单选题A company purchased a new pizza oven directly from Italy for $ 12675. It will work for 5 years and has no salvage value. The tax rate is 41 percent, and annual revenues are constant at $ 7192. For financial reporting, the straight-line depreciation method is used, but for tax purposes depreciation is accelerated to 35 percent in years 1 and 2, and 30 percent in year 3. For purposes of this exercise ignore all expenses other than depreciation. Assume the tax rate for years 4 and 5 changed from 41 percent to 31 percent. What will be the deferred tax liability as of the end of year 3 and the resulting adjustment to net income in year 3 for financial reporting purposes due to the change in the tax rate? Deferred Tax Liability Net Income ①A. $1572 $ 507 ②B. $1572 $ 747 ③C. $1039 $ 5O7

单选题Which of the following statements most accurately describes the best execution when a portfolio manager services his or her clients? A. The portfolio manager chooses the broker providing the lowest commission in order to obtain a higher net return. B. The portfolio manager maximizes the value of the client's portfolio within its investment policy statement. C. The portfolio manager obtains the best investment research through soft dollar arrangement.

单选题Which of the following relationships most accurately describes the inefficiency resulting from government imposed production quotas? A. Marginal benefit exceeds marginal cost leading to underproduction. B. Marginal benefit exceeds marginal cost leading to overproduction. C. Marginal cost exceeds marginal benefit leading to overproduction.

单选题A return-generating model that provides an estimate of the expected return of a security based on factors such as earnings growth and cash flow generation is best described as a:

单选题Which of the following statements is most accurate, assuming stable inventory quantities? In a period of: A. falling prices, FIFO results in higher COGS and higher taxes. B. rising prices, LIFO results in higher cash flows and higher net income. C. rising prices, FIFO results in higher taxes, lower cash flows and higher working capital while LIFO results in higher COGS and lower inventory balances.

单选题Total investment is one of the components of a country's GDP. Which of the following is least likely to be considered a source of funds for investment? A. National savings. B. Foreign borrowing. C. Household expenditures.

单选题For an option-free bond, what are the effects of the convexity adjustment on the magnitude (absolute value) of the approximate bond price change in response to an increase in yield and in response to a decrease in yield, respectively? Decrease in yield Increase in yield A. Increase in magnitude Decrease in magnitude B. Increase in magnitude Increase in magnitude C. Decrease in magnitude Decrease in magnitude

单选题An investor writes a covered call on a $40 stock with an exercise price of $50 for a premium of $2. The investor's maximum: A. gain will be $12. B. gain will be $2. C. loss will be $40.

单选题A Treasury bond due in one-year has a yield of 8.5 percent. A Treasury bond due in 5 years has a yield of 9.3 percent. A bond issued by General Motors due in 5 years has a yield of 9.9 percent. A bond issued by Exxon due in one year has a yield of 9.4 percent. The default risk premiums on the bonds issued by Exxon and General Motors are: Exxon General Motors ①A. 0.1% 0.6% ②B. 0.1% 1.4% ③C. 0.9% 0.6%

单选题On 31 December 2003, Zapp Company executed a 12-year lease with annual payments of $ 900000 beginning 31 December 2004, for factory equipment. The economic life of the equipment was 18 years. The interest rate implicit in the lease was eight percent. Zapp' s incremental borrowing rate was 11 percent. Zapp may purchase the equipment at the end of the lease at the then-current fair market value of the equipment. The fair market value of the equipment at the inception of the lease was $ 8000000. Zapp' s Income Statement for the year ended 31 December 2004, is as follows (note that this statement is prepared under the assumption that the factory equipment lease was a capital lease) : Sales $ 22000000 Cost of Goods Sold {{U}}( 9000000 ){{/U}} Gross Profit 13000000 Depreciation on Lease (565206) Other Depreciation ( 2900000 ) Sales and Administration {{U}}(2600000){{/U}} Operating Profit 6934.794 lnterest Expense on Lease (542838) Other Interest Expense ( 1900000 ) Income Taxes {{U}}( 2000000 ){{/U}} Net Income $ 2491956 After considering whether the factory equipment lease should be reclassified as an operating lease and holding income taxes constant at $ 2000000, Zapp' s net profit margin will: A. decrease from 11.33 percent to 9.67 percent. B. increase from 11.33 percent to 15.42 percent. C. increase from 11.33 percent to 12.27 percent.

单选题XYZ company has entered into a "plain-vanilla" interest rate swap on $1000000 notional principal. XYZ company pays a fixed rate of 8 percent on payments that occur at 90-day intervals. Six payments remain with the next one due in exactly 90 days. On the other side of the swap, XYZ company receives payments based on the LIBOR rate. Describe the transaction between XYZ company and the dealer at the end of the fourth period if the appropriate LIBOR rate is 9.2 percent.

单选题An analyst does research about common probability distributions. Compared to a normal distribution, a return distribution with negative excess kurtosis most likely has : A. more extreme outcomes. B. less observations clustered around the mean. C. a longer tail on the left side than on the right side.

单选题In countries where new local laws relating to calculation and presentation of investment performance conflict with GIPS standards, firms who have claimed GIPS compliance should most likely:

单选题A defensive stock is best characterized as:

单选题Assume that the exercise price of an option is $11, and the average market price of the stock is $16. Assuming 1039 options are outstanding during the entire year, what is the number of shares to be added to the denominator of the Diluted EPS?

单选题U.S. GAAP requires that costs incurred in establishing the technological feasibility of software be:

单选题An investor gathers the following data to estimate the intrinsic value of a companys stock using the justified forward price-to-earnings ratio (P/E) approach

单选题A company, which prepares its financial statements according to IFRS, owns several investment properties on which it earns rental income

单选题When determining credit risk spread, the benchmark security is most likely a(n):

单选题A financial contract offers to pay (:1,200 per month for five years with the first payment made immediately