1. if the nominal rate of return on a corporate bond is 11%, the pure rate is 3% and the risk premium is 4%, what is the inflation premium) multiplicative form) on this bond? (a)0% (b)3.62 (c)4% (d)7.12%
2. time value of money teaches us that we can only compare money flow if they (a)occur at the same time (b)have been adjusted for their time value (c)are all the same amount (d)all take place at the same time
3. Which of the following ratios would be most useful in evaluating the profitability of a firm (a) collection period (b) quick ratio (c) funded ratio (d) return on asset?
4. Which of the following actions would not change the current ratio, assuming that the current quick ratio is greater than 1? (a) payment of a quarterly cash dividend (b) payment of trade creditors (c)sales of merchandise on account (d)sale of stock to retire bond
5. How much would you pay of a bond that offered you $600 per year indefinitely if you wanted a 12% return? (a) 4800 (b)5000 (c)6750 (d)7575