Fin 401 Practice Exam

8. Gardner Knight, CFA, is a product development specialist at an investment band. Knight is responsible for creating collateralized debt obligations (CDOs) consisting of residential mortgage bonds. In the marketing brochure for his most recent CDO, Knight provided a list of the mortgage bonds that the CDO was created from. The brochure also states that "an independent third party, the collateral manger, had sole authority over the selection of all mortgage .bonds used as collateral in the CDO." However, Knight met with the collateral manager and helped her select the bonds for the CDO. Knight is least likely to be in violation of which CFA Institute Standards of

The FSR will make sure that they have a strong working knowledge on CIBC’s Personal/Business Deposit Accounts, Unsecured and Secured Credit products, investments, Insurance and all corporate mandatory regulations that correspond. This will enable you to gain confidence on your expected capabilities.

1 Write your name and student number on the top of this examination paper and on ALL answer booklets.

Part I. Each question is worth 3 points. For multiple choice questions, use highlight or bold to mark your answers.

INSTRUCTIONS 1) Write your name, student ID number and signature in the assigned space on the front page. 2) To make sure that we can identify your exam if your student

Rubric: The quiz is worth 25 points. Each selected-response question is worth 1 point. The student will receive 1 point for selecting the correct answer. Each constructed-response is worth 5 points. In order to receive all 5 points for each constructed response, the student must fulfill the criteria below. The minimum passing score is 19 out of 25

Section A: Answer all questions. Total 42 points – each question in this section carries 3.5 points. Write the responses to ALL questions in your answer sheet.

This midterm exam was completed individually by me. I did not receive nor did I give unauthorized assistance during the taking of

9. You want to purchase a business with the following cash flows. How much would you pay for this business today assuming you needed a 14% return to make this deal?

4. There are 40 multiple-choice questions on the exam. Each question is worth 2.5 points.

a) How many shares will the firm have to issue, assuming they issue the new shares at the current price per share?

(Note: retained earnings information is irrelevant here) Part b. Total market value = debt + pref. equity + Common equity = 1,147,200 + 1,250,000 + 2,500,000 = $4,897,200

Both firms are expected to generate cash flows of $50 million per year for the foreseeable future and the market value of the equity of ABC, Inc is $500 million. Estimate the return on equity of XYZ, Inc. Assume there are no taxes, and the risk-free rate is 4%. (No more than two decimals in the percentage interest rate, but do not enter the % sign.)

There are 20 multiple-choice questions, each is worth 5 points for a total of 100 points plus one extracredit question. Please, write with pen, print and staple this HW.

120 multiple choice questions in 3 hours and enter your answers using the Scantron sheet that had been provided to you. You will get 1 point for every correct answer. You will lose 0.25 points for every incorrect answer or for making multiple answers to a question. You will not get or lose any points for leaving a question blank.