Question: Which behavior is typical of social anxiety disorder? Answer Options: A – Repetitive rituals B – Fear of embarrassment in social settings C – Hallucinations D – Elevated mood Answer: B – Fear of embarrassment in social settings Question: Which statement reflects acceptance in grief? Answer Options: A – “This isn’t real.” B – […]
Question: A patient with a specific phobia of dogs begins desensitization therapy. Which action is most appropriate with this therapy? Answer Options: A – Gradually expose the patient to dogs while providing relaxation support B – Encourage the patient to avoid dogs C – Discuss the causes of the phobia in depth D – Administer […]
Question: An independent project with a profitability index of 0.94 should be: Answer Options: accepted because PI is positive accepted because PI is less than 1 rejected because PI is less than 1 rejected only if payback exceeds one year accepted if MIRR is positive Answer: C — rejected because PI is less than 1 […]
Question: Which pair of characteristics is an advantage of the payback method? Answer Options: Ease of use; liquidity bias Time value of money; objectivity Inclusion of all cash flows; ease of use Ease of use; consistency with NPV Objectivity; reinvestment assumption Answer: A — Ease of use; liquidity bias Question: Applying the discounted payback rule […]
Question: A proposed project has an initial cost of $74,200 and cash inflows of $23,900, $34,700, and $40,200 for Years 1 through 3, respectively. The required rate of return is 15.2 percent. Based on IRR, should this project be accepted? Why or why not? Answer Options: No; IRR exceeds the required return No; IRR is […]
Question: There are two distinct discount rates at which a particular project will have a zero net present value. In this situation, the project is said to: Answer Options: have two net present value profiles have operational ambiguity create a mutually exclusive investment decision produce multiple economies of scale have multiple rates of return Answer: […]
Question: Which one of the following statements is correct? Answer Options: The risk-free rate represents the change in purchasing power Any return greater than the inflation rate represents the risk premium Historical real rates of return must be positive Nominal rates exceed real rates by the amount of the risk-free rate Given a positive rate […]
Question: Which one of the following statements is correct? Answer Options: The risk-free rate represents the change in purchasing power Any return greater than the inflation rate represents the risk premium Historical real rates of return must be positive Nominal rates exceed real rates by the amount of the risk-free rate Given a positive rate […]
Question: A preferred stock will pay an annual dividend of $9.50 per share in perpetuity beginning 7 years from now. If the required return is 8.8 percent, what is the stock worth today? Answer Options: $58.33 $72.18 $65.08 $81.96 $54.44 Answer: C — $65.08 Question: If the required return on all equity securities rises, then […]
Question: A firm has an EPS of $2.56, a benchmark PE of 12.1, and an earnings growth rate of 1.9 percent. What is the target share price 4 years from now? Answer Options: $51.00 $17.57 $34.03 $33.40 $30.98 Answer: D — $33.40 Question: A firm has 38,400 shares outstanding and uses cumulative voting. The firm […]
Question: Which one of the following best describes Nasdaq? Answer Options: Largest U.S. stock market in terms of dollar trading volume Market where dealers buy at the asked price Market where the designated market makers are located at posts Computer network of securities dealers Market with three physical trading floors Answer: D — Computer network […]
Question: Firm X currently pays an annual dividend of $3.22 per share and plans on increasing that amount by 2.5 percent annually. Firm Y currently pays an annual dividend of $2.84 per share and plans on increasing its dividend by 3 percent annually. Given this information, you know for certain that the stock of Firm […]
Question: The yield on a corporate bond exceeds the yield on a comparable Treasury bond primarily because of: Answer Options: tax risk inflation risk interest rate risk credit risk exchange rate risk Answer: D — credit risk Question: A bond will sell at a discount when: Answer Options: the coupon rate exceeds the yield to […]
Question: Which one of the following relationships applies to a premium bond? Answer Options: Yield to maturity > Current yield > Coupon rate Coupon rate = Current yield = Yield to maturity Coupon rate < Yield to maturity < Current yield Coupon rate > Current yield > Yield to maturity Current yield > Coupon rate […]
Question: A firm has bonds on the market with 13 years to maturity, a YTM of 7.6 percent, and a current price of $901.98. The bonds make semiannual payments and have a face value of $1,000. What is the coupon rate? Answer Options: 6.40% 6.33% 6.60% 6.67% 6.50% Answer: A — 6.40% Question: A newly […]