Finance Test 1 (52 Question)
1Question: If inflation is anticipated to be 5 percent during the next year, while the real rate of interest for a one-year loan is 5 percent, then what should the nominal rate of interest be for a risk-free one-year loan?
A 5 percent
B 10 percent
C 25 percent
D None of the above
2 Question: Which one of the following statements is not true?
A The value of a dollar invested at a positive interest rate grows over time
B The further in the future you receive a dollar, the less it is worth today
C A dollar in hand today is worth more than a dollar to be received in the future
D The further in the future you receive a dollar, the more it is worth today
3 Question: Efficiency ratio: Jet, Inc., has net sales of $712,478 and accounts receivables of $167,435. What are the firm’s accounts receivables turnover and days’ sales outstanding?
A 0.24 times; 78.5 days
B 4.26 times; 85.7 days
C 5.2 times; 61.3 days
D None of the above
4 Question: If you have loaned capital to a firm, then you could be
A A shareholder
B A stakeholder
C A partner
D All of the above
5 Question: Which one of the following is not an advantage of using ROE as a goal?
A ROE is highly correlated with shareholder wealth maximization
B ROE and the DuPont analysis allow management to break down the performance and identify areas of strengths and weaknesses
C ROE does not consider risk
D All of the above are advantages of using ROE as a goal
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