1. Read All Questions Carefully: Make sure you understand each question.
2. Time Management: You have a specific amount of time to complete the exam.
Keep an eye on the clock and pace yourself.
3. Allowed Materials: Only use materials that are explicitly allowed. Unauthorized
materials can lead to disqualification.
4. ANS Format: Follow the required format for your ANS. For example, multiple-
choice questions might need you to select the best ANS, while essay questions
require detailed responses.
5. Academic Integrity: Adhere to the university's honor code. Any form of cheating or
plagiarism is strictly prohibited.
6. Technical Requirements: Ensure your computer and internet connection are
stable. For online exams, you might need a webcam and microphone for proctoring
purposes.
7. Submission: Submit your ANS before the time expires. Late submissions might
not be accepted.
,1. Which of the following is a key principle of Modern Portfolio
Theory (MPT)?
- A) Maximizing returns without considering risk
- B) Diversification to reduce risk
- C) Investing in a single asset class
- D) Ignoring market volatility
- ANS: B) Diversification to reduce risk
- Rationale: MPT emphasizes diversification to optimize the
balance between risk and return.
,3. Which financial statement provides a snapshot of a company's
financial position at a specific point in time?
- A) Income Statement
- B) Balance Sheet
- C) Cash Flow Statement
- D) Statement of Retained Earnings
- ANS: B) Balance Sheet
- Rationale: The balance sheet shows a company's assets,
liabilities, and equity at a specific date.
Fill-in-the-Blank Questions
4. The ___________ is a measure of a company's profitability
that excludes interest and income tax expenses.
- ANS: Operating Income
- Rationale: Operating income reflects the profit generated
from core business operations.
, - Rationale: Capital budgeting involves analyzing and
selecting investments that will yield returns over time.
True/False Questions
6. The Efficient Market Hypothesis (EMH) suggests that all
available information is already reflected in stock prices.
- ANS: True
- Rationale: EMH posits that it is impossible to consistently
achieve higher returns than the overall market through stock
selection or market timing.
7. In a leveraged buyout (LBO), the acquiring company uses a
significant amount of equity to finance the purchase.
- ANS: False
- Rationale: An LBO typically involves using a significant
amount of borrowed money (leverage) to finance the acquisition.
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