Function of financial markets

Assignment Help Financial Management

Reference no: EM131837486

1. In a large corporation, preparation of the firm’s financial statements would most likely be conducted by the:

A) treasurer.

B) controller

C) Chief financial officer

D) financial manager

2. Which of the following financial assets is least likely to have an active secondary market?

A) Common stock of a large public firm

B) Bank loans made to smaller firms

C) Bonds of a major, multinational corporation

D) Debt issued by the U.S. Treasury

3. Which of the following is not a function of financial markets?

A) allow individuals to diversify their risk.

B) provide convenient ways to make large payments.

C) allow individuals to purchase a range of goods online.

D) provide funds to companies that wish to expand.

4. Which of the following information is not provided by the financial markets?

A) The price of six ounces of gold

B) The cost of borrowing $500,000 for 5 years

C) Microsoft's earnings in 2013

D) The cost of one million yen in U.S. dollars

5. What is the future value of $10,000 on deposit for 2 years at 6% simple interest?

A) $10,600

B) $11,236

C) $11,200

D) $13,382.26

6. The salesperson offers, "Buy this new car for $25,000 cash or, with an appropriate down payment, pay $500 per month for 48 months at 8% interest." Assuming that the salesperson does not offer a free lunch, calculate the "appropriate" down payment.

A) $1,000.00

B) $4,519.04

C) $5,127.24

D) $8,000.00

7. How much more is a perpetuity of $1,000 worth than an annuity of the same amount for 20 years? Assume an interest rate of 10% and cash flows at the end of each period.

A) $297.29

B) $1,486.44

C) $1,635.08

D) $2,000.00

8. If the interest rate is 6%, which of these investments would you prefer?

A) A single payment of $500 in year 3.

B) A payment of $40 a year for 20 years starting in one year’s time.

C) A perpetuity of $30 a year starting in one year’s time.

D) A payment of $342.17 today

9. The sum of $3,000 is deposited into an account paying 10% annually. If $1,206 is withdrawn at the end of years 1 and 2, how much then remains in the account?"

A) $1,326.97

B) $1,206.34

C) $1,097.40

D) $587.32

10. The present value of an annuity stream of $100 per year is $614 when valued at a 10% rate. By approximately how much would the value change if these were annuities due?

A) $10

B) $61.40

C) $10 ×Number of years in annuity stream

D) $6.14 × Number of years in annuity stream

11. "Give me $5,000 today and I'll return $10,000 to you in 5 years," offers the investment broker. To the nearest percent, what annual interest rate is being offered?

A) 12.29%

B) 13.67%

C) 14.87%

D) 12.84%

Reference no: EM131837486

Questions Cloud

Present value of an annuity : Find the present values of these ordinary annuities. Discounting occurs once a year. Rework previous parts assuming that they are annuities due.

What was net income of Coho Company : If Coho Company had net income of $382,800 in 2017 and it experienced a 16% increase in net income over 2016, what was its 2016 net income?

Explain whether Phoenix net income increased or decreased : Horizontal analysis (trend analysis) percentages for Phoenix Company's sales revenue, cost of goods sold, and expenses are listed here.

Compute the current ratio for each year : Suppose these selected condensed data are taken from recent balance sheets of Bob Evans Farms (in thousands).

Function of financial markets : In large corporation, preparation of firm financial statements would most likely be conducted by. Which of the following is not a function of financial markets?

Compute for each year the average collection period : What conclusions about the management of accounts receivable can be drawn from these data? At the end of 2015, accounts receivable was $520,000.

What conclusions concerning the management of the inventory : What conclusions concerning the management of the inventory can be drawn from these data?

Compute the free cash flow : Selected data taken from a recent year's financial statements of trading card company Topps Company, Inc. are as follows (in millions).

Source of equity that is to be reported on income statement : Retained earnings, or reserves, is a source of equity that is to be reported on the income statement.

User Account

All Pages