单选题If the threshold return is higher than the risk -free rate, what will be the relationship between Roy's safety -first ratio (SF) and Sharpe's ratio?
单选题An analyst does research about duration. If the interest rate falls by 25 basis points, the price of a bond will be $106.5, and if interest rate rises by 25 basis points, the price of the bond will be $98.8. If the current price of the bond is $101.2, the duration is closest to: A. 7.61 B. 15.22 C. 30.44
单选题Which of the following statements regarding the internal rate of return (IRR) is most accurate? The IRR: A. assumes that the reinvestment rate of the cash flows is the cost of capital. B. ignores the time value of money. C. and the net present value (NPV) method lead to the same accept/reject decision for independent projects.
单选题The Chief Financial Officer of Large Closeouts Inc. (LCI) determines that the firm must engage in capital rationing for its capital budgeting projects. Which of the following describes the most likely reason for LCI to use capital rationing? LCI: A. has a limited amount of funds to invest. B. would like to arrange projects so that investing in a project today provides the option to accept or reject certain future projects. C. must choose between projects that compete with one another.
单选题An analyst determined that if interest rates increase 120 basis points the price of a bond would be $89.7, but if interest rate decreases 120 basic points the price that bond would he $99.3. If the initial price of the bond is $95.4, the approximate percentage price change for a 100 basis point change in yield is closest to:
单选题When GIPS and local laws conflict, in order to be in compliance with GIPS, the investment firm must:
单选题Which of the following is frequently cited as a reason why hedge funds consistently report strong results ? A. Hedge funds utilize a superior investment methodology. B. Survivorship bias. C. Hedge funds invest in lower risk securities.
单选题Which of the following is the best description of the flow of information in an accounting system? A. Journal entries, general ledger, trial balance, financial statements. B. General ledger, trial balance, general journal, financial statements. C. Financial statements, general ledger, trial balance, general journal.
单选题An analyst does research about security market indices. Which of the following indices is most likely subject to survivorship bias? A. Fixed-income indices. B. Hedge fund index. C. Real estate investment trust index.
单选题All of the following are factors that can cause shifts in the demand
curve for a resource EXCEPT:
A. an increase in the supply of the resource.
B. an increase in the resource's productivity.
C. a decrease in the prices of other resources.
单选题Which of the following statements about the demand and supply of money is most accurate? People who are: A. buying bonds to reduce their money balances will increase the demand for bonds with an associated increase in interest rates. B. selling bonds to increase their money balances will reduce the demand for bonds with an associated reduction in interest rates. C. holding money when interest rates are higher will try to reduce their money balances and, as a result, the demand for money decreases.
单选题With respect to regulating a natural monopoly, which of the following pricing rules to regulate the natural monopoly firm will most likely require the government to provide a subsidy sufficient to compensate the firm in order to avoid the firm to leave the market? A. Average cost pricing. B. Marginal cost pricing. C. Profit maximizing pricing.
单选题Robinson Company had 1 million shares outstanding at the beginning of the year
单选题A LIFO liquidation will most likely result an increase in:
单选题Which of the following statements about forward and future contracts is FALSE? A. A future requires the contract purchaser to receive delivery of the good at a specified time. B. The future value of a financial derivative depends on the value of its underlying asset. C. The primary difference between forwards and futures is that only futures are considered financial derivatives.
单选题A company will have better liquidity than its peer group of companies if its:
单选题Thefollowingdataapplytoacountryinitsdomesticcurrencyunits:Usingtheexpendituresapproach,thecountrysgrossdomesticproduct(GDP)isclosestto:
单选题An analyst does research about the difference between International Financial Reporting Standards (IFRS) and U. S. generally accepted accounting principles (GAAP). With respect to the classification of interests received on the statement of cash flows, U. S. GAAP is: A. less flexible than IFRS. B. equally flexible as IFRS. C. more flexible than IFRS.
单选题Helmut Humm, manager at a large U. S. firm, has just been assigned to
the capital budgeting area to replace a person who left suddenly. One of Humm's
first tasks is to calculate the company's weighted average cost of capital
(WACC). Humm finds clear notes on the target capital component weights.
Unfortunately, all he can find for the cost of capital components is some
handwritten notes. He can make out the numbers, but not the corresponding
capital component. So, he has to guess. Here is what Humm deciphered:
Target weights : wd = 30% , wps = 20% ,
wce= 50% , where wd, wps, and wce
are the weights used for debt, preferred stock, and common equity.
Cost of components (in no particular order) : 6.0% , 15.0% , and
8.5%. The cost of debt is the after-tax cost.
If Humm guesses correctly, the WACC is:
A. 9.2%.
B. 11.0%.
C. 9.0%.
单选题On a flight to Europe, Romy Haas, CFA, strikes up a conversation with a fellow passenger, Vincent Trujillo