Essay on Fin-550 Final Exam Answers

849 Words Jun 11th, 2015 4 Pages
FIN-550 Final Exam Answers

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
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• 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

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