FIN300 Spring 2013 Midterm #1 Study Guide General instructions: 1. This is NOT a comprehensive list of topics that may be covered on your exam. All the lecture material and everything from chapters 1-9 in your textbook (with noted exceptions) is fair game. However‚ it is probably a good idea to emphasize these topics when you study for the test. 2. Understanding the concepts is a prerequisite for succeeding in this course. 3. You should practice solving problems until you feel comfortable you can
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SG-INVESTMENTS At least 50 percent of exam-1 Will come from this study guide Chapters 1-4 Student: ___________________________________________________________________________ 1. The largest one-day percentage decline in the Dow-Jones Industrial Average during the period 1926-2006 occurred on: A. October 19‚ 1987. B. October 28‚ 1929. C. September 17‚ 2001. D. November 6‚ 1929. E. July 19‚ 2002. 2. Based on the period 1926-2006‚ the risk premium for U.S. Treasury bills was: A. 0.0
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and then holds the assets until he or she is able find a buyer. The dealer’s profit comes from buying at the bid and selling at the ask. The difference between the bid and ask is called the spread. Since all transactions are between sellers and dealers or buyers and dealers‚ the prices are set by the dealers. Active stocks will have more dealers. To compete for business‚ dealers will decrease the profit margin and therefore quote smaller (tighter) spreads. Spreads will be larger for inactively
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I. Topic 1. Introduction 1. Explain the difference b/w financial assets and real assets. Real Assets: (37%‚ 1%) Used to produce goods and services: property‚ plant & equipment‚ human capital‚ consumer durable‚ land‚ building etc (Material wealth of society: productive capacity‚ real asset) Financial Assets (debt‚ equity and derivative): Claims on real assets or claims on asset income. The largest financial asset of U.S. households is: pension reserve (real assets generate net income to the
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efficiency Such as metrics such as ROA which according to Duponts analysis is composed of Asset turnover multiplied by profit margin. These are a measure of how efficiently the co is able to utilise its assets to convert to sales and then how much of those sales translate to profit. A high ROA is a good indication of a company’s record of being able to convert Investments into profits. Company Strategy If the market views that the co has made good strategic business decisions in terms of targeting
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Bandywine Homecare‚ a not-for-profit business‚ had revenues of $12 million in 2007. Expenses other than depreciation totaled 75% percent of revenues‚ and depreciation expense was $1.5 million. All revenues were collected in cash during the year and all expenses other than depreciation were paid in cash. What were Brandywine’s 2007 net income‚ total profit margin‚ and cash flow? Net income = 12M * (1 - 75%) - 1.5M = $1.5 million Total profit margin = $1.5M/12M = 12.5% Cash
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The Responsibility Project ETH316 The Entrepreneurial Spirit In society today there seems to be a social stigma surrounding the idea of doing right by our bother’s and sisters. Some would call it having good or bad social responsibility. This of course it derived by an individual’s ethical point-of-view. What some would perceive as doing the right thing‚ others might feel it is not there responsibility. In the short film I chose‚ The Entrepreneurial Spirit: Austin Black‚ it talks about
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Version 1 FINANCE 261 FINANCE 261 Test Answer Sheet Name: __________________________________________ Student ID Number:_______________________________ Please use CAPITAL LETTERS when writing your answers. Question Answer Question Answer Question Answer 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Question Answer 16 17 18 19 20 1 Version 1 FINANCE 261 THE UNIVERSITY OF AUCKLAND Department of Accounting and Finance FINANCE
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constraints that otherwise would be imposed by current earnings. c. Financial markets can allocate the risk of real assets. On one hand‚ when considering investing on the same project‚ risk-tolerant investors can buy high risk financial assets for more profit‚ while the more conservative ones can buy low risk assets that promise to provide a fixed payment. Everyone get satisfied and get equal payment compared to the risk. On the other hand‚ This allocation of risk also benefits the firms that need to raise
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at maximization it sales revenue (price x quantity0 rather than its profit. Hence his hypothesis has come to be known as sales maximization theory & revenue maximization theory. According to baumol‚ sales have become an end by themselves and accordingly sales maximization has become the ultimate objective of the firm. Hence‚ the management of a firm directs its energies in promoting and maximizing its sales revenue instead of profit. The goal of sales maximization is explained by the management’s
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