BU34S : Managerial Finance I
Question 1
Bonds are bought and sold in __________ markets.
equity
debt
derivatives
foreign exchange
Question 2
The fundamental starting point of all the accounting statements is the __________ identity.
accounting
computing
investing
financing
Question 3
You need $32,000 at the end of 6 years. If you can earn 0.625% per month, how much would you need to invest today to meet your objective?
$17,600
$18,319
$20,735
$20,433
Question 4
The future value three years from today of a $100 three-year annuity due compounded at a rate of 10% is equal to:
$300.00.
$331.00.
$364.10.
$133.10.
Question 5
What type of loan requires both principal and interest payments as you go by making equal payments each period?
Amortized loan
Interest-only loan
Discount loan
Compound loan
Question 6
To determine the interest paid each compounding period, we take the advertised annual percentage rate and simply divide it by the __________ to get the appropriate periodic interest rate.
number of compounding periods for the length of an investment
number of discounting periods for the length of an investment
number of compounding periods per year
number of compounding periods per month
Question 7
The __________ is the face value of the bond.
current yield
maturity date
par value
coupon rate
Question 8
A basis point is:
one-thousandth of a percentage point.
one percentage point.
one-tenth of a percentage point.
one-hundredth of a percentage point.
Question 9
Bonds are different from stocks because:
bonds promise fixed payments for the length of their maturity.
bonds give payments only after other owners are paid.
bonds do not have maturity dates.
bonds promise growth in earnings.
Question 10
Robert invested in stock and received a positive return over a 9-month period. Which of the following types of returns will be greater?
Holding period return (HPR)
Effective annual return
Annual percentage rate
There is not enough information to make a definitive choice.
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