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BNAD 301 Exam 2 Practice questions with correct answers 2024/2025
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BNAD 301 Exam 2 Practice questions with correct answers 2024/2025
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BNAD 301 Exam 2 PracticeWhich industry has a business model that substantially depends on patents?
A. Aircraft
B. Software
C. Chemical
D. Pharmaceutical
E. Computer chips - ANSD. Pharmaceutical
Which costs should be included as economic costs (mark all that apply)?
A. Sunk costs
B. Opportunity costs
C. Neither A nor B - ANSB. Opportunity costs
A market has a barrier to entry if the incumbent firm(s) (mark all that apply):
A. Hold key patents
B. Have large cash reserves
C. Has a dominant market share
D. Have secret process technologies that reduce costs
E. have long-term exclusive agreements with major customers
F. Place key long-term employees on contracts that block them from working for rival firms. -
ANSA. Hold key patents
D. Have secret process technologies that reduce costs
E. have long-term exclusive agreements with major customers
F. Place key long-term employees on contracts that block them from working for rival firms.
Which exogenous changes usually cause the demand curve to shift left? (mark all that apply):
A. Income rises
B. New producers enter
C. Technology improves
D. Price of a substitute rises
E. Price of a complement rises
F. Inputs become less expensive
G. New regulations increase costs - ANSE. Price of a complement rises
To earn long run profits in a competitive market, the most important consideration is to enter a
market:
,A. That has few sellers.
B. That is experiencing rapid innovation
C. With growing demand
D. With a barrier to further entry
E. Where you already have experience - ANSD. With a barrier to further entry
In a competitive market with free entry, the long term ________ curve is a ________ line.
A. Supply; vertical
B. Demand; vertical
C. Supply; horizontal
D. Demand; horizontal - ANSC. Supply; horizontal
If the opportunity cost of capital is substantial, then the firm is more likely to report:
A. Accounting profits > Economic profits
B. Accounting profits < Economic profits
C. This situation does not affect this inequality - ANSA. Accounting profits > Economic profits
If many previously procured resources have low salvage value, then the firm is more likely to
report:
A. Accounting profits > Economic profits
B. Accounting profits < Economic profits
C. This situation does not affect this inequality - ANSB. Accounting profits < Economic profits
For a typical corporate bond, what changes when the market price of the bond changes (mark
all that apply)?
A. The maturity.
B. The principal.
C. The market yield.
D. The interest payments. - ANSC. The market yield.
The most recent auction price of new 1-year T-bills implied an annual yield closest to:
A. 0.1%
B. 0.3%
C. 0.5%
D. 1%
E. 1.5%
F. 2% - ANSA. 0.1%
, The yield curve for U.S. Treasury debt ______ currently inverted, and this ______ the usual
pattern.
A. Is; is.
B. Is; is not.
C. Is not; is.
D. Is not; is not. - ANSC. Is not; is.
An inverted yield curve is generally interpreted as a ______ sign for future economic growth.
A. Positive.
B. Negative.
C. Neutral. - ANSB. Negative.
Which of the following bonds currently offers the highest yield?
A. 10-year Treasury
B. 10-year grade A municipal
C. 10-year grade A-AAA corporate
D. 20-year Treasury
E. 20-year grade A municipal
F. 20-year grade A-AAA corporate - ANSF. 20-year grade A-AAA corporate
Compared to corporate bonds, municipal bonds of similar rating generally (mark all that apply)
A. Are safer.
B. Are more liquid.
C. Pay higher interest.
D. Receive more favorable tax treatment. - ANSA. Are safer.
D. Receive more favorable tax treatment.
If the auction price of a 1-year $1,000 U.S. Treasury bill implies a yield of 8%, then the auction
price is closest to:
A. $920
B. $922
C. $924
D. $926
E. $928
F. $930 - ANSD. $926
Lower rates of return are generally associated with assets that are (mark all that apply):
A. Risky.
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