Multiple Choice Questions
1. Which of the following is not a characteristic of a money market instrument?
A) liquidity
B) marketability
C) long maturity
D) liquidity premium
E) C and D
Answer: E Difficulty: Easy
Rationale: Money market instruments are short-term instruments with high liquidity
and marketability; they do not have long maturities nor pay liquidity premiums.
2. Which one of the following is not a money market instrument?
A) a Treasury bill
B) a negotiable certificate of deposit
C) commercial paper
D) a Treasury bond
E) a Eurodollar account
Answer: D Difficulty: Easy
Rationale: Money market instruments are instruments with maturities of one year or less, which applies to all of the above except Treasury bonds. See Table 2.1, page 33.
3. T-bills are financial instruments initially sold by ________ to raise funds.
A) commercial banks
B) the U. S. government
C) state and local governments
D) agencies of the federal government
E) B and D
Answer: B Difficulty: Easy
Rationale: Only the U. S. government sells T-bills in the primary market.
4. The bid price of a T-bill in the secondary market is
A) the price at which the dealer in T-bills is willing to sell the bill.
B) the price at which the dealer in T-bills is willing to buy the bill.
C) greater than the asked price of the T-bill.
D) the price at which the investor can buy the T-bill.
E) never quoted in the financial press.
Answer: B Difficulty: Easy
Rationale: T-bills are sold in the secondary market via dealers; the bid price quoted in the financial press is the price at which the dealer is willing to buy the bill.
5. Commercial paper is a short-term security issued by ________ to raise funds.
A) the Federal Reserve Bank
B) commercial banks
C) large, well-known companies
D) the New York Stock Exchange
E) state and local governments
Answer: C Difficulty: Easy
Rationale: Commercial paper is short-term unsecured financing issued directly by large, presumably safe corporations.
6. Which one of the following terms best describes Eurodollars:
A) dollar-denominated deposits in European banks.
B) dollar-denominated deposits at branches of foreign banks in the U. S.
C) dollar-denominated deposits at foreign banks and branches of American banks
outside the U. S.
D) dollar-denominated deposits at American banks in the U. S.
E) dollars that have been exchanged for European currency.
Answer: C Difficulty: Moderate
Rationale: Although originally Eurodollars were used to describe dollar-denominated deposits in European banks, today the term has been extended to apply to any
dollar-denominated deposit outside the U. S.
7. Deposits of commercial banks at the Federal Reserve Bank are called __________.
A) bankers' acceptances
B) repurchase agreements
C) time deposits
D) federal funds
E) reserve requirements
Answer: D Difficulty: Easy
Rationale: The federal funds are required for the bank to meet reserve requirements, which is a way of influencing the money supply. No substitutes for fed funds are
permitted.
8. The interest rate charged by banks with excess reserves at a Federal Reserve Bank to
banks needing overnight loans to meet reserve requirements is called the_________.
A) prime rate
B) discount rate
C) federal funds rate
D) call money rate
E) money market rate
Answer: C Difficulty: Easy
9. Which of the following statements is (are) true regarding municipal bonds?
I) A municipal bond is a debt obligation issued by state or local governments.
II) A municipal bond is a debt obligation issued by the federal government.
III)The interest income from a municipal bond is exempt from federal income taxation.
IV)The interest income from a municipal bond is exempt from state and local taxation in the issuing state.
A) I and II only
B) I and III only
C) I, II, and III only
D) I, III, and IV only
E) I and IV only
Answer: D Difficulty: Moderate
Rationale: State and local governments and agencies thereof issue municipal bonds on which the interest income is free from all federal taxes and is exempt from state and local taxation in the issuing state.
10. Which of the following statements is true regarding a corporate bond?
A) A corporate callable bond gives the holder the right to exchange it for a specified
number of the company's common shares.
B) A corporate debenture is a secured bond.
C) A corporate indenture is a secured bond.
D) A corporate convertible bond gives the holder the right to exchange the bond for a
specified number of the company's common shares.
E) Holders of corporate bonds have voting rights in the company.
Answer: D Difficulty: Easy
Rationale: Statement D is the only true statement; all other statements describe
something other than the term specified.
11. In the event of the firm's bankruptcy
A) the most shareholders can lose is their original investment in the firm's stock.
B) common shareholders are the first in line to receive their claims on the firm's assets.
C) bondholders have claim to what is left from the liquidation of the firm's assets after
paying the shareholders.
D) the claims of preferred shareholders are honored before those of the common
shareholders.
E) A and D.
Answer: E Difficulty: Moderate
Rationale: Shareholders have limited liability and have residual claims on assets.
Bondholders have a priority claim on assets, and preferred shareholders have priority over common shareholders.
12. Which of the following is true regarding a firm's securities?
A) Common dividends are paid before preferred dividends.
B) Preferred stockholders have voting rights.
C) Preferred dividends are usually cumulative.
D) Preferred dividends are contractual obligations.
E) Common dividends usually can be paid if preferred dividends have been skipped.
Answer: C Difficulty: Easy
Rationale: The only advantages of preferred dividends over common dividends are that preferred dividends must be paid first and any skipped preferred dividends must be paid before common dividends may be paid.
13. Which of the following is true of the Dow Jones Industrial Average?
A) It is a value-weighted average of 30 large industrial stocks.
B) It is a price-weighted average of 30 large industrial stocks.
C) The divisor must be adjusted for stock splits.
D) A and C.
E) B and C.
Answer: E Difficulty: Easy
Rationale: The Dow Jones Industrial Average is a price-weighted index of 30 large industrial firms and the divisor must be adjusted when any of the stocks on the index split.
14. Which of the following indices is (are) market-value weighted?
I)The New York Stock Exchange Composite Index
II)The Standard and Poor's 500 Stock Index
III)The Dow Jones Industrial Average
A) I only
B) I and II only
C) I and III only
D) I, II, and III
E) II and III only
Answer: B Difficulty: Moderate
Rationale: The Dow Jones Industrial Average is a price-weighted index.
15. The Dow Jones Industrial Average (DJIA) is computed by:
A) adding the prices of 30 large "blue-chip" stocks and dividing by 30.
B) calculating the total market value of the 30 firms in the index and dividing by 30.
C) adding the prices of the 30 stocks in the index and dividing by a divisor.
D) adding the prices of the 500 stocks in the index and dividing by a divisor.
E) adding the prices of the 30 stocks in the index and dividing by the value of these
stocks as of some base date period.
Answer: C Difficulty: Easy
Rationale: When the DJIA became a 30-stock index, response A was true; however, as stocks on the index have split and been replaced, the divisor has been adjusted. In
January 2003 the divisor was 0.146.
Use the following to answer questions 16-18:
Consider the following three stocks:
Stock Price N um ber of shares outstanding
Stock A$40 200
Stock B$70 500
Stock C$10 600
16. The price-weighted index constructed with the three stocks is
A) 30
B) 40
C) 50
D) 60
E) 70
Answer: B Difficulty: Easy
Rationale: ($40 + $70 + $10)/3 = $40.
17. The value-weighted index constructed with the three stocks using a divisor of 100 is
A) 1.2
B) 1200
C) 490
D) 4900
E) 49
Answer: C Difficulty: Moderate
Rationale: The sum of the value of the three stocks divided by 100 is 490: [($40 x 200) + ($70 x 500) + ($10 x 600)] /100 = 490.
18. Assume at these prices the value-weighted index constructed with the three stocks is
490. What would the index be if stock B is split 2 for 1 and stock C 4 for 1?
A) 265
B) 430
C) 355
D) 490
E) 1000
Answer: D Difficulty: Moderate
Rationale: Value-weighted indexes are not affected by stock splits.
19. The price quotations of Treasury bonds in the Wall Street Journal show an ask price of
104:08 and a bid price of 104:04. As a buyer of the bond what is the dollar price you expect to pay?
A) $10,480.00
B) $10,425.00
C) $10,440.00
D) $10,412.50
E) $10,404.00
Answer: B Difficulty: Moderate
Rationale: You pay the asking price of the dealer, 104 8/32, or 104.25% of $10,000, or $10,425.00.
20. An investor purchases one municipal and one corporate bond that pay rates of return of
8% and 10%, respectively. If the investor is in the 20% marginal tax bracket, his or her after tax rates of return on the municipal and corporate bonds would be ________ and ______, respectively.
A) 8% and 10%
B) 8% and 8%
C) 6.4% and 8%
D) 6.4% and 10%
E) 10% and 10%
Answer: B Difficulty: Moderate
Rationale: r c = 0.10(1 - 0.20) = 0.08, or 8%; r m = 0.08(1 - 0) = 8%.
21. If a Treasury note has a bid price of $975, the quoted bid price in the Wall Street Journal
would be
A) 97:50.
B) 97:16.
C) 97:80.
D) 94:24.
E) 97:75.
Answer: B Difficulty: Easy
Rationale: Treasuries are quoted as a percent of $1,000 and in 1/32s.
22. In calculating the Standard and Poor's stock price indices, the adjustment for stock split
occurs:
A) by adjusting the divisor.
B) automatically.
C) by adjusting the numerator.
D) quarterly, on the last trading day of each quarter.
E) none of the above.
Answer: B Difficulty: Easy
Rationale: The calculation of the value-weighted S&P indices includes both price and number of shares of each of the stocks in the index. Thus, the effects of stock splits are automatically incorporated into the calculation.
23. Which of the following statements regarding the Dow Jones Industrial Average (DJIA)
is false?
A) The DJIA is not very representative of the market as a whole.
B) The DJIA consists of 30 blue chip stocks.
C) The DJIA is affected equally by changes in low and high priced stocks.
D) The DJIA divisor needs to be adjusted for stock splits.
E) The value of the DJIA is much higher than individual stock prices.
Answer: C Difficulty: Easy
Rationale: The high priced stocks have much more impact on the DJIA than do the lower priced stocks.
24. The index that includes the largest number of actively traded stock is:
A) the NASDAQ Composite Index.
B) the NYSE Composite Index.
C) the Wilshire 5000 Index.
D) the Value Line Composite Index.
E) the Russell Index.
Answer: C Difficulty: Easy
Rationale: The Wilshire 5000 is the largest readily available stock index, consisting of the stocks traded on the organized exchanges and the OTC stocks.
25. A 5.5% 20-year municipal bond is currently priced to yield 7.2%. For a taxpayer in the
33% marginal tax bracket, this bond would offer an equivalent taxable yield of:
A) 8.20%.
B) 10.75%.
C) 11.40%.
D) 4.82%.
E) none of the above.
Answer: B Difficulty: Moderate
Rationale: 0.072 = r m (1-t); 0.072 = r m / (0.67); r m = 0.1075 = 10.75%.
26. If the market prices of each of the 30 stocks in the Dow Jones Industrial Average (DJIA)
all change by the same percentage amount during a given day, which stock will have the greatest impact on the DJIA?
A) The stock trading at the highest dollar price per share.
B) The stock with total equity has the higher market value.
C) The stock having the greatest amount of equity in its capital structure.
D) The stock having the lowest volatility.
E) All will have an equal impact.
Answer: A Difficulty: Moderate
Rationale: Higher priced stocks affect the DJIA more than lower priced stocks; other choices are not relevant.
27. The Value Line Index is an equally weighted geometric average of the return of about
1,700 firms. What is the value of an index based on the geometric average returns of three stocks, where the returns on the three stocks during a given period were 20%, -10%, and 5%?
A) 4.3%
B) 5.0%
C) 11.7%
D) 13.4%
E) 12.2%
Answer: A Difficulty: Moderate
Rationale: [(1.2)(0.9)(1.05)]1/3 - 1 = 4.28%.
28. The stocks on the Dow Jones Industrial Average
A) have remained unchanged since the creation of the index.
B) include most of the stocks traded on the NYSE.
C) are changed occasionally as circumstances dictate.
D) consist of stocks on which the investor cannot lose money.
E) B and C.
Answer: C Difficulty: Easy
Rationale: The stocks on the DJIA are only a small sample of the entire market, have been changed occasionally since the creation of the index, and one can lose money on any stock. See text box on page 50 for a list of DJIA stock changes.
29. Federally sponsored agency debt
A) is legally insured by the U. S. Treasury.
B) would probably be backed by the U. S. Treasury in the event of a near-default.
C) has a small positive yield spread relative to U. S. Treasuries.
D) B and C.
E) A and C.
Answer: D Difficulty: Easy
Rationale: Federally sponsored agencies, such as the FHLB, are not government owned.
These agencies' debt is not insured by the U.S. Treasury, but probably would be backed by the Treasury in the event of an agency near-default. As a result, the issues are very safe and carry a yield only slightly higher than that of U. S. Treasuries.
30. Brokers' calls
A) are funds used by individuals who wish to buy stocks on margin.
B) are funds borrowed by the broker from the bank, with the agreement to repay the
bank immediately if requested to do so.
C) carry a rate that is usually about one percentage point lower than the rate on U.S.
T-bills.
D) A and B.
E) A and C.
Answer: D Difficulty: Easy
Rationale: Brokers' calls are funds borrowed from banks by brokers and loaned to
investors in margin accounts.
31. A form of short-term borrowing by dealers in government securities is
A) reserve requirements.
B) repurchase agreements.
C) banker's acceptances.
D) commercial paper.
E) brokers' calls.
Answer: B Difficulty: Easy
Rationale: Repurchase agreements are a form of short-term borrowing where a dealer sells government securities to an investor with an agreement to buy back those same securities at a slightly higher price.
32. Which of the following securities is a money market instrument?
A) Treasury note
B) Treasury bond.
C) municipal bond.
D) commercial paper.
E) mortgage security.
Answer: D Difficulty: Easy
Rationale: Only commercial paper is a money market security. The others are capital market instruments.
33. The call provision in Treasury securities
I)is used with Treasury Notes.
II)is used with Treasury Bonds.
III)gives the Treasury the right to repurchase the security at par.
IV)gives the Treasury the right to repurchase the security at a premium over par.
A) II and III are correct.
B) II and IV are correct.
C) I, II and III are correct.
D) I, II and IV are correct.
E) Only II is correct.
Answer: A Difficulty: Moderate
Rationale: Call provisions, giving the Treasury the right to repurchase the security at par, are included in some Treasury Bonds. No callable bonds have been issued since 1984.
34. The yield to maturity reported in the financial pages for Treasury securities
A) is calculated by compounding the semiannual yield.
B) is calculated by doubling the semiannual yield.
C) is also called the bond equivalent yield.
D) is calculated as the yield-to-call for premium bonds.
E) Both B and C are true.
Answer: E Difficulty: Easy
Rationale: The yield to maturity shown in the financial pages is an APR calculated by doubling the semi-annual yield.
35. Which of the following is not a mortgage-related government or government sponsored
agency?
A) The Federal Home Loan Bank
B) The Federal National Mortgage Association
C) The U.S. Treasury
D) Freddie Mac
E) Ginnie Mae
Answer: C Difficulty: Easy
Rationale: Only the U.S. Treasury issues securities that are not mortgage-backed. 36. The Tax Reform Act of 1986 limited the issue of mortgage revenue and tax-exempt
bonds
A) to $150 billion per state.
B) to the larger of $50 per capita or $150 million per state.
C) to the amount outstanding in 1980.
D) to maturities of 20 years or less.
E) None of the above statements are correct.
Answer: B Difficulty: Moderate
Rationale: The Tax Reform Act of 1986 limited the issue of mortgage revenue and tax exempt bonds for each state to $50 per capita or $150 million in order to limit the drain of potential tax revenue from the Federal Government.
37. In order for you to be indifferent between the after tax returns on a corporate bond
paying 8.5% and a tax-exempt municipal bond paying 6.12%, what would your tax
bracket need to be?
A) 33%
B) 72%
C) 15%
D) 28%
E) Cannot tell from the information given
Answer: D Difficulty: Moderate
Rationale: .0612 = .085(1-t); (1-t) = 0.72; t = .28
38. Which of the following are true about Treasury Bills?
A) T-Bills are capital market instruments.
B) T-Bills yields are quoted in the financial pages as effective annual rates of return.
C At the T-Bill's maturity, the holder receives the face value of the Bill.
C) Both A and C are correct.
D) All of the above.
Answer: D Difficulty: Moderate
39. What does the term, “negotiable” mean with regard to negotiable certificates of deposit?
A) The CD can be sold to another investor if the owner needs to cash it in before its
maturity date.
B) The rate of interest on the CD is subject to negotiation.
C) The CD is automatically reinvested at its maturity date.
D) The CD has staggered maturity dates built in.
E) The interest rate paid on the CD will vary with a designated market rate.
Answer: A Difficulty: Easy
40. Freddie Mac and Ginnie Mae were organized to provide
A) a primary market for mortgage transactions.
B) liquidity for the mortgage market.
C) a primary market for farm loan transactions.
D) liquidity for the farm loan market.
E) a source of funds for government agencies.
Answer: B Difficulty: Easy
41. The type of municipal bond that is used to finance commercial enterprises such as the
construction of a new building for a corporation is called
A) a corporate courtesy bond.
B) a revenue bond.
C) a general obligation bond.
D) a tax anticipation note.
E) an industrial development bond.
Answer: E Difficulty: Easy
42. Suppose an investor is considering a corporate bond with a 7.17% before-tax yield and a
municipal bond with a 5.93% before-tax yield. At what marginal tax rate would the investor be indifferent between investing in the corporate and investing in the muni?
A) 15.4%
B) 23.7%
C) 39.5%
D) 17.3%
E) 12.4%
Answer: D Difficulty: Moderate
Rationale: t m = 1-(5.93%/7.17%) = 17.29%
43. An individual can invest in student loan securities by buying
A) Sallie Maes
B) Ginnie Maes
C) Fanny Maes
D) Freddie Macs
E) Stacey Joes
Answer: A Difficulty: Easy
44. Which of the following are characteristics of preferred stock?
I)It pays its holder a fixed amount of income each year, at the discretion of its
managers.
II)It gives its holder voting power in the firm.
III)Its dividends are usually cumulative.
IV)Failure to pay dividends may result in bankruptcy proceedings.
A) I, III, and IV
B) I, II, and III
C) I and III
D) I, II, and IV
E) I, II, III, and IV
Answer: C Difficulty: Moderate
45. Bond market indexes can be difficult to construct because
A) they cannot be based on firms' market values.
B) bonds tend to trade infrequently, making price information difficult to obtain.
C) there are so many different kinds of bonds.
D) prices cannot be obtained for companies that operate in emerging markets.
E) corporations are not required to disclose the details of their bond issues.
Answer: B Difficulty: Moderate
46. With regard to a futures contract, the long position is held by
A) the trader who bought the contract at the largest discount.
B) the trader who has to travel the farthest distance to deliver the commodity.
C) the trader who plans to hold the contract open for the lengthiest time period.
D) the trader who commits to purchasing the commodity on the delivery date.
E) the trader who commits to delivering the commodity on the delivery date.
Answer: D Difficulty: Easy
47. In order for you to be indifferent between the after tax returns on a corporate bond
paying 9% and a tax-exempt municipal bond paying 7%, what would your tax bracket need to be?
A) 17.6%
B) 27%
C) 22.2%
D) 19.8%
E) Cannot tell from the information given
Answer: C Difficulty: Moderate
Rationale: .07 = .09(1-t); (1-t) = 0.777; t = .222
48. In order for you to be indifferent between the after tax returns on a corporate bond
paying 7% and a tax-exempt municipal bond paying 5.5%, what would your tax bracket need to be?
A) 22.6%
B) 21.4%
C) 26.2%
D) 19.8%
E) Cannot tell from the information given
Answer: B Difficulty: Moderate
Rationale: .055 = .07(1-t); (1-t) = 0.786; t = .214
49. An investor purchases one municipal and one corporate bond that pay rates of return of
6% and 8%, respectively. If the investor is in the 25% marginal tax bracket, his or her after tax rates of return on the municipal and corporate bonds would be ________ and ______, respectively.
A) 6% and 8%
B) 4.5% and 6%
C) 4.5% and 8%
D) 6% and 6%
E) None of the above
Answer: D Difficulty: Moderate
Rationale: r c = 0.08(1 - 0.25) = 0.06, or 6%; r m = 0.06(1 - 0) = 6%.
50. An investor purchases one municipal and one corporate bond that pay rates of return of
7.2% and 9.1%, respectively. If the investor is in the 15% marginal tax bracket, his or
her after tax rates of return on the municipal and corporate bonds would be ________ and ______, respectively.
A) 7.2% and 9.1%
B) 7.2% and 7.735%
C) 6.12% and 7.735%
D) 8.471% and 9.1%
E) None of the above
Answer: B Difficulty: Moderate
Rationale: r c = 0.091(1 - 0.15) = 0.07735, or 7.735%; r m = 0.072(1 - 0) = 7.2%.
51. For a taxpayer in the 25% marginal tax bracket, a 20-year municipal bond currently
yielding 5.5% would offer an equivalent taxable yield of:
A) 7.33%.
B) 10.75%.
C) 5.5%.
D) 4.125%.
E) none of the above.
Answer: A Difficulty: Moderate
Rationale: 0.055= r m(1-t); 0.0733 = r m / 0.75).
52. For a taxpayer in the 15% marginal tax bracket, a 15-year municipal bond currently
yielding 6.2% would offer an equivalent taxable yield of:
A) 6.2%.
B) 5.27%.
C) 8.32%.
D) 7.29%.
E) none of the above.
Answer: D Difficulty: Moderate
Rationale: 0.062= r m(1-t); 0.062 = r m / (0.85); r m = 0.0729 = 7.29%.
53. With regard to a futures contract, the short position is held by
A) the trader who bought the contract at the largest discount.
B) the trader who has to travel the farthest distance to deliver the commodity.
C) the trader who plans to hold the contract open for the lengthiest time period.
D) the trader who commits to purchasing the commodity on the delivery date.
E) the trader who commits to delivering the commodity on the delivery date.
Answer: E Difficulty: Easy
54. A call option allows the buyer to
A) sell the underlying asset at the exercise price on or before the expiration date.
B) buy the underlying asset at the exercise price on or before the expiration date.
C) sell the option in the open market prior to expiration.
D) A and C.
E) B and C.
Answer: E Difficulty: Easy
Rationale: A call option may be exercised (allowing the holder to buy the underlying asset) on or before expiration; the option contract also may be sold prior to expiration.
55. A put option allows the holder to
A) buy the underlying asset at the striking price on or before the expiration date.
B) sell the underlying asset at the striking price on or before the expiration date.
C) sell the option in the open market prior to expiration.
D) B and C.
E) A and C.
Answer: D Difficulty: Easy
Rationale: A put option allows the buyer to sell the underlying asset at the striking price on or before the expiration date; the option contract also may be sold prior to expiration.
56. The ____ index represents the performance of the German stock market.
A) DAX
B) FTSE
C) Nikkei
D) Hang Seng
E) None of the above
Answer: A Difficulty: Easy
57. The ____ index represents the performance of the Japanese stock market.
A) DAX
B) FTSE
C) Nikkei
D) Hang Seng
E) None of the above
Answer: C Difficulty: Easy
58. The ____ index represents the performance of the U.K. stock market.
A) DAX
B) FTSE
C) Nikkei
D) Hang Seng
E) None of the above
Answer: B Difficulty: Easy
59. The ____ index represents the performance of the Hong Kong stock market.
A) DAX
B) FTSE
C) Nikkei
D) Hang Seng
E) None of the above
Answer: D Difficulty: Easy
60. The ultimate small stock index in the U.S. is the
A) Wilshire 5000.
B) DJIA.
C) S&P 500.
D) Russell 2000.
E) None of the above.
Answer: A Difficulty: Easy
61. The ____ is an example of a U.S. index of large firms.
A) Wilshire 5000
B) DJIA
C) DAX
D) Russell 2000
E) All of the above
Answer: B Difficulty: Easy
62. The ____ is an example of a U.S. index of small firms.
A) S&P 500
B) DJIA
C) DAX
D) Russell 2000
E) All of the above
Answer: D Difficulty: Easy
Short Answer Questions
Use the following to answer questions 63-64:
P Q P Q P Q
Stock A
Stock B
Stock C
Chapter 10 Return and Risk: The Capital-Assets-Pricing Model Multiple Choice Questions 1. When a security is added to a portfolio the appropriate return and risk contributions are A) the expected return of the asset and its standard deviation. B) the expected return and the variance. C) the expected return and the beta. D) the historical return and the beta. E) these both can not be measured. Answer: C Difficulty: Medium Page: 255 2. When stocks with the same expected return are combined into a portfolio A) the expected return of the portfolio is less than the weighted average expected return of the stocks. B) the expected return of the portfolio is greater than the weighted average expected return of the stocks. C) the expected return of the portfolio is equal to the weighted average expected return of the stocks. D) there is no relationship between the expected return of the portfolio and the expected return of the stocks. E) None of the above. Answer: C Difficulty: Easy Page: 261 3. Covariance measures the interrelationship between two securities in terms of A) both expected return and direction of return movement. B) both size and direction of return movement. C) the standard deviation of returns. D) both expected return and size of return movements. E) the correlations of returns. Answer: B Difficulty: Medium Page: 258-259 Use the following to answer questions 4-5: GenLabs has been a hot stock the last few years, but is risky. The expected returns for GenLabs are highly dependent on the state of the economy as follows: State of Economy Probability GenLabs Returns Depression .05 -50% Recession .10 -15 Mild Slowdown .20 5 Normal .30 15% Broad Expansion .20 25 Strong Expansion .15 40
项目一财务管理总体认知 一、单项选择题 1．下列各项企业财务管理目标中，能够同时考虑资金的时间价值和投资风险因素的是( D )。 A．产值最大化 B．利润最大化 C．每股收益最大化 D．企业价值最大化 2．企业筹资活动的最终结果是( D )。 A.银行借款 B.发行债券 C.发行股票 D.资金流入 7．相对于每股收益最大化目标而言，企业价值最大化目标的不足之处是( D )。 A．没有考虑资金的时间价值 B．没有考虑投资的风险价值 C．不能反映企业潜在的获利能力 D．某些情况下确定比较困难 9．下列法律法规同时影响企业筹资、投资和收益分配的是( A )。 A．公司法 B．金融法 C．税法 D．企业财务通则 10．在市场经济条件下，财务管理的核心是（ B ）。 A.财务预测 B.财务决策 C.财务控制 D.财务分析 二、多项选择题 2．企业财务管理的基本内容包括( ACD )。 A. 筹资决策 B．技术决策 C．投资决策 D．盈利分配决策 3．财务管理的环境包括( ABCD )。 A．技术环境 B．经济环境 C．金融环境 D．法律环境 4．以下项目中属于“利润最大化”目标存在的问题有( ABCD )。 A．没有考虑利润实现时间和资金时间价值 B．没有考虑风险问题 C．没有反映创造的利润与投入的资本之间的关系 D．可能导致企业短期财务决策倾向，影响企业长远发展
5．以股东财富最大化作为财务管理目标存在的问题有( ABC )。 A．通常只适用于上市公司 B．股价不能完全准确反映企业财务管理状况 C．对其他相关者的利益重视不够 D．没有考虑风险因素 6．下列财务管理的目标当中，考虑了风险因素的有( BCD )。 A．利润最大化 B．股东财富最大化 C．企业价值最大化 D．相关者利益最大化 7．在分配活动中，企业财务管理的核心任务是( BC )。 A. 确定筹资结构 B. 确定分配规模 C．确定分配方式 D. 确定投资方向 8．利润最大化目标和每股利润最大化目标存在的共同缺陷有( ABD )。 A．没有考虑货币时间价值 B．没有考虑风险因素 C．没有考虑利润与资本的关系 D. 容易导致短期行为 11．下列属于货币市场工具的有( BD )。 A．股票 B．短期国库券 C．债券 D．回购协议 项目二财务管理价值观念培养 一、单项选择题 2．一定时期内每期期初等额收付的系列款项是( A )。 A．即付年金 B．永续年金 C．递延年金 D．普通年金 4．年内复利m次时，其名义利率r与实际利率i之间的关系是( A )。 A．i＝(1+r／m)m-1 B. i＝(1+r／m)-1 C．i＝(1+r／m)-m -1 D. i＝l-(1+r／m)-m 5．甲某拟存入一笔资金以备3年后使用。假定银行3年期存款年利率为5％，甲某3年后需用的资金总额为34 500元，则在单利计息情况下，目前需存入的资金为( A )元。 A．30 000 B．29 803．04 C．32 857．14 D．31 500 6．如果某人5年后想拥有50 000元，在年利率为5％、单利计息的情况下，他现在必
Multiple Choice Questions 1. Which of the following is not a characteristic of a money market instrument? A) liquidity B) marketability C) long maturity D) liquidity premium E) C and D Answer: E Difficulty: Easy Rationale: Money market instruments are short-term instruments with high liquidity and marketability; they do not have long maturities nor pay liquidity premiums. 2. Which one of the following is not a money market instrument? A) a Treasury bill B) a negotiable certificate of deposit C) commercial paper D) a Treasury bond E) a Eurodollar account Answer: D Difficulty: Easy Rationale: Money market instruments are instruments with maturities of one year or less, which applies to all of the above except Treasury bonds. See Table 2.1, page 33. 3. T-bills are financial instruments initially sold by ________ to raise funds. A) commercial banks B) the U. S. government C) state and local governments D) agencies of the federal government E) B and D Answer: B Difficulty: Easy Rationale: Only the U. S. government sells T-bills in the primary market.
CHAPTER 2 Financial Statements & Cash Flow Multiple Choice Questions: I. DEFINITIONS BALANCE SHEET b 1. The financial statement showing a firm’s accounting value on a particular date is the: a. income statement. b. balance sheet. c. statement of cash flows. d. tax reconciliation statement. e. shareholders’ equity sheet. Difficulty level: Easy CURRENT ASSETS c 2. A current asset is: a. an item currently owned by the firm. b. an item that the firm expects to own within the next year. c. an item currently owned by the firm that will convert to cash within the next 12 months. d. the amount of cash on hand the firm currently shows on its balance sheet. e. the market value of all items currently owned by the firm. Difficulty level: Easy LONG-TERM DEBT b 3. The long-term debts of a firm are liabilities: a. that come due within the next 12 months. b. that do not come due for at least 12 months. c. owed to the firm’s suppliers. d. owed to the firm’s shareholders. e. the firm expects to incur within the next 12 months. Difficulty level: Easy NET WORKING CAPITAL e 4. Net working capital is defined as: a. total liabilities minus shareholders’ equity. b. current liabilities minus shareholders’ equity. c. fixed assets minus long-term liabilities. d. total assets minus total liabilities. e. current assets minus current liabilities. Difficulty level: Easy LIQUID ASSETS d 5. A(n) ____ asset is on e which can be quickly converted into cash without significant loss in value.
Chapter 20 Issuing Securities to the Public Multiple Choice Questions 1. An equity issue sold directly to the public is called: A. a rights offer. B. a general cash offer. C. a restricted placement. D. a fully funded sales. E. a standard call issue. 2. An equity issue sold to the firm's existing stockholders is called: A. a rights offer. B. a general cash offer. C. a private placement. D. an underpriced issue. E. an investment banker's issue. 3. Management's first step in any issue of securities to the public is: A. to file a registration form with the SEC. B. to distribute copies of the preliminary prospectus. C. to distribute copies of the final prospectus. D. to obtain approval from the board of directors. E. to prepare the tombstone advertisement. 4. A rights offering is: A. the issuing of options on shares to the general public to acquire stock. B. the issuing of an option directly to the existing shareholders to acquire stock. C. the issuing of proxies which are used by shareholders to exercise their voting rights. D. strictly a public market claim on the company which can be traded on an exchange. E. the awarding of special perquisites to management.
1）单选题，共20题，每题5.0分，共100.0分1 单选题 (5.0分) 资产未来创造的现金流入现值称为？ A. 资产的价格 B. 资产的分配 C. 资产的价值 D. 资产的体量 2 单选题 (5.0分) 谁承担了公司运营的最后风险？ A. 债权人 B. 股东 C. 管理层 D. 委托人 3 单选题 (5.0分) 金融市场有哪些类型？ A. 货币市场 B. 资本市场 C. 期货市场 D. 以上都是 4 单选题 (5.0分) 以下哪项是债券价值评估方式？ A. 现值估价模型 B. 到期收益率 C. 债券收益率 D. 以上都是 5 单选题 (5.0分) 融资直接与间接的划分方式取决于？ A. 融资的受益方 B. 金融凭证的设计方 C. 融资来源 D. 融资规模
6 单选题 (5.0分) 以下哪种不是财务分析方法？ A. 比较分析 B. 对比分析 C. 趋势百分比分析 D. 财务比例分析 7 单选题 (5.0分) 以下哪个不是价值的构成？ A. 现金流量 B. 现值 C. 期限 D. 折现率 8 单选题 (5.0分) 比率分析的目的是为了？ A. 了解项目之间的关系 B. 了解金融发展变化 C. 分析资金流动趋势 D. 分析金融风险 9 单选题 (5.0分) 影响公司价值的主要因素是？ A. 市场 B. 政策 C. 信息 D. 时间 10 单选题 (5.0分) 以下哪种是内部融资方式？ A. 留存收益 B. 股票 C. 债券 D. 借款 11 单选题 (5.0分)
什么是营运资本？ A. 流动资产-流动负债 B. 流动资产+流动负债 C. 流动资产*流动负债 D. 流动资产/流动负债 12 单选题 (5.0分) PMT所代表的含义是？ A. 现值 B. 终值 C. 年金 D. 利率 13 单选题 (5.0分) 金融市场的作用是什么？ A. 资金的筹措与投放 B. 分散风险 C. 降低交易成本 D. 以上都是 14 单选题 (5.0分) 以下哪项不是财务管理的内容？ A. 筹资 B. 融资 C. 信贷 D. 营运资本管理 15 单选题 (5.0分) 微观金融的研究对象是什么？ A. 机构财政 B. 账目管理 C. 股市投资 D. 公司理财 16 单选题 (5.0分) 计划经济时代企业的资金来源是？
Chapter 30 Financial Distress Multiple Choice Questions 1. Financial distress can be best described by which of the following situations in which the firm is forced to take corrective action? A. Cash payments are delayed to creditors. B. The market value of the stock declines by 10%. C. The firm's operating cash flow is insufficient to pay current obligations. D. Cash distributions are eliminated because the board of directors considers the surplus account to be low. E. None of the above. 2. Insolvency can be defined as: A. not having cash. B. being illiquid. C. an inability to pay one's debts. D. an inability to increase one's debts. E. the present value of payments being less than assets. 3. Stock-based insolvency is a: A. income statement measurement. B. balance sheet measurement. C. a book value measurement only. D. Both A and C. E. Both B and C. 4. Flow-based insolvency is: A. a balance sheet measurement. B. a negative equity position. C. when operating cash flow is insufficient to meet current obligations. D. inability to pay one's debts. E. Both C and D.
【思考与练习题】部分习题参考答案 第3章 6. 该公司资产负债表为 XX公司资产负债表XX年12月31日资产期末余额负债及所有者权益期末余额 流动资产流动负债 现金及其等400 应付账款600 价物800 应交税金200 应收账款1200 流动负债合计800 流动资产合计非流动负债 非流动资产3400 应付债券700 固定资产8200 非流动负债合计700 无形资产11600 所有者权益 非流动资产合计实收资本8800 股本溢价1900 留存收益600 所有者权益合计11300 资产总计12800 资产及所有者权益合计12800 7. 公司2007年的净现金流为-25万元。 8. 各比例如下： 4. （1）1628.89 元；（2）1967.15 元；（3）2653.30 元 5. 现在要投入金额为38.55万元。 6. 8年末银行存款总值为6794.89元（前4年可作为年金处理）。 7. （1）1259.71 元；（2）1265.32 元；（3）1270.24 元；（4）1271.25 元；（5）其他条件不变的情况下，同一利息期间计息频率越高，终值越大；至琏续计算利息时达到最大值。 8. （1）每年存入银行4347.26元；（2）本年存入17824.65元。 9. 基本原理是如果净现值大于零，则可以购买；如果小于零，则不应购买。 NPV=-8718.22，小于零，故不应该购买。 第5章 8. （1）该证券的期望收益率=0.15 X 8%+0.30X 7%+0.40X 10%+0.15X 15%=9.55%
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Chapter 04 Discounted Cash Flow Valuation Answer Key Multiple Choice Questions 1. An annuity stream of cash flow payments is a set of: A.level cash flows occurring each time period for a fixed length of time. B. level cash flows occurring each time period forever. C. increasing cash flows occurring each time period for a fixed length of time. D. increasing cash flows occurring each time period forever. E. arbitrary cash flows occurring each time period for no more than 10 years. Difficulty level: Easy Topic: ANNUITY Type: DEFINITIONS
2. Annuities where the payments occur at the end of each time period are called _____, whereas _____ refer to annuity streams with payments occurring at the beginning of each time period. A. ordinary annuities; early annuities B. late annuities; straight annuities C. straight annuities; late annuities D. annuities due; ordinary annuities E.ordinary annuities; annuities due Difficulty level: Easy Topic: ANNUITIES DUE Type: DEFINITIONS
Chapter 13 Risk, Cost of Capital, and Capital Budgeting Answer Key Multiple Choice Questions 1. The weighted average of the firm's costs of equity, preferred stock, and after tax debt is the: A. reward to risk ratio for the firm. B. expected capital gains yield for the stock. C. expected capital gains yield for the firm. D. portfolio beta for the firm. E. weighted average cost of capital (WACC). Difficulty level: Easy Topic: WACC Type: DEFINITIONS 2. If the CAPM is used to estimate the cost of equity capital, the expected excess market return is equal to the: A. return on the stock minus the risk-free rate. B. difference between the return on the market and the risk-free rate. C. beta times the market risk premium. D. beta times the risk-free rate. E. market rate of return. Difficulty level: Easy Topic: CAPM Type: DEFINITIONS
习题一 1.5.1单项选择题 1 ．不能偿还到期债务是威胁企业生存的（）。 A ．外在原因 B ．内在原因 C ．直接原因 D ．间接原因 2．下列属于有关竞争环境的原则的是（）。 A ．净增效益原则 B ．比较优势原则 C ．期权原则 D ．自利行为原则3．属于信号传递原则进一步运用的原则是指（） A ．自利行为原则 B ．比较优势原则 C . 引导原则 D ．期权原则 4 ．从公司当局可控因素来看，影响报酬率和风险的财务活动是（）。 A ．筹资活动 B ．投资活动 C ．营运活动 D ．分配活动 5 ．自利行为原则的依据是（）。 A ．理性的经济人假设 B ．商业交易至少有两方、交易是“零和博弈”，以及各方都是自利的 C ．分工理论 D ．投资组合理论 6 ．下列关于“有价值创意原则”的表述中，错误的是（）。 A ．任何一项创新的优势都是暂时的 B ．新的创意可能会减少现有项目的价值或者使它变得毫无意义 C ．金融资产投资活动是“有价值创意原则”的主要应用领域 D ．成功的筹资很少能使企业取得非凡的获利能力 7 ．通货膨胀时期，企业应优先考虑的资金来源是（） A ．长期负债 B ．流动负债 C ．发行新股 D ．留存收益 8．股东和经营者发生冲突的根本原因在于（）。 A ．具体行为目标不一致 B ．掌握的信息不一致 C ．利益动机不同 D ，在企业中的地位不同 9 ．双方交易原则没有提到的是（）。 A ．每一笔交易都至少存在两方，双方都会遵循自利行为原则 B ．在财务决策时要正确预见对方的反映 C ．在财务交易时要考虑税收的影响 D ．在财务交易时要以“自我为中心” 10．企业价值最大化目标强调的是企业的（）。 A ．预计获利能力 B ．现有生产能力 C ．潜在销售能力 D ．实际获利能力11．债权人为了防止其利益受伤害，通常采取的措施不包括（）。 A ．寻求立法保护 B ．规定资金的用途 C ．提前收回借款 D ．不允许发行新股12．理性的投资者应以公司的行为作为判断未来收益状况的依据是基于（）的要求。 A ．资本市场有效原则 B ．比较优势原则 C ．信号传递原则 D ．引导原则13．以每股收益最大化作为财务管理目标，存在的缺陷是（）。 A ．不能反映资本的获利水平 B ．不能用于不同资本规模的企业间比较 C ．不能用于同一企业的不同期间比较 D ．没有考虑风险因素和时间价值 14 ．以下不属于创造价值原则的是（）。 A ．净增效益原则 B ．比较优势原则 C ．期权原则 D ．风险—报酬权衡原则 15. 利率=（）＋通货膨胀附加率＋变现力附加率+违约风险附加率+到期风险附加率。 A ．物价指数附加率 B ．纯粹利率 C ．风险附加率 D ．政策变动风险 1.5.2多项选择题
Chapter Two The Financial Services Industry: Depository Institutions Chapter Outline Introduction Commercial Banks ?Size, Structure, and Composition of the Industry ?Balance Sheet and Recent Trends ?Other Fee-Generating Activities ?Regulation ?Industry Performance Savings Institutions ?Savings Associations (SAs) ?Savings Banks ?Recent Performance of Savings Associations and Savings Banks Credit Unions ?Size, Structure, and Composition of the Industry and Recent Trends ?Balance Sheets ?Regulation ?Industry Performance Global Issues: Japan, China, and Germany Summary Appendix 2A: Financial Statement Analysis Using a Return on Equity (ROE) Framework Appendix 2B: Depository Institutions and Their Regulators Appendix 3B: Technology in Commercial Banking
CHAPTER 8 Making Capital Investment Decisions I. DEFINITIONS INCREMENTAL CASH FLOWS a 1. The changes in a firm's future cash flows that are a direct consequence of accepting a project are called _____ cash flows. a. incremental b. stand-alone c. after-tax d. net present value e. erosion Difficulty level: Easy EQUIVALENT ANNUAL COST e 2. The annual annuity stream o f payments with the same present value as a project's costs is called the project's _____ cost. a. incremental b. sunk c. opportunity d. erosion e. equivalent annual Difficulty level: Easy SUNK COSTS c 3. A cost that has already been paid, or the liability to pay has already been incurred, is a(n): a. salvage value expense. b. net working capital expense. c. sunk cost. d. opportunity cost. e. erosion cost. Difficulty level: Easy OPPORTUNITY COSTS d 4. Th e most valuable investment given up i f an alternative investment is chosen is a(n): a. salvage value expense. b. net working capital expense.
Chapter 16 Capital Structure: Basic Concepts Multiple Choice Questions 1. The use of personal borrowing to change the overall amount of financial leverage to which an individual is exposed is called: A. homemade leverage. B. dividend recapture. C. the weighted average cost of capital. D. private debt placement. E. personal offset. 2. The proposition that the value of the firm is independent of its capital structure is called: A. the capital asset pricing model. B. MM Proposition I. C. MM Proposition II. D. the law of one price. E. the efficient markets hypothesis. 3. The proposition that the cost of equity is a positive linear function of capital structure is called: A. the capital asset pricing model. B. MM Proposition I. C. MM Proposition II. D. the law of one price. E. the efficient markets hypothesis. 4. The tax savings of the firm derived from the deductibility of interest expense is called the: A. interest tax shield. B. depreciable basis. C. financing umbrella. D. current yield. E. tax-loss carry forward savings.
公司理财复习题 一、单选选择题 1、企业的管理目标的最优表达是（C ） A．利润最大化 B．每股利润最大化 C．企业价值最大化 D．资本利润率最大化 2、把若干财务比率用线性关系结合起来,以此评价企业信用水平的方法是(B ) A杜邦分析法B沃尔综合评分法C预警分析法D经营杠杆系数分析3、“5C”系统中的“信用品质”是指（ D ） A．不利经济环境对客户偿付能力的影响 B．客户偿付能力的高低 C．客户的经济实力与财务状况 D．客户履约或赖账的可能性4、投资报酬分析最主要的分析主体是( B ) A上级主管部门B投资人C长期债人D短期债权人 5、普通年金终值系数的倒数称为（ B ） A复利终值系数B偿债基金系数C普通年金现值系数D投资回收系数6、为了直接分析企业财务善和经营成果在同行中所处的地位,需要进行同业比较分析,其中行业标准产生的依据是( D ) A历史先进水平B历史平均水平C行业先进水平D行业平均水平 7、J公司2008年的主营业务收入为500 000万元，其年初资产总额为650 000万元，年末资产总额为600 000万元，则该公司的总资产周转率为( D) A。77 B。83 C。4 D。8 8、下列选项中，不属于资产负债表中长期资产的是( A ) A应付债券B固定资产C无形资产D长期投资 9、计算总资产收益率指标时，其分子是( B )。 A. 利润总额 B. 净利润 C. 息税前利润 D. 营业利润 10．在财务报表分析中，投资人是指（D）。 A 社会公众B金融机构 C 优先股东D普通股东 11．流动资产和流动负债的比值被称为（A ）。 A流动比率B速动比率C营运比率D资产负债比率12．下列各项中，（D）不是影响固定资产净值升降的直接因素。 A固定资产净残值B固定资产折旧方法 C折旧年限的变动D固定资产减值准备的计提 13、债权人在进行企业财务分析时，最为关注的是（B）。 A.获利能力 B.偿债能力 C.发展能力 D.资产运营能力 14、能够直接取得所需的先进设备和技术，从而能尽快地形成企业的生产经营能力的筹资形式是（ B ） A．股票筹资B．吸收直接投资C．债券筹资D．融资租赁 15、下列项目中，属于非交易动机的有（ D ） A支付工资B购买原材料C偿付到期债务D伺机购买质高价廉的原材料16、下列项目中属于非速动资产的有（ D ） A．应收账款净额B．其他应收款C．短期投资 D．存货 17、下列（ C）不属于固定资产投资决策要素。 A.可用资本的成本和规模 B. 项目盈利性 C. 决策者的主观意愿和能力 D. 企业承担风险的意愿和能力 18、确定一个投资方案可行的必要条件是（ B ）。
CHAPTER 12 Some Lessons from Capital Market History I. DEFINITIONS RISK PREMIUM a 1. The excess return required from a risky asset over that required from a risk-free asset is called the: a. risk premium. b. geometric premium. c. excess return. d. average return. e. variance. VARIANCE b 2. The average squared difference between the actual return and the average return is called the: a. volatility return. b. variance. c. standard deviation. d. risk premium. e. excess return. STANDARD DEVIATION c 3. The standar d deviation for a set of stock returns can b e calculated as the: a. positive square root of the average return. b. average squared difference between the actual return and the average return. c. positive square root of the variance. d. average return divided by N minus one, where N is the number of returns. e. variance squared. NORMAL DISTRIBUTION d 4. A symmetric, bell-shaped frequency distribution that is completely defined by its mean and standard deviation is the _____ distribution. a. gamma
第二章财务报表分析 一、单选题 1．假定甲公司向乙公司赊销产品，并持有丙公司的债券和丁公司的股票，且向戊公司支付公司债利息。在不考虑其他条件的情况下，从甲公司的角度看，下列各项中属于本企业与债权人之间财务关系的是（）。（南京大学2011金融硕士） A．甲公司与乙公司之间的关系 B．甲公司与丙公司之间的关系 C．甲公司与丁公两之间的关系 D．甲公司与戊公司之间的关系 【答案】D 【解析】甲公司与乙公司是商业信用关系；甲公司为丙公司的债权人；甲公司是丁公司的股东；戊公司是甲公司的债权人。 2．杜邦财务分析体系的核心指标是（）。（浙江财经学院2011金融硕士） A．总资产报酬率 B．可持续增长率 C．ROE D．销售利润率 【答案】C 【解析】杜邦分析体系是对企业的综合经营理财及经济效益进行的系统分析评价，其恒
等式为：ROE=销售利润率×总资产周转率×权益乘数。可以看到净资产收益率（ROE）反映所有者投入资金的获利能力，反映企业筹资、投资、资产运营等活动的效率，是一个综合性最强的财务比率，所以净资产收益率是杜邦分析体系的核心指标。 3．影响企业短期偿债能力的最根本原因是（）。（浙江财经学院2011金融硕士）A．企业的资产结构 B．企业的融资结构 C．企业的权益结构 D．企业的经营业绩 【答案】D 【解析】短期偿债能力比率是一组旨在提供企业流动性信息的财务比率，有时也被称为流动性指标。它们主要关心企业短期内在不引起不适当压力的情况下支付账单的能力，因此，这些指标关注企业的流动资产和流动负债，但短期偿债能力比率的大小会因行业类型而不同，影响企业短期偿债能力的最根本原因还是企业的经营业绩。 4．市盈率是投资者用来衡量上市公司盈利能力的重要指标，关于市盈率的说法不正确的是（）。（浙江工商大学2011金融硕士） A．市盈率反映投资者对每股盈余所愿意支付的价格 B．市盈率越高表明人们对该股票的评价越高，所以进行股票投资时应该选择市盈率最高的股票 C．当每股盈余很小时，市盈率不说明任何问题 D．如果上市公司操纵利润，市盈率指标也就失去了意义