Question 1

In making investment decision,the potential return on possible projects is largely irrelevant and therefore not analysed.

Accepted Answer

A) True 
 B)False

Question 2

An asset that sells for $105,has a required rate of return of 10% and produces a cash flow of $120 in one year's time is a worthwhile investment.

Accepted Answer

A) True 
 B)False

Question 3

Explain why the existence of institutional investors may encourage management of a corporation to increase owner wealth?

Accepted Answer

Voting power allows the shareholders to

Question 4

What is an opportunity cost?

Accepted Answer

A) The cash outlay you have already made for your previous investments 
B) The future cash flow you would get from an investment under consideration 
C) The future cash flow you would get from a foregone investment 
D) The cash outlay you must make for an investment under consideration 
A) The cash outlay you have already made for your previous investments 
B) The future cash flow you would get from an investment under consideration 
C) The future cash flow you would get from a foregone investment 
D) The cash outlay you must make for an investment under consideration

Question 5

The market section of the Australian Financial Review does not list:

Accepted Answer

A) The Buy/Sell quotes for shares 
B) The weekly high/low share price 
C) The last sale price of companies shares 
D) Earnings per share (EPS) 
A) The Buy/Sell quotes for shares 
B) The weekly high/low share price 
C) The last sale price of companies shares 
D) Earnings per share (EPS)

Question 6

$95 invested today at a rate of 10% p.a.is worth how much in one year's time?

Accepted Answer

A) $104.50 
B) $106.70 
C) $105.60 
D) $103.40 
A) $104.50 
B) $106.70 
C) $105.60 
D) $103.40

Question 7

The goal of the firm is to maximise profits.

Accepted Answer

A) True 
 B)False

Question 8

What are the major elements of the Australian capital market? What types of financing does each facilitate?

Accepted Answer

The banking sector,in particular the 'bi

Question 9

A financial asset is an asset that produces cash flows,or that you can sell to produce a cash flow in the future.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is a key role of the Australian Securities and Investments Commission?

Accepted Answer

A) Policy advice to government 
B) Prevent corporate crime 
C) Protect investors 
D) Both B and C 
A) Policy advice to government 
B) Prevent corporate crime 
C) Protect investors 
D) Both B and C

Question 11

In the formula FV = PV × (1 + r),what does r denote?

Accepted Answer

A) The opportunity cost 
B) The hurdle rate 
C) The discount rate 
D) All of the above 
A) The opportunity cost 
B) The hurdle rate 
C) The discount rate 
D) All of the above

Question 12

Which of these is the bid- ask spread?

Accepted Answer

A) Part of the cost of trading shares 
B) The opportunity cost of selling shares 
C) The difference between the best buy and the best sell quote 
D) Both A and B 
E) Both A and C 
A) Part of the cost of trading shares 
B) The opportunity cost of selling shares 
C) The difference between the best buy and the best sell quote 
D) Both A and B 
E) Both A and C

Question 13

What are the choices that corporate managers must face when trying to achieve the corporate goal?

Accepted Answer

The investment decision,which relates to

Question 14

What is the market for corporate control?

Accepted Answer

A) The market for issuing and trading debt securities 
B) The market for operational control over the firm's decisions 
C) The market for issuing and trading equity securities 
D) All of the above 
A) The market for issuing and trading debt securities 
B) The market for operational control over the firm's decisions 
C) The market for issuing and trading equity securities 
D) All of the above

Question 15

The roles of the Australian Securities and Investments Commission (ASIC)are to prevent corporate crime and to protect investors.

Accepted Answer

A) True 
 B)False

Question 16

What is the total value of all shares on issue in the marketplace for a firm referred to as?

Accepted Answer

A) Rate of return 
B) Net assets 
C) Market capitalisation 
D) Owners equity 
A) Rate of return 
B) Net assets 
C) Market capitalisation 
D) Owners equity

Question 17

How does the dividend decision affect a firm's equity holders?

Accepted Answer

A) It may mean equity holders don't receive dividends every year. 
B) It could alter the capital gains equity holders can expect. 
C) It affects the form in which returns generated by the firm are passed on to equity holders. 
D) All of the above 
A) It may mean equity holders don't receive dividends every year. 
B) It could alter the capital gains equity holders can expect. 
C) It affects the form in which returns generated by the firm are passed on to equity holders. 
D) All of the above

Question 18

An example of a cash flow stemming from bonds is:

Accepted Answer

A) The principal repayment on maturity 
B) The bond premium payable 
C) The discount to face value when issued 
D) All of the above 
A) The principal repayment on maturity 
B) The bond premium payable 
C) The discount to face value when issued 
D) All of the above

Question 19

Investors make consumption and investment decisions.

Accepted Answer

A) True 
 B)False

Question 20

The determinants of an asset's intrinsic value do not include:

Accepted Answer

A) The opportunity cost of capital 
B) The future cash flow expected from the asset 
C) The market price of the asset 
D) None of the above 
A) The opportunity cost of capital 
B) The future cash flow expected from the asset 
C) The market price of the asset 
D) None of the above

In making investment decision,the potential return on possible projects is largely irrelevant and therefore not analysed.

An asset that sells for $105,has a required rate of return of 10% and produces a cash flow of $120 in one year's time is a worthwhile investment.

Explain why the existence of institutional investors may encourage management of a corporation to increase owner wealth?

What is an opportunity cost?

The market section of the Australian Financial Review does not list:

$95 invested today at a rate of 10% p.a.is worth how much in one year's time?

The goal of the firm is to maximise profits.

What are the major elements of the Australian capital market? What types of financing does each facilitate?

A financial asset is an asset that produces cash flows,or that you can sell to produce a cash flow in the future.

Which of the following is a key role of the Australian Securities and Investments Commission?

In the formula FV = PV × (1 + r),what does r denote?

Which of these is the bid- ask spread?

What are the choices that corporate managers must face when trying to achieve the corporate goal?

What is the market for corporate control?

The roles of the Australian Securities and Investments Commission (ASIC)are to prevent corporate crime and to protect investors.

What is the total value of all shares on issue in the marketplace for a firm referred to as?

How does the dividend decision affect a firm's equity holders?

An example of a cash flow stemming from bonds is:

Investors make consumption and investment decisions.

The determinants of an asset's intrinsic value do not include:

A Review of Financial Mathematics

Valuation of Shares and Bonds

Capital Budgeting: Basic Techniques

Capital Budgeting: Further Issues

Risk and Return

Capital Asset Pricing Model

Company Cost of Capital

Australian Equities Market

The Pricing Efficiency of Capital Markets

Dividend Policy

Capital Structure Policy

Risk Management

Working Capital New

Filters

Exam 1: Preliminary Concepts

In making investment decision,the potential return on possible projects is largely irrelevant and therefore not analysed.

An asset that sells for $105,has a required rate of return of 10% and produces a cash flow of $120 in one year's time is a worthwhile investment.

Explain why the existence of institutional investors may encourage management of a corporation to increase owner wealth?

What is an opportunity cost?

The market section of the Australian Financial Review does not list:

$95 invested today at a rate of 10% p.a.is worth how much in one year's time?

The goal of the firm is to maximise profits.

What are the major elements of the Australian capital market? What types of financing does each facilitate?

A financial asset is an asset that produces cash flows,or that you can sell to produce a cash flow in the future.

Which of the following is a key role of the Australian Securities and Investments Commission?

In the formula FV = PV × (1 + r),what does r denote?

Which of these is the bid- ask spread?

What are the choices that corporate managers must face when trying to achieve the corporate goal?

What is the market for corporate control?

The roles of the Australian Securities and Investments Commission (ASIC)are to prevent corporate crime and to protect investors.

What is the total value of all shares on issue in the marketplace for a firm referred to as?

How does the dividend decision affect a firm's equity holders?

An example of a cash flow stemming from bonds is:

Investors make consumption and investment decisions.

The determinants of an asset's intrinsic value do not include:

A Review of Financial Mathematics

Valuation of Shares and Bonds

Capital Budgeting: Basic Techniques

Capital Budgeting: Further Issues

Risk and Return

Capital Asset Pricing Model

Company Cost of Capital

Australian Equities Market

The Pricing Efficiency of Capital Markets

Dividend Policy

Capital Structure Policy

Risk Management

Working Capital New

Filters