Question 1 Government regulators use the term __________ within the securities investment world when executives of companies are issued "hot" initial public offerings (IPO) when favoring certain investment banks for underwriting securities offerings?
Kickbacks
Insider Trading
Spinning
Investment timing
Question 2 What conditions can exist for a capital lease to be capitalized on a balance sheet?
The lessee can purchase the property at less than its true market value when the lease expires.
The lease runs for a period equal to or greater than 70% of the asset's life.
Under the terms of the lease, ownership of the property is not transferrable from the lessor to the lessee.
The future value of the lease payments is equal to or greater than 90% of the initial value of the asset.
Question 3 When an investor group tries to take over a publicly owned company with limited funds and the take-over financing involves substantial borrowing what is this known as ____________?
Stock purchasing
Public offering
Leverage buyout
Investment banking
Question 4 What are some of the ways that a company can reduce the potential loss due to expropriations within their business operations?
Finance the subsidiary with local capital
Structure operations so that the subsidiary has value only as a part of the integrated corporate system
Obtain insurance against economic losses from expropriation from a source such as the Overseas Private Investment Corporation (OPIC)
All of the above
Question 5 Who are the three principal sets of players that interact within financial markets and provide a brief explanation of their roles within economic settings?
Question 6 At the end of its third year of operations a company had $4,500,000 in revenues, $3,375,000 in cost of goods sold, $450,000 in operating expenses (including a depreciation expense of $150,000), with a tax liability equal to 35% of the firm's taxable income. What is the net income of the firm for the year?
$236,250.00
$378,645.00
$421,567.00
$438,750.00
Question 7 Blossom Lawns expects to have total sales next year totaling $15,000,000 and the firm pays taxes at 35% and will owe $300,000 in interest expenses. Based on last year's operations management predicts that its cost of goods sold will be 60% of sales and operating expenses should total 30%. What is your estimate of the firm's net income for the coming year after it meets it tax obligation?
$643.187.00
$780,000.00
$843,546.00
$856,678.00
Question 8 You would like to make a single investment and have $2 million at the time of your retirement in 35 years. You have search around and have found a mutual fund that will earn you 4% annually. How much money will you have to invest in this mutual fund today?
$250,344.56
$302,498.21
$426,857.44
$506,830.94
Question 9 Using the information from problem 8 you have learned how to earn 14% annual return on this same investment? How soon could you then retire at this new rate of return?
9.21 years
10.48 years
18.92 years
19.43 years
Question 10 To help pay for your education you have taken out $25,000 in student loans over the course of years. The money you have borrowed has monthly payments that will be spread out over 15 years at 7 percent compounded monthly, how much are your monthly student loan payments?
$138.89
$167.54
$224.71
$257.46