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Lectures On Corporate Finance – CMFAS Module 4a
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Question 1 of 30
1. Question
Which of the following best describe what the interbank market concept refers to?
Correct
Incorrect
Sometimes banks get shortage regarding particular foreign currencies. When this happens, the banks purchase that currency from other banks. This process is called the interbank market.
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Question 2 of 30
2. Question
How can arbitrage be defined in financial terms, considering the below options?
Correct
Incorrect
Arbitrage is the simultaneous purchase and sale of an asset to profit from an imbalance in the price, by making a riskless profit.
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Question 3 of 30
3. Question
Which from the below when you think about channels of intermediation are considered true statements?
I. Direct transfer from the lender to the borrower in a non-market transaction.
II. Direct intermediation through a market intermediary such as a broker in a market-based transaction.
III. Indirect claims through a financial intermediary.
IV. Taking services and ultimately lends the deposited funds out a mortgages or loans.Correct
Incorrect
Intermediation is the process that occurs in various situations, between one part to another. In this case, all the variants are correct statements.
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Question 4 of 30
4. Question
How does a company in general stand in default of any bond?
Correct
Incorrect
A business doesn’t follow the stated convents of the bond, which makes as a general rule for the company.
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Question 5 of 30
5. Question
What will an investor do with an asset if the analysis indicates it is underpriced?
Correct
Incorrect
Investors will always look for opportunities because this is how the market works. So, if analysis will show that an asset he is interested in is underpriced, most probably he will buy that particular asset.
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Question 6 of 30
6. Question
Which of the following financial ratios is not a liquidity ratio?
Correct
Incorrect
The Inventory Turnover is not a liquidity ratio but is a financial ratio that provides information about the liquidity of a company.
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Question 7 of 30
7. Question
What is the basic accounting equation, considering the below variants?
Correct
Incorrect
The accounting equation states that the liabilities together with the equity is resulting in assets.
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Question 8 of 30
8. Question
How is it called the period of time during which payments earn interest and grow tax-deferred?
Correct
Incorrect
The period of time during which payments earn interest and grow tax-deferred is always called the pay-in period.
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Question 9 of 30
9. Question
Which is the most suitable payment option considering that an annuity is payable for as long as the annuitant lives?
Correct
Incorrect
As long as the annuities live, the most suitable payment option, in the condition of this annuity to be paid is though the life income option.
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Question 10 of 30
10. Question
Which of the following best defines what the cost recovery rule is by definition?
Correct
Incorrect
The cost recovery rule is always in this order mainly the cash value from which we subtract the sum paid. All of this equals to the equity of the contract.
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Question 11 of 30
11. Question
Which of the following can be considered an incorrect statement regarding annuities?
Correct
Incorrect
In general, the pooling technique is not used for the annuities in order to spread the risk.
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Question 12 of 30
12. Question
Which from the below is true, if an individual can decrease the risk of fraudulent use of their credit cards?
Correct
Incorrect
Even though there is no best way of not having the cards copied, one of the best way of decreasing the risk of fraud regarding bank cards is signing the back of the card with a personal signature.
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Question 13 of 30
13. Question
When comparing and contrasting savings and investing, which of the following is true?
Correct
Incorrect
The core difference between the savings and investments is that saving is setting aside the money you don’t spend now, while the investing is buying assets such as stocks.
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Question 14 of 30
14. Question
When does the agency problems are likely to arise, in which organizational form?
Correct
Incorrect
Having a sole proprietorship sometimes could arise the agency problems when there is a separation of ownership and management of a business.
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Question 15 of 30
15. Question
What is the main goal of financial management within any company?
Correct
Incorrect
Each company has its own purpose however when it comes to the financial aspects of them, each of it has one common goal. That is to maximise the share price of the company.
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Question 16 of 30
16. Question
What do you consider that the nominal cash flow represents considering the below variants?
Correct
Incorrect
The nominal cash flow are always referring to that particular amount of money that is needed to be received but also be paid out in some situations.
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Question 17 of 30
17. Question
What do you understand through real cash flow, considering the following statements?
Correct
Incorrect
Real cash flow means when the inflation is taken into consideration before making any purchase, especially for real estates.
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Question 18 of 30
18. Question
Which of the below solutions are true when you think about active income?
I. Salary.
II. Bonus.
III. Commission.
IV. Net research grants.Correct
Incorrect
Some of the active income that can be presented as being true is the salary which comes together with bonuses and commissions. Last but not least the net research grants is an active income too.
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Question 19 of 30
19. Question
Which of the below are part of the process of a public offering?
I. Management gets approval of the board.
II. Discussions with underwriters.
III. Registration statements filed.
IV. Pricing the issue.Correct
Incorrect
The public offering is a process that always involves some of the following such as the management to be approved by the board. Together with the discussions with underwriters, it needs to get registered the statement files and correctly price the issue.
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Question 20 of 30
20. Question
Which of the below statements are true when you think about the process of issuing the bonds?
I. Bonds are issued by the government.
II. Bonds are issued by the corporatations.
III. Bonds are issued by municipalities.
IV. Bonds are issued only by a company.Correct
Incorrect
The process of issuing bonds is limited mostly to the government, corporations and municipalities.
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Question 21 of 30
21. Question
What is the total value of all items owned by an individual?
Correct
Incorrect
The personal assets of an individual, and especially the total value of them refers to his personal wealth that particular person owns.
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Question 22 of 30
22. Question
Which of the below are steps part of the financial planning process by definition?
I. Define financial goals.
II. Develop financial plans and strategies.
III. Implement financial plans and strategies.
IV. Periodically develop and implement budgets.Correct
Incorrect
A financial planning process is not an easy one especially when it comes to the strategy and investment of a company. There are numerous steps that need to be considered, however some of them refer to clearly defining the financial goals together with developing a strategy. While this is the first step, then it comes to the implementation and the development of the proposed initial strategy.
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Question 23 of 30
23. Question
What is the amount of satisfaction derived from purchases versus costs?
Correct
Incorrect
The amount of satisfaction derived from purchases versus costs can be translated into the utility word.
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Question 24 of 30
24. Question
What are some of the major participants that are usually part of the economic system?
I. Government.
II. Business.
III. Consumers.
IV. Old people.Correct
Incorrect
The most important participants that usually are part of the economic system, meaning they are contributing with money from taxes especially to the economy of the country is the government, business and consumers.
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Question 25 of 30
25. Question
What does, in general, the fiscal policy do, considering the variants provided?
I. Controls levels of taxation.
II. Set levels of government spending.
III. Decides how much money the government employees get.
IV. Controls the level of migrations.Correct
Incorrect
The fiscal policy is useful in cases such as the government not to cross the limit spend for the local projects which include health, education, social assistance, etc. Plus, it also helps to control the level of taxation.
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Question 26 of 30
26. Question
Which of the below do you consider that could determine to be part of your personal income?
I. Demographic income.
II. Education.
III. Where you live.
IV. Career.Correct
Incorrect
All of the solutions offered are true because the personal income depends on most of the time on education. Secondly comes the country/area the person lives in. This dictates the income the person will receive for its pursuit career.
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Question 27 of 30
27. Question
Which of the below do you consider to be true if you think about what the liquidity ratio is used for?
Correct
Incorrect
The liquidity ration is the process used in finance in the event of income loss to measure the ability to pay current and existing debts.
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Question 28 of 30
28. Question
Which of the below best describes what the debt service ratio is helpful for?
Correct
Incorrect
It is easier to meet the debt obligations through the debt service ratio, this allows the individual to make sure he can comfortably reach its goals.
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Question 29 of 30
29. Question
What are some of the ways that in general, a secure budget would be useful for?
I. Monitor and control finances.
II. Allocate income to reach goals.
III. Implement disciplined spending.
IV. Reduce needless spending.Correct
Incorrect
A secure budget is useful in different situations. Some of these refer to the monitoring and controlling of the finances. On the other hands, some others refer to the income received in order to reach the goals established without spending more than needed. This would come together with having a discipline regarding the money spend.
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Question 30 of 30
30. Question
Which of the following statements do you consider to be true when you think about cash management?
Correct
Incorrect
Cash management, in essence, could be explained as the daily basis routine use of liquid assets.