Fin 301 - Study guides, Class notes & Summaries

Which of the following is an example of asset allocation? A. A. Choosing how much to invest in energy companies vs. utility companies B. Choosing how much to invest in stocks vs. bonds C. Choosing how much to invest in Apple vs. Microsoft D. None of the above - Answer-B True or False: Beta and expected return are not related at all. True False - Answer-False Believers of behavioral finance principles do believe that A. Markets are not always efficient B. Rational expectation...

©THEBRIGHT 2025 ALL RIGHTS RESERVED 11:11AM. 1 FIN 301 Exam Questions And Answers 2025 Update. Capital budgeting - Answerthe process of planning and managing a firm's long-term investments capital structure - Answerthe specific mixture of long-term debt and equity the firm uses to finance its operations -how much should the firm borrow? -what are the least expensive sources of funds for the firm? working capital - Answera firm's short-term assets and liabilities sole proprietor...

Two main measures for Cost of Debt Capital for entities - Answer-1. Pre-tax - does not include effect in Income Statement (Does not include Tax Shield effect) 2. (Real world) Post-tax - includes effect on Income Statement. (Includes Tax Shield effect) rD, Post-tax - Answer-(1-Trate)*rD, pretax trate= Taxrate Due to the tax shield effect CAPM Assumptions - Answer-- Can't beat the market (Perfect Market) - Riskier projects require higher expected value payoffs (Risk averse investo...

Which of the following statements is CORRECT, assuming positive interest rates and holding other things constant? A 30-year, $150,000 amortized mortgage will have larger monthly payments than an otherwise similar 20-year mortgage. A bank loan's nominal interest rate will always be equal to or greater than its effective annual rate. If an investment pays 10% interest, compounded quarterly, its effective annual rate will be greater than 10%. Banks A and B offer the same nominal annual...

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 ...

capital budgeting - Answer-the process of planning and managing a firm's long-term investments capital structure - Answer-the specific mixture of long-term debt and equity the firm uses to finance its operations -how much should the firm borrow? -what are the least expensive sources of funds for the firm? working capital - Answer-a firm's short-term assets and liabilities sole proprietorship - Answer-a business owned by a single individual 3 areas of corporate financial managem...

KIN 3010 Final Exam Study Guide questions with verified answers

The process of finding the future value of dollar is called discounting. - Answer-False 1. The process of finding the future value of a dollar is called compounding. True False - Answer-True 1. For a series of equal flows over equal periods of time, those flows are called annuities. True False - Answer-True 1. When a series of equal flows over equal periods of time occur at the end of each of the periods, the annuity is called an ordinary annuity. True False - Answer-True 1....

Beta is used in the capital asset model primarily as a measure of - Answer-Risk According to the principles of finance, what should be management's goal when making corporate decisions? - Answer-Maximizing Shareholder Value The basic principles of finance dictate that in the short-run, stock prices are driven by - Answer-Supply & Demand All else equal, which of the following stocks should have the highest expected return? Stock A: Standard Deviation - 15% Stock B: Standard Deviat...

In CAPM, the expected return on a stock is directly related to its _____? A. Alpha B. Beta C. Interest Rate D. WACC E. All of the above - Answer-B Which of the following is true about bonds? A. The longer the maturity of the bond, the higher the interest rate risk B. There is a positive relationship between market interest rate movements and bond prices C. The lower the default risk on the bond, the higher the yield of the bond D. A decrease in market interest rate will decrea...