Treasury bill is issue through competitive bidding process

Assignment Help Financial Management

Reference no: EM131531727

Answer True or False to each of the next five (5) statements.

1. Treasury Bills are issued through competitive bidding process at discount from par.

2. In the capital market both short term and long term securities are traded, whereas only short term securities are traded in the money market.

3. Free cash flow represents the amount of money available to the firm, after it has met all operating needs and paid for investments in net fixed assets.

4. Three ratios of liquidity are net working capital, current ratio and acid - test ratio

5. The income statement represents changes within a time period, while the balance sheet reflects levels as at a particular period.

Choose the letter a, b, c, or d that carries the appropriate response:

6. _______________ Serve as intermediaries channelling the savings of individuals, businesses, and governments into loans and investments.

(a) Financial markets

(b) Financial institutions

(d) OTC markets

7. Of the following group of ratios, which would show the combined effect of liquidity, asset management and debt on the overall operating results?

(a) Liquidity ratios

(b) Debt ratios

(d) Profitability ratios

8. XYZ Company Ltd. has EBIT of $1,500,00 million and a 15% tax rate. It had $270,000 in depreciation expenses with a $250,000 increase in working capital. It had another $170,000 in capital expenditures. What is its free cash flow?

(a) $1,125,000

(b) $ 2,850,000

(d) $ 1,500,000

9. Fast Cash Limited charges 1 percent (%) per week on their loans. Assume there are exactly 52 weeks in a year. What is the effective annual rate?

(a) 55.36%

(b) 67.77%

(d) 57.35%

10. _________________ is an annuity that provides its holder with payment dollars at the beginning of each year.

(a) An annuity due

(b) A warrant

(d) An ordinary annuity

11. All of the following statements about bonds are true, except one. Choose the false statement.

(a) If the value of a bond, Bo, is less than its par value, the bond is selling at a discount.

(b) Bonds with short maturities will have less interest rate risk than bonds with longer maturities and equal features.

(d) The discount rate of a bond is synonymous with the bond's required return.

12. The present value of a bond's _____________________________ determines the value of the bond.

(a) Dividend

(b) Coupon payment and maturity value

(d) Maturity value

13. If the returns on one asset move in the same direction as the returns on another asset then the asset are:

(a) Positively correlated

(b) not correlated

(d) perfectly positively correlated.

14. Another term for non-diversifiable risk is:

(a) Systematic risk

(b) non- systematic risk

(d) both b and c

15. All of the following statements about stock valuation are true, except one. Choose the false statement.

(a) It is easier to value stock than it is to find the value of bonds.

(b) The value of a share of stock depends on the cash flows investors can expect to by owning that stock

(d) The present value of a stock's dividend determines the value of the stock.

Reference no: EM131531727

Questions Cloud

What is cost of common equity and wacc : What is its cost of common equity and its WACC?

Research a translation of the epigraph by dante : research a translation of the epigraph by Dante which appears at the beginning of the poem - The Love Song of J. Alfred Prufrock

What is the project projected profitability index : What is the project’s projected Payback period? The firm's payback requirement is 2 years. What is the project’s projected Profitability index?

Discuss the given statement in corporate management : A topical corporate governance issue in practice and academia is female representation in corporate management.

Treasury bill is issue through competitive bidding process : Treasury Bills are issued through competitive bidding process at discount from par. Three ratios of liquidity are net working capital, current ratio and acid.

Hills like white elephants : Create a five paragraph rough draft in which you discuss three symbols and how they relate to the overall meaning of the story.

Summarize beliefs about the origin of the universe and life : Summarize beliefs about the origin of the universe and life, including what Christians believe, what you believe, and how people's beliefs about origins might i

Do you think a company has an ethical obligation : Spoke is e-collaboration software that examines all employees' e-mail contact lists searching for people at potential customer sites who may be known.

Differences in bottom-up and top-down budgeting approaches : What is basis risk? Explain it as it relates to a currency swap. What is the differences between the bottom-up and top-down budgeting approaches?

User Account

All Pages