A primary financial market is one that: A. offers financial assets with the highest expected return B. offers the greatest number of financial assets C. offers financial assets with the highest historical return D. involves the sale of financial assets for the first time
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- 25- The minimum rate of return a firm must earn on its assets to maintain the currentvalue of its securities is represented by which of the following? a. Cost of equityb. Pretax cost of debt c. After-tax cost of debtd. Weighted average cost of capitale. Weighted average cost of preferred and common stock22. A qualitative factor (as opposed to a quantitative factor) that managment should consider when evaluating alternative capital investments would be Group of answer choices estimated costs The corporate strategy projected net cash flows economic returns and IRRAccording to Wald's criterion, which investment is decided by looking at the profitability of three investments such as S1, S2 and S3 in the following economic environments? Economic Conditions S1 S2 S3 Vivid Economic Situation 13 6 7 Normal Economic Condition 10 9 8 Stagnant Economic Condition 7 14 4 Recession Condition 8 7 15
- Select 2–3 of the topics below and discuss how they each influence financial decisions regarding risk and return: The capital asset pricing model (CAPM) The constant–growth model Compute forward-looking expected return and risk Risk premiums19- Which of the following considers both time value and risk factor of the business concern? a. Profit Maximization b. Sales Maximization c. Wealth Maximization d. Asset Maximization13. Both real and financial assets have four principal attributes that are significant factors in the investment decision process. These are: I. liquidity II. capital gain III. risk IV. return or yield V. time pattern of future cash flows VI. price and cash flow volatility A. I, III, IV, V B. I, II, III, IV C. I, III, IV, VI D. II, III, IV, V 14. Given an 10% rate of return, the amount that must be put into an investment account of Kabul Bank at the end of each of the next 18 years in order to accumulate $90,000 to pay for a child's education is closest to: A. $1,642. B. $1,973. C. $2,635.
- 2. Future value The principal of the time value of money is probably the single most important concept in financial management. One of the most frequently encountered applications involves the calculation of a future value. The process for converting present values into future values is called . This process requires knowledge of the values of three of four time-value-of-money variables. Which of the following is not one of these variables? The interest rate (I) that could be earned by deposited funds The trend between the present and future values of an investment The duration of the deposit (N) The present value (PV) of the amount deposited All other things being equal, the numerical difference between a present and a future value corresponds to the amount of interest earned during the deposit or investment period. Each line on the following graph corresponds to an interest rate: 0%, 9%, or 17%. Identify the interest rate that corresponds…Q6. Investment is an asset acquired or invested in to build wealth and save money from the hard earned income. Investment is primarily made to obtain an additional source of income or gain profit from the investment over a specific period of time.Some investor look for a long period according to their needs but some focus on short term period. For this purpose two types of analysises are important. One analysis attempts to calculate the intrinsic value of a stock using data such as revenue, expenses and growth prospective and another analysis uses best market activities, stock price trends and past data to predict activities in future. a.What is the difference in both analyses? b.Which analysis is useful for long term investor and financial advisors? Give the reasons with examples.Buying assets that yield a return greater than the minimum acceptable hurdle rate is a part of which core principles of Finance. a. Financing principle b. Investment principle c. Dividend principle d. Cost principle
- 29.Which of the following statements about liquidity and solvency ratios is/are true?Statement I. The current ratio expresses the capability of a firm's current assets to cover its current liabilities without resorting to selling its long-term assets to cover its current obligations.Statement II. A higher debt to equity ratio means that the financing aspect of the business comes more from its debtors than from its equity holders.Statement III. In computing for the quick ratio, highly liquid assets such as marketable securities should be excluded from the numerator.Statement IV. Solvency refers to how quick, efficient, and cheap it is to convert a security into cash. a. I only b. I and II c. I and III d. I and IVRespond to the following in a minimum of 175 words: Select 2–3 of the topics below and discuss how they each influence financial decisions regarding risk and return: The capital asset pricing model (CAPM) The constant–growth model Compute forward-looking expected return and risk Risk premiumswhich one is correct please confirm? QUESTION 25 The percentage of sales forecasting method is used by management to forecast the amount of _____________. a. debt financing needed b. profit expected for a given percentage increase in sales c. cash needed to finance future sales growth d. capital financing needed to promote marketing efforts