Question 1

Which of the following is not a method for controlling pledged inventory?

Accepted Answer

A)  Blanket inventory liens 
B)  Floor planning 
C)  Public warehousing 
D)  Each of the above is an inventory control method 
A)  Blanket inventory liens 
B)  Floor planning 
C)  Public warehousing 
D)  Each of the above is an inventory control method

Question 2

Eurodollar loans are similar to U.S. bank loans in that they are usually short-term in nature.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is not a method for lenders to control pledged inventory?

Accepted Answer

A)  Blanket inventory liens 
B)  Trust receipts 
C)  Warehousing 
D)  Factoring 
A)  Blanket inventory liens 
B)  Trust receipts 
C)  Warehousing 
D)  Factoring

Question 4

Which of the following best describes the benefits to the borrower of selling asset backed securities?

Accepted Answer

A)  Due to the portfolio effect, the borrower can package up low quality accounts receivable and sell them for a premium price. 
B)  The borrower trades future cash flows for current cash flows. 
C)  The asset-backed security is likely to carry a high credit rating of AA or better. 
D)  b and c are correct. 
A)  Due to the portfolio effect, the borrower can package up low quality accounts receivable and sell them for a premium price. 
B)  The borrower trades future cash flows for current cash flows. 
C)  The asset-backed security is likely to carry a high credit rating of AA or better. 
D)  b and c are correct.

Question 5

All of the following are benefits of commercial paper to the corporation except:

Accepted Answer

A)  it is often issued at below the prime interest rate 
B)  there are no compensating balance requirements 
C)  they are less risky 
D)  they provide prestige 
A)  it is often issued at below the prime interest rate 
B)  there are no compensating balance requirements 
C)  they are less risky 
D)  they provide prestige

Question 6

Compensating balances

Accepted Answer

A)  are used by banks as a substitute for charging service fees. 
B)  are created by having a sweep account. 
C)  generate returns to customers from interest bearing accounts. 
D)  are used to reward new accounts. 
A)  are used by banks as a substitute for charging service fees. 
B)  are created by having a sweep account. 
C)  generate returns to customers from interest bearing accounts. 
D)  are used to reward new accounts.

Question 7

Larger firms tend to be net users of trade credit.

Accepted Answer

A) True 
 B)False

Which of the following is not a method for controlling pledged inventory?

Eurodollar loans are similar to U.S. bank loans in that they are usually short-term in nature.

Which of the following is not a method for lenders to control pledged inventory?

Which of the following best describes the benefits to the borrower of selling asset backed securities?

All of the following are benefits of commercial paper to the corporation except:

Compensating balances

Larger firms tend to be net users of trade credit.

The Goals and Functions of Financial Management

Review of Accounting

Financial Analysis

Financial Forecasting

Operating and Financial Leverage

Working Capital and the Financing Decision

Current Asset Management

The Time Value of Money

Valuation and Rates of Return

Cost of Capital

The Capital Budgeting Decision

Risk and Capital Budgeting

Capital Markets

Investment Banking: Public and Private Placement

Long-Term Debt and Lease Financing

Common and Preferred Stock Financing

Dividend Policy and Retained Earnings

Convertibles, Warrants, and Derivatives

External Growth Through Mergers

International Financial Management

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Exam 8: Sources of Short-Term Financing

Which of the following is not a method for controlling pledged inventory?

Eurodollar loans are similar to U.S. bank loans in that they are usually short-term in nature.

Which of the following is not a method for lenders to control pledged inventory?

Which of the following best describes the benefits to the borrower of selling asset backed securities?

All of the following are benefits of commercial paper to the corporation except:

Compensating balances

Larger firms tend to be net users of trade credit.

The Goals and Functions of Financial Management

Review of Accounting

Financial Analysis

Financial Forecasting

Operating and Financial Leverage

Working Capital and the Financing Decision

Current Asset Management

The Time Value of Money

Valuation and Rates of Return

Cost of Capital

The Capital Budgeting Decision

Risk and Capital Budgeting

Capital Markets

Investment Banking: Public and Private Placement

Long-Term Debt and Lease Financing

Common and Preferred Stock Financing

Dividend Policy and Retained Earnings

Convertibles, Warrants, and Derivatives

External Growth Through Mergers

International Financial Management

Filters