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BFIN 300 TEST QUESTIONS WITH REVISED AND UPDATED ANWERS ALL CORRECT

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  • BFIN 300

BFIN 300 TEST QUESTIONS WITH REVISED AND UPDATED ANWERS ALL CORRECT During the Global Financial Crisis Interest Only financial products were a significant problem Which is the best example of an I / O security ? A. Mortgage ; B. Corporate bond ; C. A Pure discount loan ; D. All of the above . ...

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  • October 9, 2024
  • 5
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • BFIN 300
  • BFIN 300
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BFIN 300 TEST QUESTIONS
WITH REVISED AND UPDATED
ANWERS ALL CORRECT

During the Global Financial Crisis Interest Only financial products were a significant
problem Which is the best example of an I / O security ?

A. Mortgage ; B. Corporate bond ; C. A Pure discount loan ; D. All of the above . -
Answer-B. Corporate bond

Which is the best definition of an annuity ?

A. A cash flow stream which arises when the stream of consistent cash flows continues
forever ; B. Preferred shares ; C. A cash flow stream where a fixed amount is received
every year ; D. Effective annual rate . - Answer-C. A cash flow stream where a fixed
amount is received every year ;

What is a financial security ?

A. Ease with which an owner of an asset can sell it ; B. A claim against assets of cash
flows of a company ; C. Dow Jones Industrial Average ; or D. Voting rights to elect firm
directors . - Answer-B. A claim against assets of cash flows of a company

Who is the primary regulator of the US securities markets ?

A. Federal Reserve Bank of New York ; B. Chicago Board of Options Exchange ; C.
Securities and Exchange Commission ; or D. New York Stock Exchange . - Answer-C.
Securities and Exchange Commission

The Securities and Exchange Commission does all of the following except

A. Licensing securities professionals ; B. Provide investors with complete disclosure of
material information on listed securities ; C. Regulates US stock exchanges ; or D.
Regulates all national banks in the US . - Answer-D. Regulates all national banks in the
US .

Which of the following is a security traded in the US money market ?

A. Mortgage - backed securities ; B. Treasury Bills ; C. Preferred Stock ; or D. Corporate
bonds . - Answer-B. Treasury Bills
What is the best definition of a derivative in the context of securities markets ?

A. The degree to which an asset or security can be bought or sold in the market without
affecting its price B. Buying or selling a stock at the current market price ; C. Financial
decisions and their impact on the value of a company ; or D. A security where the value

, is based on the value of another security . - Answer-D. A security where the value is
based on the value of another security .

A Johnson & Johnson bond pays an 8 % coupon rate on a bond provided that its
earnings exceed an ROE of 8 % . What type of security is this ?

A. Perpetual bond ; B. Equity ; C. Dividend ; or D. Income bond . - Answer-D. Income
bond

Which security has the greatest preference in liquidation ? A. Equity ; B. Preferred
shares ; C. Subordinated debt ; or D. Senior debt . - Answer-D. Senior debt


Which bond would you invest in ? - Answer-You want the bond with the highest yield

The process of planning and managing a firm's long - term investments is called

A. Capital Budgeting B. Working Capital C. Profit Maximization D. Capital Structure -
Answer-A. Capital Budgeting

2 ) Which of the following is an example of an indirect agency cost ?

A. Unnecessary corporate expenditure B. Management auditing expense C. A lost
opportunity D. All the above the following - Answer-C. A lost opportunity

3 ) Which of the following forms of business organization is subject to double taxation ?

A. Corporation B. Partnership C. Limited Partnership D. Sole Proprietorship - Answer-A.
Corporation

4 ) Control of a firm ultimately rests with ...

A. The CEO B. The SEC C. The Stockholders . D. The Founder - Answer-D. The
Founder

Which of the following should a financial manager take into account when considering
an opportunity?

A. How much cash they expect to receive B. When will they receive the funds C. How
likely they are to receive the funds D. All of the above - Answer-D. All of the above

Which is a financial leverage ratio ?

A. Current ratio B. Profit margin C. Price to book value D. Debt to equity E. Inventory
turnover - Answer-D. Debt to equity

Which is a key turnover ratio ?

A. Inventory turnover ratio B. Asset turnover ratio C. Receivables turnover ratio D. Fixed
asset turnover ratio . E. All of the ratios above - Answer-E. All of the ratios above

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