Finc600 Week 5 Practice Quiz

FINC600 Week 5 Practice Quiz
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Corporate Finance
Week 5 Practice Quiz

Part 1 of 1 - Week 4 REQUIRED Quiz 93.5/ 100.0 Points
 

Question 1 of 25 4.0/ 4.0 Points
The concept of compound interest is most appropriately described as:

 
A.Interest earned on an investment  
B.The total amount of interest earned over the life of an investment  
C.Interest earned on interest  
D.None of the above
 
Question 2 of 25 4.0/ 4.0 Points
Which of the following investment rules does not use the time value of the money concept?

 
A.Net present value  
B.Internal rate of return  
C.The payback period  
D.All of the above use the time value concept
 
Question 3 of 25 4.0/ 4.0 Points
The unique risk is also called the:

 
A.Unsystematic risk  
B.Diversifiable risk  
C.Firm specific risk  
D.All of the above
 
Question 4 of 25 2.0/ 4.0 Points
What are some of the important points to remember while estimating the cash flows of a project?


The most important points are

1) They are estimates. So there can be deviations

2) Some huge loss may completely change the return from product.

3) Other risks like market risks, reinvestment risk etc. may affect the cash flow pattern

Question 5 of 25 4.0/ 4.0 Points
A bond with duration of 10 years has yield to maturity of 10%. This bond's volatility is:

 
A.9.09%  
B.6.8%  
C.14.6%  
D.6.0%
 
Question 6 of 25 4.0/ 4.0 Points
Major disadvantages of the Sarbanes-Oxley Act of 2002 (SOX) are the following except:

 
A.good investor protection  
B.increase in compliance costs  
C.that it constrains managers' ability to run the firm  
D.that it may discourage development of human capital in the firm
 
Question 7 of 25 4.0/ 4.0 Points
According to the net present value...