 0) and holds the position until maturity (time T ). The sum of all daily settlements will be __________. A. F 0 – FT B. F 0 […]
Finance Chapter 5 3 Which of the following tends to be most predictable for purposes of analytical procedures applied as substantive procedures
Chapter 05 – Evidence and Documentation 75. Which of the following tends to be most predictable for purposes of analytical procedures applied as substantive procedures? A. Relationships involving balance sheet accounts. B. Transactions subject to management discretion. C. Relationships involving […]
Investments & Securities Chapter 17 1 which one of the following exploits differences between actual future prices and their theoretically correct parity values
1. Today’s futures markets are dominated by trading in _______ contracts. A. metals B. agriculture C. financial D. commodity AACSB: Analytic Blooms: Remember Difficulty: 2 Medium Learning Objective: 17-01 Calculate the profit on futures positions as a function of current […]
Finance Chapter 5 2 Which transaction assertion for transactions within the purchasing process are you most concerned with
Chapter 05 – Evidence and Documentation 50. Audit documentation A. Must be in electronic form. B. Must be in paper form only. C. Is not required, but is strongly recommended. D. May be in paper, electronic, or some other form. […]
Investments & Securities Chapter 16 2 you are considering purchasing a put option on a stock with a current price of $33. the exercise price is $35
AACSB: Analytic Blooms: Remember Difficulty: 2 Medium Learning Objective: 16-01 Identify the features of an option that affect its market value. Topic: Option Valuation: Introduction 46. A one-dollar increase in a stock’s price would result in __________ in the call […]
Finance Chapter 5 1 Audit evidence includes only written information used by the auditor in arriving at an opinion about the fairness of financial statements
Chapter 05 – Evidence and Documentation 1. Audit evidence includes only written information used by the auditor in arriving at an opinion about the fairness of financial statements. FALSE AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Decision Making Blooms: […]
Investments & Securities Chapter 16 3 a put option has a strike price of $35 and a stock price of $38. if the call option is trading at $1.25, what is the time value embedded in the option
67. You would like to hold a protective put position on the stock of Avalon Corporation to lock in a guaranteed minimum value of $50 at year-end. Avalon currently sells for $50. Over the next year, the stock price will […]
Finance Chapter 4 2 An auditor discovers a likely fraud during an audit but concludes that the overall effect of the fraud is not sufficiently material to affect the audit opinion
Chapter 04 – Risk Assessment 34. All of the following represent an increased opportunity for management to commit fraud except: A. Significant related party transactions. B. The auditor’s relationship with management is strained. C. Management is dominated by a single […]
Investments & Securities Chapter 16 1 if the black formula is solved to find the standard deviation consistent with the current market call premium, that standard deviation would be called
1. If the Black-Scholes formula is solved to find the standard deviation consistent with the current market call premium, that standard deviation would be called the _______. A. variability B. volatility C. implied volatility D. deviance AACSB: Analytic Blooms: Remember […]
Finance Chapter 4 1 Audit risk is the auditor’s exposure to loss or injury of his or her reputation from events arising in connection with financial statements audited
Chapter 04 – Risk Assessment 1. Audit risk is the auditor’s exposure to loss or injury of his or her reputation from events arising in connection with financial statements audited. FALSE AACSB: Communication AICPA BB: Legal AICPA FN: Risk Analysis […]
Investments & Securities Chapter 15 3 which strategy benefits from upside price movement and has some protection should the price of the security fall
AACSB: Reflective Thinking Blooms: Understand Difficulty: 2 Medium Learning Objective: 15-02 Formulate option strategies to modify portfolio risk-return attributes. Topic: Option Strategies 68. You sell one IBM July 90 call contract for a premium of $4 and two puts for […]
Finance Chapter 3 1 The Code of Professional Conduct does not allow an auditor to disclose confidential client information without the client’s consent.
Chapter 03 – Audit Planning, Types of Audit Tests, and Materiality 1. The first phase of audit planning is risk assessment. FALSE AACSB: Analytic AICPA BB: Industry AICPA FN: Risk Analysis Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-01 Understand […]
Investments & Securities Chapter 15 2 the common stock of the avalon corporation has been trading in a narrow range around $40 per share for months, and you believe it is going to stay
AACSB: Analytic Blooms: Remember Difficulty: 2 Medium Learning Objective: 15-01 Calculate the profit to various option positions as a function of ultimate security prices. Topic: Exotic Options 48. Which one of the following is the ticker symbol for the CBOE […]
Finance Chapter 3 2 Which of the following would an auditor most likely use in determining the auditor’s planning materiality
Chapter 03 – Audit Planning, Types of Audit Tests, and Materiality 44. Which of the following is not an audit procedure that is commonly used in performing tests of controls? A. Inquiring. B. Observing. C. Confirming. D. Inspecting. AACSB: Analytic […]
Investments & Securities Chapter 15 1 you purchase one ibm july 120 call contract for a premium of $5. you hold the option until the expiration date, when ibm stock sells for $123 per share
1. You purchase one IBM July 120 call contract for a premium of $5. You hold the option until the expiration date, when IBM stock sells for $123 per share. You will realize a ______ on the investment. A. $200 […]
Finance Chapter 2 2 The fourth PCAOB standard of reporting requires an auditor to render a report whenever an auditor’s name is associated with financial statements
Chapter 02 – The Financial Statement Auditing Environment 41. The objective of the second PCAOB Standard of Reporting is to provide assurance that A. There are no variations in the format and presentation of financial statements. B. Substantially different transactions […]
Investments & Securities Chapter 14 3 the financial statements of burnaby mountain trading company are shown below. note: the common shares are trading in the stock market for $27 each
C. 1.69 D. 2.83 Leverage ratio = Assets/Equity = $4,300,000/($500,000 + 2,800,000) = 1.3 AACSB: Analytic Blooms: Apply Difficulty: 2 Medium Learning Objective: 14-03 Use ratio decomposition analysis to show how profitability depends on efficient use of assets; profit margin; […]
Finance Chapter 2 1 What organization is responsible for setting auditing standards for audits of publicly-traded companies in the U.S
Chapter 02 – The Financial Statement Auditing Environment 1. A series of business and related auditing failures led to the passage of the Sarbanes-Oxley Act (2002). TRUE AACSB: Communication AICPA BB: Legal AICPA FN: Measurement Blooms: Remember Difficulty: 1 Easy […]
Investments & Securities Chapter 14 4 what ratio will definitely increase when a firm increases its annual sales with no corresponding increase in assets
55. A high price-to-book ratio may indicate which one of the following? A. The firm expanded its plant and equipment in the past few years. B. The firm is doing a poorer job controlling its inventory expense than other related […]
Finance Chapter 1 2 On a high level, the accounting processes of a business consist of internal controls, individual transactions, and account balances
Chapter 01 – An Introduction to Assurance and Financial Statement Auditing 30. Preliminary engagement activities include A. Evaluating internal controls. B. Assessing audit risk at the account balance level. C. Setting materiality. D. Performing background checks on top management. AACSB: […]
Investments & Securities Chapter 14 1 which of the following is one of the three key financial statements available to investors in publicly traded firms?
1. Which of the following assets is most liquid? A. Cash equivalents B. Receivables C. Inventories D. Plant and equipment AACSB: Analytic Blooms: Remember Difficulty: 1 Easy Learning Objective: 14-01 Interpret a firm’s income statement; balance sheet; and statement of […]
Finance Chapter 1 1 Which of the following statements best describes a relationship between sample size and other elements of auditing
Chapter 01 – An Introduction to Assurance and Financial Statement Auditing 1. Independence standards are required for audits of public companies, but not for audits of private companies. FALSE AACSB: Communication AICPA BB: Legal AICPA FN: Decision Making Blooms: Remember […]
Investments & Securities Chapter 14 2 the financial statements of flathead lake manufacturing company are shown below: note: the common shares are trading in the stock market for
AACSB: Analytic Blooms: Apply Difficulty: 2 Medium Learning Objective: 14-03 Use ratio decomposition analysis to show how profitability depends on efficient use of assets; profit margin; and leverage. Topic: Ratio Analysis © 2013 by McGraw-Hill Education. This is proprietary material […]
Human Resources Chapter 18 1 Which One The Following Factors Has The Least Influence The Percentage Pay
CHAPTER 18 1. A merit budget (a) includes all personnel pay costs in gross figures (b) is theoretically the money allocated for rewarding value performance (c) is money allocated to be used to pay the top performers of the organization […]
Investments & Securities Chapter 13 3 a stock is priced at $45 per share. the stock has earnings per share of $3 and a market capitalization rate of 14%. what is the stock’s
65. A stock is priced at $45 per share. The stock has earnings per share of $3 and a market capitalization rate of 14%. What is the stock’s PVGO? A. $23.57 B. $15 C. $19.78 D. $21.34 AACSB: Analytic Blooms: […]
Human Resources Chapter 17 1 The Earned Time Personal Time Non fault Time off Plan Includes All But Which
CHAPTER 17 1. The rapid expansion of the benefits program over the past three decades has been attributed to all of the following except (a) the imposition of wage ceilings during WW II (b) increased employee interest in receiving a […]
Economics Chapter 43 1 If a new casino comes to a city that already has one, which economic impact has little to no “local substitution” offsets to consider
Chapter 43 – The Economic Impact of Casino Gambling Chapter 43 The Economic Impact of Casino Gambling Multiple Choice 1. The perception that casinos have a dramatic impact on a local economy is A) without any foundation whatsoever. B) reasonable, […]
Investments & Securities Chapter 13 2 a company with an expected earnings growth rate which is greater than that of the typical company in the same industry most likely has
38. Ace Ventura, Inc., has expected earnings of $5 per share for next year. The firm’s ROE is 15%, and its earnings retention ratio is 40%. If the firm’s market capitalization rate is 10%, what is the present value of […]
Human Resources Chapter 16 1 Coli B Rabbi Trust C Sep D Serp 11 Which One The
CHAPTER 16 1. The Omnibus Budget Reconciliation Act of 1993 placed a ________ cap on deductible compensation of the top five executive officers of an organization. (a) $500,000 (b) $750,000 (c) $1,000,000 (d) $1,500,000 2. Nonqualified stock plans include all […]
Economics Chapter 42 1 If you got a new job and were moved to Dale Indiana (population 1,500) you would expect to find two grocery stores, the market form is
Chapter 42 – Walmart: Always Low Prices (and Low Wages) – Always Chapter 42 Walmart: Always Low Prices (and Low Wages) – Always Multiple Choice 1. Walmart accounts for ____ of US GDP. A) less than 1% B) 2% C) […]
Investments & Securities Chapter 13 1 suppose that in 2012 the expected dividends of the stocks in a broad market index equaled $240 million when the discount rate was 8% and the expected
1. The accounting measure of a firm’s equity value generated by applying accounting principles to asset and liability acquisitions is called ________. A. book value B. market value C. liquidation value D. Tobin’s q AACSB: Analytic Blooms: Remember Difficulty: 1 […]
Human Resources Chapter 15 1 All But Which One The Following Are Major Reasons For Employee
CHAPTER 15 1. All but which one of the following are major reasons for an employee to defer income? (a) save for the future (b) permit savings to accumulate interest tax free (c) currently low tax rates (d) inability to […]
Economics Chapter 41 1 If there are powerful unions in a labor market, the use of the supply and demand model to analyze labor markets
Chapter 41 – Unions Chapter 41 Unions Multiple Choice 1. The percentage of workers represented by unions reached its peak in the A) 1940’s. B) 1970’s. C) 1980’s. D) 1990’s. Answer: B 2. The peak of union representation in the […]
Investments & Securities Chapter 12 2 which of the following is the rate at which the general level of prices for goods and services is rising increases in the money supply will cause demand for investment
AACSB: Analytic Blooms: Remember Difficulty: 1 Easy Learning Objective: 12-01 Predict the effect of exchange rates as well as monetary; fiscal; and supply-side policies on business conditions. Topic: The Domestic Macroeconomy 49. Which of the following is the rate at […]
Human Resources Chapter 14 1 The National Association Suggestion Systems Claims That Dollar Spent Rewarding Suggestions Will
CHAPTER 14 1. In addition to pay received by employees on first shift, employees working second and third shifts normally receive (a) larger merit increases (b) shift differential pay (c) incentive bonuses periodically (d) the prevailing union scale for such […]
Investments & Securities Chapter 12 1 which of the following describes the percentage of the total labor force that has yet to find work if the economy is going into a recession
1. A top-down analysis of a firm’s prospects starts with an analysis of the ____. A. firm’s position in its industry B. U.S. economy or even the global economy C. industry D. specific firm under consideration AACSB: Analytic Blooms: Remember […]