Question 1

You find that a firm that uses debt has a compound leverage factor less than 1.This tells you that ________.

Accepted Answer

A)  the firm's use of financial leverage is positively contributing to ROE 
B)  the firm's use of financial leverage is negatively contributing to ROE 
C)  the firm's use of operating leverage is positively contributing to ROE 
D)  the firm's use of operating leverage is negatively contributing to ROE 
A)  the firm's use of financial leverage is positively contributing to ROE 
B)  the firm's use of financial leverage is negatively contributing to ROE 
C)  the firm's use of operating leverage is positively contributing to ROE 
D)  the firm's use of operating leverage is negatively contributing to ROE

Question 2

Based on the cash flow data in the table for Interceptors Inc.,which of the following statements is/are correct?
I.This firm appears to be a good investment because of its steady growth in cash.
II.This firm has only been able to generate growing cash flows by borrowing or selling equity to offset declining operating cash flows.
III.Financing activities have been increasingly important for this firm's operations,at least in the short run.

Accepted Answer

A)  I only 
B)  II and III only 
C)  II only 
D)  I and II only 
A)  I only 
B)  II and III only 
C)  II only 
D)  I and II only

Question 3

Operating ROA can be found as the product of ______.

Accepted Answer

A)  return on sales x ATO 
B)  tax burden x Interest burden 
C)  interest burden x Leverage ratio 
D)  ROE x Dividend payout ratio 
A)  return on sales x ATO 
B)  tax burden x Interest burden 
C)  interest burden x Leverage ratio 
D)  ROE x Dividend payout ratio

Question 4

Which of the following assets is most liquid?

Accepted Answer

A)  Cash equivalents 
B)  Receivables 
C)  Inventories 
D)  Plant and equipment 
A)  Cash equivalents 
B)  Receivables 
C)  Inventories 
D)  Plant and equipment

You find that a firm that uses debt has a compound leverage factor less than 1.This tells you that ________.

Operating ROA can be found as the product of ______.

Which of the following assets is most liquid?

Investments: Background and Issues

Asset Classes and Financial Instruments

Securities Markets

Mutual Funds and Other Investment Companies

Risk and Return: Past and Prologue

Efficient Diversification

Capital Asset Pricing and Arbitrage Pricing Theory

The Efficient Market Hypothesis

Behavioral Finance and Technical Analysis

Bond Prices and Yields

Managing Bond Portfolios

Macroeconomic and Industry Analysis

Equity Valuation

Options Markets

Option Valuation

Futures Markets and Risk Management

Portfolio Performance Evaluation

Globalization and International Investing

Hedge Funds

Taxes,inflation,and Investment Strategy

Investors and the Investment Process

Filters

Exam 14: Financial Statement Analysis

You find that a firm that uses debt has a compound leverage factor less than 1.This tells you that ________.

Operating ROA can be found as the product of ______.

Which of the following assets is most liquid?

Investments: Background and Issues

Asset Classes and Financial Instruments

Securities Markets

Mutual Funds and Other Investment Companies

Risk and Return: Past and Prologue

Efficient Diversification

Capital Asset Pricing and Arbitrage Pricing Theory

The Efficient Market Hypothesis

Behavioral Finance and Technical Analysis

Bond Prices and Yields

Managing Bond Portfolios

Macroeconomic and Industry Analysis

Equity Valuation

Options Markets

Option Valuation

Futures Markets and Risk Management

Portfolio Performance Evaluation

Globalization and International Investing

Hedge Funds

Taxes,inflation,and Investment Strategy

Investors and the Investment Process

Filters