FIN 470 Final Exam ACTUAL Questions and CORRECT Answers
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Course
FIN 470
Institution
FIN 470
FIN 470 Final Exam ACTUAL Questions
and CORRECT Answers
Investment Bankers - CORRECT ANSWER- Specialize in helping companies raise
capital by selling securities
Land, machines, and knowledge - CORRECT ANSWER- Are real assets
Secondary - CORRECT ANSWER- Investors trade previously issued secur...
FIN 470 Final Exam ACTUAL Questions
and CORRECT Answers
Investment Bankers - CORRECT ANSWER✔✔- Specialize in helping companies raise
capital by selling securities
Land, machines, and knowledge - CORRECT ANSWER✔✔- Are real assets
Secondary - CORRECT ANSWER✔✔- Investors trade previously issued securities in the
________ market(s)
Agency Problem - CORRECT ANSWER✔✔- The ____________ refers to the potential
conflict between management and shareholders
TED Spread - CORRECT ANSWER✔✔- The spread between the LIBOR and the Treasury-
bill rate is called the
Glass-Stegall - CORRECT ANSWER✔✔- Until 1999, the ________ Act(s) prohibited banks
in the United States from both accepting deposits and underwriting securities
Financial - CORRECT ANSWER✔✔- Commercial banks differ from other businesses in that
both their assets and their liabilities are mostly
A call option on Intel stock and a commodity futures contract. - CORRECT ANSWER✔✔-
An example of a derivative security is
The product has reached full potential, profit margins are narrower, and producers are forced
to compete on price to a greater extent - CORRECT ANSWER✔✔- In the maturity stage of
the industry life cycle,
It is difficult to predict which firms will succeed and which firms will fail, and industry
growth is very rapid - CORRECT ANSWER✔✔- In the start-up stage of the industry life
cycle,
, Fundamental Analysis - CORRECT ANSWER✔✔- The process of estimating the dividends
and earnings that can be expected from the firm based on determinants of value is called
The automobile industry - CORRECT ANSWER✔✔- An example of a highly cyclical
industry is
Threat of entry and rivalry between existing competitors. - CORRECT ANSWER✔✔- A
variety of factors relating to industry structure affect the performance of the firm, including
expanding; ample - CORRECT ANSWER✔✔- A rapidly growing GDP indicates a(n) ______
economy with ______ opportunity for a firm to increase sales
stagnant or shrinking; little - CORRECT ANSWER✔✔- A declining GDP indicates a(n)
______ economy with ______ opportunity for a firm to increase sales
Smaller decreases in profits than firms with high operating leverage - CORRECT
ANSWER✔✔- If the economy is shrinking, firms with low operating leverage will
experience
Consolidation stage - CORRECT ANSWER✔✔- The life cycle stage in which industry
leaders are likely to emerge is the
high risk and rapid growth - CORRECT ANSWER✔✔- A firm in the early stages of the
industry life cycle will likely have
Liquidation value per share - CORRECT ANSWER✔✔- _______ is the amount of money
per common share that could be realized by breaking up the firm, selling the assets, repaying
the debt, and distributing the remainder to shareholders
Retention rate or plowback ratio - CORRECT ANSWER✔✔- The _________ is the fraction
of earnings reinvested in the firm
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