1. Treasury notes and bonds are examples of:
a. Risky investments
b. Above zero risk options
c. Zero risk options
d. Unreliable measures of rate of return on investments
2. The financial tool that shows the profitability of an enterprise is called:
a. a cash flow statement
b. a balance sheet
c. a pro forma statement
d. an income statement
3. James increases the price of a widget from $10 to $12. As a result, sales drop from $10,000 to $7,000. Price elasticity here is:
a. 0.67
b. 1.00
c. 1.50
d. 2.00
4. If a frost causes widespread damages to orange crops in Florida, and this leads to a jump in the price of oranges, this can be captured by movement along the demand curve.
a. true
b. false
5. When viewing the Net Present Value (NPV) of an investment opportunity, you are looking at:
a. The rate of return on your investment over a fixed period of time
b. The profit associated with your future investment measured in terms of today's dollars
c. The point of time in which the investment finally has returns that are greater than outlays
d. Discounted, pre-tax profits