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FIN 301 Test Quiz with Correct Answers

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  • FIN 301
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  • FIN 301

small cap stocks are riskier than corporate bonds - Answer-true investors believe that transaction costs, taxes, and inflation are the enemy bc they reduce the return on your investments - Answer-true the basic principles of finance dictate that in the short run, stock prices are driven by - ...

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  • August 24, 2024
  • 11
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • fin 301 test quiz with correct answers
  • small cap stocks are riskier than corporate bonds

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  • FIN 301
  • FIN 301

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FIN 301 Test Quiz with Correct Answers
small cap stocks are riskier than corporate bonds - Answer-true

investors believe that transaction costs, taxes, and inflation are the enemy bc they
reduce the return on your investments - Answer-true

the basic principles of finance dictate that in the short run, stock prices are driven by -
Answer-supply and demand

Which of the following would reduce returns of your investment portfolio - Answer-
increase in brokerage commissions

if Apple's stock was at 260 a year ago and trades at 320 today and there was a $10
dividend, what is the return - Answer-320-260 + = 26.9%

If a stock is currently trading at 100 but a company says they will acquire that
company's stock for $120 then what will happen to the stock according to the efficient
market hypothesis - Answer-it will increase as soon as the announcement is made

what does the efficient market hypothesis say about using technical analysis to forecast
future stock prices - Answer-it is useless

If you invest in a stock with a beta of .7 you would expect your return to be - Answer-
lower than that of the overall market

the random walk hypothesis states that - Answer-day to day stock prices move
randomly and independently from one another

the primary business of Berkshire Hathaway is - Answer-insurance

inflation reduces your return by - Answer-reducing the value of the money you receive
on the investment

risk aversion means - Answer-investors take small risks but do not avoid risk at all costs

behavioral finance believes that - Answer-markets are not always efficient

to achieve the highest level of return you have to - Answer-diversify your investment into
different asset classes

long run stock prices are driven by - Answer-corporate earnings

What do behavioral financiers not believe - Answer-that decision makers make rational
decisions that maximize utility

, what is a up front cost of 5% an example of - Answer-transaction cost

management must act in whose interest - Answer-shareholders

which stock is less risky? biotech or utility - Answer-utility

the basic principles of finance dictate that in the short run, stock prices are driven by -
Answer-supply and demand

Which company would you expect to invest the most in plant and equipment - Answer-
oil and gas

capital structure management is managing a company's - Answer-mix between debt
and equity

an example of capital budgeting is - Answer-a pharma company building a new
research facility

has there been an increase in global regulation in corporate finance - Answer-no

communication with markets is the responsibility of which role - Answer-CFO

what are examples of working capital management - Answer-increasing inventory
turnover by carefully monitoring specific product categories
lowering days payable by keeping up to date supply chain information
lowering outstanding inventory by selling it in bulk to retail customers

which of the following is an example of a short term asset - Answer-cash

what is a long term asset category - Answer-PPE

which of the following CFO roles pertain to the accounting department - Answer-
controller

what are balance sheet accounts associated with working capital - Answer-inventory,
short term loan, accounts payable, cash

why would companies aim to grow their market cap - Answer-to increase shareholder
value, to utilize equity financing, to utilize stock to make acquisitions, to compensate
management with shares of the company

market cap is NOT equal to shareholder's equity - Answer-true

what role of the CFO pertains to the finance department - Answer-the treasurer

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