FIN 550 Final Exam Solution All Possible Questions | Strayer University
- strayer university / FIN 550
- 18 Mar 2019
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FIN 550 Final Exam Solution All Possible Questions | Strayer University
FIN 550 Final Exam Solution All Possible Questions
Question 1
The five major classes of ratios include the following, except
• Question 2
Which of the following statements regarding financial risk and business risk is true?
• Question 3
Which of the following is not a flow ratio?
• Question 4
Which of the following ratios is not a measurement of the firm’s liquidity?
• Question 5
A common-size income statement expresses all income statement items
• Question 6
The growth rate of equity earnings without external financing is equal to
• Question 7
The most appropriate discount rate to use when applying the Operating Free Cash Flows model is the firm’s
• Question 8
All of the following are ways in which a firm can increase its growth rate of equity earnings without any external financing except
• Question 9
Which of the following is an underlying assumption of the constant growth dividend discount model (DDM)?
• Question 10
Dividend growth is a function of
• Question 11
The dividend payout ratio for the aggregate market is 65 percent, the required rate of return is 13 percent, and the expected growth rate for dividends is 8 percent. Compute the current earnings multiple.
• Question 12
The correlation of stock market returns between the U.S. and Japan is ____ and ____.
• Question 13
Which of the following economic series are included in the NBER lagging indicator series?
• Question 14
The growth rate will most likely increase if the:
• Question 15
If, for the S&P Industrials Index, the profit margin was .25 and the equity turnover ratio was 12, the ROE would be:
• Question 16
At what stage in the industrial life cycle is there an influx of competition?
• Question 17
To estimate earnings per share an analyst will start by estimating
• Question 18
During a recession,
• Question 19
In which industrial life cycle stage do sales correlate highly with an economic series or the economy in general?
• Question 20
Which of the following is not characteristic of the “decline” phase of the industry life cycle?
• Question 21
A speculative stock possesses a ____ probability of ____ return and is currently ____.
• Question 22
Which of the following is not considered when looking at free cash flow to equity technique?
• Question 23
Under the present value of operating free cash flow technique, the firm’s operating free cash flow to the firm is discounted at the firm’s
• Question 24
In Berkshire Hathaway annual reports Warren Buffett highlights financial tenets that he believes are important. Which of the following is not a financial tenet of Warren Buffett?
• Question 25
Which of the following statements concerning SWOT analysis is false?
FIN 550 Final Exam Part 2
• Question 1
A stock currently sells for $75 per share. A put option on the stock with an exercise price $70 currently sells for $0.50. The put option is
• Question 2
Which of the following is consistent with put-call-spot parity?
• Question 3
An advantage of a forward contract over a futures contract is that
• Question 4
The cost of carry includes all of the following except
• Question 5
A call option in which the stock price is higher than the exercise price is said to be
• Question 6
The basis (Bt,T) at time t between the spot price (St) and a futures contract expiring at time T (Ft,T) is
• Question 7
The bond that maximizes the difference between the invoice price and the delivery price is referred to as the
• Question 8
An investor who wants a long position in a ____ must first place the order with a broker, who then passes it on to the trading pit or electronic network. Details of the order are then passed on to the exchange clearinghouse.
• Question 9
When F0,T > E(ST) it is known as
• Question 10
According to the cost of carry model the relationship between the spot (S0) and futures price (F0,T) is
• Question 11
A vertical spread involves buying and selling call options in the same stock with
• Question 12
In a money spread, an investor would
• Question 13
In the Black-Scholes option pricing model, an increase in time to expiration (T) will cause
• Question 14
The Black-Scholes model assumes that stock price movements can be described by
• Question 15
Which of the following is not a variable required to determine an option’s value in the Black-Scholes valuation model?
• Question 16
Investment companies or mutual funds that continue to sell and repurchase shares after their initial public offerings are referred to as
• Question 17
Investing in emerging markets can be viewed as a global application of
• Question 18
The Securities Act of 1933
• Question 19
Which of the following are guiding principles for ethical behavior in the asset management industry as put forward by the CFA Center for Financial Market Integrity?
• Question 20
An investment vehicle that acts like a mutual fund of hedge funds, and allows investors access to managers that might otherwise be unavailable is known as