011-45120800 Info@aafmindia.co.in
  • Online Registration
  • AAFM India
  • Blog
  • jobs
  • FAQ’s
  • Contact Us
  • Enquiry
  • Cart
0 Items
Wealth Management Course that Top Wealth Managers Swear By
  • Home
  • Wealth Management Industry
  • About CWM Program
    • Chartered Wealth Manager
    • CWM Benefits
    • CWM Curriculum
    • CWM Pathway
      • Registration Pathway
      • Compulsory Pathway
      • Experience Pathway
      • Experience Requirement
      • Project Work
      • CWM Examination
  • AAFM Certifications
  • Club Membership
  • Login
Select Page

Unit 4 – Quiz

by

Time limit: 0

Quiz Summary

0 of 95 Questions completed

Questions:

Information

You have already completed the quiz before. Hence you can not start it again.

Quiz is loading…

You must sign in or sign up to start the quiz.

You must first complete the following:

Results

Quiz complete. Results are being recorded.

Results

0 of 95 Questions answered correctly

Your time:

Time has elapsed

You have reached 0 of 0 point(s), (0)

Earned Point(s): 0 of 0, (0)
0 Essay(s) Pending (Possible Point(s): 0)

Categories

  1. Not categorized 0%
  1. 1
  2. 2
  3. 3
  4. 4
  5. 5
  6. 6
  7. 7
  8. 8
  9. 9
  10. 10
  11. 11
  12. 12
  13. 13
  14. 14
  15. 15
  16. 16
  17. 17
  18. 18
  19. 19
  20. 20
  21. 21
  22. 22
  23. 23
  24. 24
  25. 25
  26. 26
  27. 27
  28. 28
  29. 29
  30. 30
  31. 31
  32. 32
  33. 33
  34. 34
  35. 35
  36. 36
  37. 37
  38. 38
  39. 39
  40. 40
  41. 41
  42. 42
  43. 43
  44. 44
  45. 45
  46. 46
  47. 47
  48. 48
  49. 49
  50. 50
  51. 51
  52. 52
  53. 53
  54. 54
  55. 55
  56. 56
  57. 57
  58. 58
  59. 59
  60. 60
  61. 61
  62. 62
  63. 63
  64. 64
  65. 65
  66. 66
  67. 67
  68. 68
  69. 69
  70. 70
  71. 71
  72. 72
  73. 73
  74. 74
  75. 75
  76. 76
  77. 77
  78. 78
  79. 79
  80. 80
  81. 81
  82. 82
  83. 83
  84. 84
  85. 85
  86. 86
  87. 87
  88. 88
  89. 89
  90. 90
  91. 91
  92. 92
  93. 93
  94. 94
  95. 95
  1. Current
  2. Review
  3. Answered
  4. Correct
  5. Incorrect
  1. Question 1 of 95
    1. Question

    The terms corporate finance and corporate financier are also associated with

    Correct
    Incorrect
  2. Question 2 of 95
    2. Question

    The term “corporate finance” and “corporate financier” may be associated with transactions in which capital is raised in order to

    Correct
    Incorrect
  3. Question 3 of 95
    3. Question

    What is the amount of time it takes to get back the amount of money originally invested?

    Correct
    Incorrect
  4. Question 4 of 95
    4. Question

    Which one of the following terms is defined as the management of a firm’s long-term investments?

    Correct
    Incorrect
  5. Question 5 of 95
    5. Question

    A business owned by a solitary individual who has unlimited liability for its debt is called a

    Correct
    Incorrect
  6. Question 6 of 95
    6. Question

    A business partner whose potential financial loss in the partnership will not exceed his or her investment in that partnership is called a

    Correct
    Incorrect
  7. Question 7 of 95
    7. Question

    A business created as a distinct legal entity and treated as a legal “person” is called a

    Correct
    Incorrect
  8. Question 8 of 95
    8. Question

    Which one of the following terms is defined as a conflict of interest between the corporate shareholders and the corporate managers?

    Correct
    Incorrect
  9. Question 9 of 95
    9. Question

    Decisions made by financial managers should primarily focus on increasing which one of the following?

    Correct
    Incorrect
  10. Question 10 of 95
    10. Question

    A project may be regarded as high risk project when

    Correct
    Incorrect
  11. Question 11 of 95
    11. Question

    A single, overall cost of capital is often used to evaluate projects because

    Correct
    Incorrect
  12. Question 12 of 95
    12. Question

    A quick approximation of the typical firm’s cost of equity may be calculated by

    Correct
    Incorrect
  13. Question 13 of 95
    13. Question

    Who among the following are those who lend funds and expect a fixed return irrespective of success or failure of project?

    Correct
    Incorrect
  14. Question 14 of 95
    14. Question

    The key sources of value (earning an excess return) for a company can be attributed primarily to

    Correct
    Incorrect
  15. Question 15 of 95
    15. Question

    The overall (weighted average) cost of capital is composed of a weighted average of

    Correct
    Incorrect
  16. Question 16 of 95
    16. Question

    Which of the following would be consistent with a more aggressive approach to financing working capital?

    Correct
    Incorrect
  17. Question 17 of 95
    17. Question

    Which of the following illustrates the use of a hedging (or matching) approach to financing?

    Correct
    Incorrect
  18. Question 18 of 95
    18. Question

    What varies inversely with profitability?

    Correct
    Incorrect
  19. Question 19 of 95
    19. Question

    Financing a long-lived asset with short-term financing would be

    Correct
    Incorrect
  20. Question 20 of 95
    20. Question

    Having defined working capital as current assets, it can be further classified according to

    Correct
    Incorrect
  21. Question 21 of 95
    21. Question

    How can a firm provide a margin of safety if it cannot borrow on short notice to meet its needs?

    Correct
    Incorrect
  22. Question 22 of 95
    22. Question

    Corporate governance specifies the distribution of rights and responsibilities among different participants in the organization such as

    Correct
    Incorrect
  23. Question 23 of 95
    23. Question

    The objective of any corporate governance system is to simultaneously improve corporate performance and accountability as a

    Correct
    Incorrect
  24. Question 24 of 95
    24. Question

    The framework for establishing good corporate governance and accountability was originally set up by the

    Correct
    Incorrect
  25. Question 25 of 95
    25. Question

    A company may become insolvent if it

    Correct
    Incorrect
  26. Question 26 of 95
    26. Question

    A board member is independent when

    Correct
    Incorrect
  27. Question 27 of 95
    27. Question

    The traditional approach towards the valuation of a company assumes

    Correct
    Incorrect
  28. Question 28 of 95
    28. Question

    When sequential long-term financing is involved, the choice of debt or equity influences the future financial

    Correct
    Incorrect
  29. Question 29 of 95
    29. Question

    Which of the following statements regarding the net operating income approach is incorrect?

    Correct
    Incorrect
  30. Question 30 of 95
    30. Question

    ____________ costs are associated with monitoring management to ensure that it behaves properly.

    Correct
    Incorrect
  31. Question 31 of 95
    31. Question

    Which of the following is not something that you would consider when evaluating the optimal capital structure?

    Correct
    Incorrect
  32. Question 32 of 95
    32. Question

    Which one of the following statistic can be used as a quantitative measure of relative financial risk?

    Correct
    Incorrect
  33. Question 33 of 95
    33. Question

    The further a firm operates above its operating break-even point, the closer its degree of operating leverage (DOL) measure approaches

    Correct
    Incorrect
  34. Question 34 of 95
    34. Question

    Higher operating leverage is related to the use of additional

    Correct
    Incorrect
  35. Question 35 of 95
    35. Question

    The cash required during a specific period to meet interest expenses and principal payments is referred to as the

    Correct
    Incorrect
  36. Question 36 of 95
    36. Question

    Which of the following ratings apply to an investment grade quality security?

    Correct
    Incorrect
  37. Question 37 of 95
    37. Question

    A(n) __________ is a payment of additional shares to shareholders in lieu of cash.

    Correct
    Incorrect
  38. Question 38 of 95
    38. Question

    A(n) __________ occurs when there is an increase in the number of shares outstanding by reducing the par value of stock.

    Correct
    Incorrect
  39. Question 39 of 95
    39. Question

    A(n) __________ is the expected cash dividend that is normally paid to shareholders.

    Correct
    Incorrect
  40. Question 40 of 95
    40. Question

    What is a nonrecurring dividend paid to shareholders in addition to the regular dividend?

    Correct
    Incorrect
  41. Question 41 of 95
    41. Question

    A dividend reinvestment plan (DRIP) is

    Correct
    Incorrect
  42. Question 42 of 95
    42. Question

    What is an indication of the costs and benefits of investing in a particular project by a business firm and is calculated as the ratio of a project’s cash flows to the initial investment?

    Correct
    Incorrect
  43. Question 43 of 95
    43. Question

    Which one of the following functions should be the responsibility of the controller rather than the treasurer?

    Correct
    Incorrect
  44. Question 44 of 95
    44. Question

    The decision to issue additional shares of stock is an example of which one of the following?

    Correct
    Incorrect
  45. Question 45 of 95
    45. Question

    Which one of the following statements is correct?

    Correct
    Incorrect
  46. Question 46 of 95
    46. Question

    Which of the following are cash flows from a corporation into the financial markets?
    I. Repayment of long-term debt
    II. Payment of government taxes
    III. Payment of loan interest
    IV. Payment of quarterly dividend

    Correct
    Incorrect
  47. Question 47 of 95
    47. Question

    The internal Rate of Return (IRR) criterion for project acceptance, under theoretically infinite funds is: accept all projects which have

    Correct
    Incorrect
  48. Question 48 of 95
    48. Question

    With limited finance and a number of project proposals at hand, select that package of projects which has

    Correct
    Incorrect
  49. Question 49 of 95
    49. Question

    The difference between the present value of cash inflows and the present value of cash outflows associated with a project is known as

    Correct
    Incorrect
  50. Question 50 of 95
    50. Question

    If the profitability index of a project is 0.75, it means

    Correct
    Incorrect
  51. Question 51 of 95
    51. Question

    To compute the required rate of return for equity in a company using the CAPM, it is necessary to know all of the following Except

    Correct
    Incorrect
  52. Question 52 of 95
    52. Question

    In calculating the costs of the individual components of a firm’s financing, the corporate tax rate is important to which of the following component cost formulas?

    Correct
    Incorrect
  53. Question 53 of 95
    53. Question

    Some projects that a firm accepts will undoubtedly result in zero or negative returns. In light of this fact, it is best if the firm

    Correct
    Incorrect
  54. Question 54 of 95
    54. Question

    Which of the following is not a recognized approach for determining the cost of equity?

    Correct
    Incorrect
  55. Question 55 of 95
    55. Question

    What is the difference between economic profit and accounting profit?

    Correct
    Incorrect
  56. Question 56 of 95
    56. Question

    In deciding the optimal level of current assets for the firm, management is confronted with

    Correct
    Incorrect
  57. Question 57 of 95
    57. Question

    The amount of current assets required to meet a firm’s long-term minimum needs is referred to as

    Correct
    Incorrect
  58. Question 58 of 95
    58. Question

    Which of the following statements is correct for a conservative financing policy for a firm relative to a former aggressive policy?

    Correct
    Incorrect
  59. Question 59 of 95
    59. Question

    Risk, as it relates to working capital, means that there is jeopardy to the firm for not maintaining sufficient current assets to

    Correct
    Incorrect
  60. Question 60 of 95
    60. Question

    Which of the following actions will not help directors to protect themselves from non-compliance with their obligations and responsibilities?

    Correct
    Incorrect
  61. Question 61 of 95
    61. Question

    The Sarbanes–Oxley Act requires that executive officers attest to all the following except

    Correct
    Incorrect
  62. Question 62 of 95
    62. Question

    The 2012 EU Commission Communication ‘Action Plan: European company law and corporate governance’ strives to

    Correct
    Incorrect
  63. Question 63 of 95
    63. Question

    In 2006 the International Forum of Independent Audit Regulators (IFIAR) was established to

    Correct
    Incorrect
  64. Question 64 of 95
    64. Question

    The corporate governance structure of a company reflects the individual companies

    Correct
    Incorrect
  65. Question 65 of 95
    65. Question

    According to the concept of financial signaling, management behavior results in new debt issues being regarded as

    Correct
    Incorrect
  66. Question 66 of 95
    66. Question

    The cost of capital for a firm when we allow for taxes, bankruptcy, and agency costs

    Correct
    Incorrect
  67. Question 67 of 95
    67. Question

    The discount rate used to determine the present value of a stream of expected future cash flows is referred to as the

    Correct
    Incorrect
  68. Question 68 of 95
    68. Question

    Allowing for bankruptcy costs and an increasing probability of bankruptcy with increasing financial leverage, we should expect __________ than would be the case without bankruptcy costs.

    Correct
    Incorrect
  69. Question 69 of 95
    69. Question

    The existence of __________ on the balance sheet generates tax advantages that directly influence the capital structure of the firm.

    Correct
    Incorrect
  70. Question 70 of 95
    70. Question

    If I believe in the basic principle of a risk-reward relationship, my conclusion regarding security ratings and yields between an Aaa bond and a Baa bond would be that

    Correct
    Incorrect
  71. Question 71 of 95
    71. Question

    In the context of operating leverage break-even analysis, if selling price per unit rises and all other variables remain constant, the operating break-even point in units will

    Correct
    Incorrect
  72. Question 72 of 95
    72. Question

    A firm has a DOL of 3.5 at Q units. What does this tell us about the firm?

    Correct
    Incorrect
  73. Question 73 of 95
    73. Question

    A firm has a DFL of 3.5 at X dollars. What does this tell us about the firm?

    Correct
    Incorrect
  74. Question 74 of 95
    74. Question

    Which of the following statements is not correct regarding the calculation of the degree of total leverage (DTL)?

    Correct
    Incorrect
  75. Question 75 of 95
    75. Question

    If an individual stockholder reinvests dividends under a company’s dividend reinvestment plan, the reinvested dividends are

    Correct
    Incorrect
  76. Question 76 of 95
    76. Question

    Investors may be willing to pay a premium for stable dividends because of the informational content of __________, the desire of investors for __________, and certain __________.

    Correct
    Incorrect
  77. Question 77 of 95
    77. Question

    What method of stock repurchase occurs when the buyer purchases securities through a brokerage house?

    Correct
    Incorrect
  78. Question 78 of 95
    78. Question

    The Board of Directors announces the amount and date of the next dividend on the __________ date; while the __________ date is the first date on which the purchaser of a stock is no longer entitled to the recently declared dividend.

    Correct
    Incorrect
  79. Question 79 of 95
    79. Question

    According to the authors of your text, the repurchase of stock is considered __________ decision rather than __________ decision.

    Correct
    Incorrect
  80. Question 80 of 95
    80. Question

    Which of the following should a financial manager consider when analyzing a capital budgeting project?
    I. Project start up costs
    II. Timing of all projected cash flows
    III. Dependability of future cash flows
    IV. Dollar amount of each projected cash flow

    Correct
    Incorrect
  81. Question 81 of 95
    81. Question

    A company is considering the following three investment proposals
    A) Investment required: $80,000, present value of future cash inflows: $96,000
    B) Investment required: $75,000, present value of future cash inflows: $120,000
    C) Investment required: $100,000, present value of future cash inflows: $150,000
    How would you rank the above investment proposals using profitability index method?

    Correct
    Incorrect
  82. Question 82 of 95
    82. Question

    The net present value of four projects is given below:
    Project A: $25,000
    Project B: $10,000
    Project C: $22,000
    Project D: $15,000
    The four projects given above require the same amount of investment. How would you rank them using net present value (NPV) method?

    Correct
    Incorrect
  83. Question 83 of 95
    83. Question

    If interest expense of a company is $300,000 and tax rate is 40%, the after-tax cost of interest is

    Correct
    Incorrect
  84. Question 84 of 95
    84. Question

    The Tchotchke Knick-Knack Company relies on preferred stock, bonds, and common stock for its long-term financing. Rank in ascending order (i.e., 1 = lowest, while 3 = highest) the likely after-tax component costs of the Tchotchke Company’s long-term financing.

    Correct
    Incorrect
  85. Question 85 of 95
    85. Question

    David Ding is evaluating two conventional, independent capital budgeting projects (X and Y) by making use of the risk-adjusted discount rate (RADR) method of analysis. Projects X and Y have internal rates of return of 16 percent and 12 percent, respectively. The RADR appropriate to Project X is 18 percent, while Project Y’s RADR is only 10 percent. The company’s overall, weighted-average cost of capital is 14 percent. David should

    Correct
    Incorrect
  86. Question 86 of 95
    86. Question

    Your firm has a philosophy that is analogous to the hedging (maturity matching) approach. Which of the following is the most appropriate non-spontaneous form for financing the excess seasonal current asset needs?

    Correct
    Incorrect
  87. Question 87 of 95
    87. Question

    Under a conservative financing policy a firm would use long-term financing to finance some of the temporary current assets. What should the firm do when a “dip” in temporary current assets causes total assets to fall below the total long-term financing?

    Correct
    Incorrect
  88. Question 88 of 95
    88. Question

    Under which one of the following theory both internal and external corporate governance mechanisms are intended to induce managerial actions that maximize profit and shareholder value?

    Correct
    Incorrect
  89. Question 89 of 95
    89. Question

    What is the value of the tax shield if the value of the firm is $5 million, its value if unlevered would be $4.78 million, and the present value of bankruptcy and agency costs is $360,000?

    Correct
    Incorrect
  90. Question 90 of 95
    90. Question

    What is the market value of common equity under the NOI approach? The firm has an expected net operating income of $5,000 with $4,000 of debt (market value). Assume that the overall capitalization rate is 20%.

    Correct
    Incorrect
  91. Question 91 of 95
    91. Question

    Two firms that are virtually identical except for their capital structure are selling in the market at different values. According to M&M

    Correct
    Incorrect
  92. Question 92 of 95
    92. Question

    Calculate the break-even point for sales revenues given the following information. The firm has $1,000,000 in fixed costs. The firm anticipates that variable costs will be $1 for every $5 in sales.

    Correct
    Incorrect
  93. Question 93 of 95
    93. Question

    Calculate the degree of financial leverage (DFL) for a firm when its EBIT is $2,000,000. The firm has $3,000,000 in debt that costs 10% annually. The firm also has a 9%, $1,000,000 preferred stock issue outstanding. The firm pays 40% in taxes.

    Correct
    Incorrect
  94. Question 94 of 95
    94. Question

    Financial signaling has been raised as an argument in the battle over the relevancy of dividends. Which of the following statements concerning dividends is most likely to be voiced by someone using the financial signaling argument?

    Correct
    Incorrect
  95. Question 95 of 95
    95. Question

    The shareholders of your firm anticipate receiving a regular dividend that is consistent with past dividend policies. What benefit occurs to shareholders if the firm repurchases shares with the same total quantity of money that would have been spent on dividends? Assume that the P/E ratio is maintained with either scenario.

    Correct
    Incorrect

Recent Post

  • Rethinking Retirement by Exploring Traditional, Semi-Retirement, and Mini-Retirement Models
  • SEBI’s New Nomination Rules Explained- What Investors Need to Know?
  • The Strategic Benefits of Naming an HUF as a Beneficiary in a Private Trust
  • Choosing Between HUF and Private Trusts for Succession and Tax Planning
  • Risk in Wealth Planning
    Understanding Risk in Wealth Planning: A Key Element in Investment Decision-Making

    Enquire About AAFM Courses



    Connect with us for Latest Updates

    • Facebook
    • Twitter
    • LinkedIn
    • Instagram
    • YouTube

    • Facebook
    • Twitter
    • Instagram
    Designed By cwmindia.com
    Login
    Accessing this course requires a login. Please enter your credentials below!

    Lost Your Password?