单选题Which of the following government actions would lead to an increase in aggregate demand?
(1) Increasing taxation and keeping government expenditure the same
(2) Decreasing taxation and increasing government expenditure
(3) Decreasing money supply
(4) Decreasing interest rates
单选题Which of the following statements are correct?
(1)The sensitivity of a project variable can be calculated by dividing the project net present value by the present value of the cash flows relating to that project variable
(2)The expected net present value is the value expected to occur if an investment project with several possible outcomes is undertaken once
(3)The discounted payback period is the time taken for the cumulative net present value to change from negative to positive
单选题Which of the following statements are correct?
(1)Interest rate options allow the buyer to take advantage of favourable interest rate movements
(2)A forward rate agreement does not allow a borrower to benefit from a decrease in interest rates
(3)Borrowers hedging against an interest rate increase will buy interest rate futures now and sell them at a future date
单选题Which of the following statements is/are correct?
1 An increase in the cost of equity leads to a fall in share price
2 Investors faced with increased risk will expect increased return as compensation
3 The cost of debt is usually lower than the cost of preference shares
单选题Which of the following statements are correct?
(1)If a capital market is weak form efficient, an investor cannot make abnormal returns by using technical analysis
(2)Operational efficiency means that efficient capital markets direct funds to their most productive use
(3)Tests for semi-strong form efficiency focus on the speed and accuracy of share price responses to the arrival of new information
单选题Drumlin Co has $5m of $0
单选题Peach Cos latest results are as follows:
$000
Profit before interest and taxation 2,500
Profit before taxation 2,250
Profit after tax 1,400
In addition, extracts from its latest statement of financial position are as follows:
$000
Equity 10,000
Non-current liabilities 2,500
What is Peach Cos return on capital employed (ROCE)?
单选题Which of the following statements concerning profit are correct?
1 Accounting profit is not the same as economic profit
2 Profit takes account of risk
3 Accounting profit can be manipulated by managers
单选题Andrew Co is a large listed company financed by both equity and debt
单选题The owners of a private company wish to dispose of their entire investment in the company
单选题In relation to an operating lease, which of the following statements is correct?
单选题Which of the following statements are correct?
(1)Capital market securities are assets for the seller but liabilities for the buyer
(2)Financial markets can be classified into exchange and over-the-counter markets
(3)A secondary market is where securities are bought and sold by investors
单选题Which of the following are descriptions of basis risk?
(1) It is the difference between the spot exchange rate and currency futures exchange rate
(2) It is the possibility that the movements in the currency futures price and spot price will be different
(3) It is the difference between fixed and floating interest rates
(4) It is one of the reasons for an imperfect currency futures hedge
单选题Pop Co is switching from using mainly long-term fixed rate finance to fund its working capital to using mainly short-term variable rate finance
单选题In relation to an irredeemable security paying a fixed rate of interest, which of the following statements is correct?
单选题Acompanywhosehomecurrencyisthedollar($)expectstoreceive500,000pesosinsixmonths’timefromacustomerinaforeigncountry.Thefollowinginterestratesandexchangeratesareavailabletothecompany:Workingtothenearest$100,whatisthesix-monthdollarvalueoftheexpectedreceiptusingamoney-markethedge?
单选题An investor plans to exchange $1,000 into euros now, invest the resulting euros for 12 months, and then exchange the euros back into dollars at the end of the 12-month period. The spot exchange rate is €1·415 per $1 and the eurointerest rate is 2% per year. The dollar interest rate is 1·8% per year.
Compared to making a dollar investment for 12 months, at what 12-month forward exchange rate will the investormake neither a loss nor a gain?
单选题On a market value basis, GFV Co is financed 70% by equity and 30% by debt. The company has an after-tax cost of debt of 6% and an equity beta of 1·2. The risk-free rate of return is 4% and the equity risk premium is 5%.
What is the after-tax weighted average cost of capital of GFV Co?
单选题The following scenario relates to questions 16 to 20
单选题Country X uses the dollar as its currency and country Y uses the dinar