Reference no: EM132672511

Problem 1: A firm ended the year with an average collection period of 20 days. The firm's credit sales were $50 million. What is the firm's year-end balance in accounts receivable?

Option 1: $2.50 million

Option 2: $4.00 million

Option 3: $1.46 million

Option 4: $2.74 million

Problem 2: You note the following yield curve in The Wall Street Journal. According to the unbiased expectations hypothesis, what is the one-year forward rate for the period beginning one year from today, 2f1?

Maturity Yield

One day 2.00%

One year 6.00

Two years 7.50

Three years 9.00

Option 1: 9.0 percent

Option 2: 10.2 percent

Option 3: 7.6 percent

Option 4: 8.6 percent

Problem 3: The theory that states that the yield curve reflects the market's current expectations of future short-term rates is called the

Option 1: liquidity premium theory.

Option 2: inverted forward theory.

Option 3: market segmentation theory.

Option 4: unbiased expectations theory.