Answer:
b. depreciate against the U.S. dollar.
Question: The cost of capital may be different for a foreign project than for an equivalent domestic project because foreign projects may be more or less risky. a. True b. False
Answer:
a. True
Question: You are considering two equally risky annuities, each of which pays $5,000 per year for 10 years. Investment ORD is an ordinary (or deferred) annuity, while Investment DUE is an annuity due. Which of the following statements is CORRECT?
Answer Options:
a. The present value of ORD must exceed the present value of DUE, but the future value of ORD may be less than the future value of DUE.
b. The present value of DUE exceeds the present value of ORD, while the future value of DUE is less than the future value of ORD.
c. The present value of ORD exceeds the present value of DUE, and the future value of ORD also exceeds the future value of DUE.
d. The present value of DUE exceeds the present value of ORD, and the future value of DUE also exceeds the future value of ORD.
e. If the going rate of interest decreases from 10% to 0%, the difference between the present value of ORD and the present value of DUE would remain constant.
Answer:
b
Question: As a result of compounding, the effective annual rate on a bank deposit (or a loan) is always equal to or greater than the nominal rate on the deposit (or loan). True False
Answer:
True
Question: Legal and economic differences among countries, although important, do NOT pose significant problems for most multinational corporations when they coordinate and control worldwide operations and subsidiaries. a. True b. False
Answer:
b. False
Question: The nursing care plan for a patient diagnosed with anorexia nervosa includes the intervention “Monitor for complications of refeeding.” Which body system should a nurse closely monitor for dysfunction? a. Renal b. Endocrine c. Central nervous d. Cardiovascular
Answer Options:
a. Renal
b. Endocrine
c. Central nervous
d. Cardiovascular
Answer:
D
Question: The cash flows relevant in a foreign investment should, from the parent company’s perspective, include the financial cash flows that the subsidiary can legally send back to the parent company plus the cash flows that must remain in the foreign country. a. True b. False
Answer:
a. True
Question: Which of the following statements regarding a 15-year (180-month) $125,000, fixed-rate mortgage is CORRECT? (Ignore taxes and transactions costs.) a. The remaining balance after three years will be $125,000 less one third of the interest paid during the first three years. b. Because it is a fixed-rate mortgage, the monthly loan payments (which include both interest and principal payments) are constant. c. Interest payments on the mortgage will increase steadily over time, but the total amount of each payment will remain constant. d. The proportion of the monthly payment that goes towards repayment of principal will be lower 10 years from now than it will be the first year. e. The outstanding balance declines at a slower rate in the later years of the loan’s life.
Answer:
b. Because it is a fixed-rate mortgage, the monthly loan payments (which include both interest and principal payments) are constant.
Question: Time lines can be constructed in situations where some of the cash flows occur annually but others occur quarterly. True False
Answer:
True
Question: If a bank compounds savings accounts quarterly, the effective annual rate will exceed the nominal rate. True False
Answer:
True
Question: Which of the following statements is CORRECT? a. A time line is not meaningful unless all cash flows occur annually. b. Time lines are not useful for visualizing complex problems prior to doing actual calculations. c. Time lines cannot be constructed in situations where some of the cash flows occur annually but others occur quarterly. d. Time lines can be constructed for annuities where the payments occur at either the beginning or the end of the periods. e. Some of the cash flows shown on a time line can be in the form of annuity payments, but none can be uneven amounts.
Answer:
d. Time lines can be constructed for annuities where the payments occur at either the beginning or the end of the periods.
Question: A psychiatric clinical nurse specialist uses cognitive therapy techniques with a patient diagnosed with anorexia nervosa. Which statement by the staff nurse supports this type of therapy? a. “What are your feelings about not eating the food that you prepare?” b. “You seem to feel much better about yourself when you eat something.” c. “It must be difficult to talk about private matters to someone you just met.” d. “Being thin does not seem to solve your problems. You are thinner now but still unhappy.”
Answer Options:
a. “What are your feelings about not eating the food that you prepare?”
b. “You seem to feel much better about yourself when you eat something.”
c. “It must be difficult to talk about private matters to someone you just met.”
d. “Being thin does not seem to solve your problems. You are thinner now but still unhappy.”
Answer:
D
Question: A time line is meaningful even if all cash flows do not occur annually. True False
Answer:
True
Question: A Eurodollar is a U.S. dollar deposited in a bank outside the United States. a. True b. False
Answer:
a. True
Question: In Japan, 90-day securities have a 4% annualized return and 180-day securities have a 5% annualized return. In the United States, 90-day securities have a 4% annualized return and 180-day securities have an annualized return of 4.5%. All securities are of equal risk, and Japanese securities are denominated in terms of the Japanese yen. Assuming that interest rate parity holds in all markets, which of the following statements is most CORRECT? a. The yen-dollar spot exchange rate equals the yen-dollar exchange rate in the 90-day forward market. b. The yen-dollar spot exchange rate equals the yen-dollar exchange rate in the 180-day forward market. c. The yen-dollar exchange rate in the 90-day forward market equals the yen-dollar exchange rate in the 180-day forward market. d. The yen-dollar exchange rate in the 180-day forward market equals the yen-dollar exchange rate in the 90-day spot market. e. The relationship between spot and forward interest rates cannot be inferred.
Answer:
e. The relationship between spot and forward interest rates cannot be inferred.
Question: While providing health teaching for a patient diagnosed with bulimia nervosa, what information should a nurse emphasize? a. Self-monitoring of daily food and fluid intake. b. Establishing the desired body weight gain. c. Recognizing symptoms of hypokalemia. d. Self-esteem maintenance.
Answer Options:
a. Self-monitoring of daily food and fluid intake.
b. Establishing the desired body weight gain.
c. Recognizing symptoms of hypokalemia.
d. Self-esteem maintenance.
Answer:
C
Question: Multinational financial management requires that a. the effects of changing currency values be included in financial analyses. b. legal and economic differences need not be considered in financial decisions because these differences are insignificant. c. political risk should be excluded from multinational corporate financial analyses. d. traditional U.S. and European financial models incorporating the existence of a competitive marketplace not be recast when analyzing projects in other parts of the world. e. cultural differences need not be accounted for when considering firm goals and employee management.
Answer:
a. the effects of changing currency values be included in financial analyses.
Question: When the value of the U.S. dollar appreciates against another country’s currency, we may purchase more of the foreign currency with the U.S. dollar. a. True b. False
Answer:
a. True
Question: You are considering two equally risky annuities, each of which pays $5,000 per year for 10 years. Investment ORD is an ordinary (or deferred) annuity, while Investment DUE is an annuity due. Which of the following statements is CORRECT?
Answer Options:
a. A rational investor would be willing to pay more for DUE than for ORD, so their market prices should differ.
b. The present value of DUE exceeds the present value of ORD, while the future value of DUE is less than the future value of ORD.
c. The present value of ORD exceeds the present value of DUE, and the future value of ORD also exceeds the future value of DUE.
d. The present value of ORD exceeds the present value of DUE, while the future value of DUE exceeds the future value of ORD.
e. If the going rate of interest decreases from 10% to 0%, the difference between the present value of ORD and the present value of DUE would remain constant.
Answer:
a
Question: If the discount (or interest) rate is positive, the present value of an expected series of payments will always exceed the future value of the same series. True False
Answer:
False
Question: The NYSE is defined as a “spot” market purely and simply because it has a physical location. The NASDAQ, on the other hand, is not a spot market because it has no one central location.
Answer Options:
a. True
b. False
Answer:
b. False