Finance Questions
Explore questions in the Finance category that you can ask Spark.E!
Does an unlettered firm have debt?
The use of more debt increases financial risk, which leads to (more/less) risky equity
The use of more debt translates to (higher/lower) interest tax shield
Cash flow statement presents net cash flows relating to what three criteria over a certain period?
T/F: MV is rarely different from BV
T/F: A non cash item is an expense charged against revenues that does not directly affect cash flow
T/F: Balance sheet and income statement combined give a reasonable estimate of the firm's cash flows and market values
T/F: The value of a firm's assets as they appear on the balance sheet of the firm are generally equal to the market value of the firm.
T/F: Financial managers should evaluate book values, not market values
What is the most important pieces of information that can be derived from financial statements?
T/F: The income statement reflects a summary of activity that occurs over some period of time while the balance sheet is a snapshot taken at a single point in time
Can we define the relationship between the risk premium and beta so that we can estimate the expected return?
The higher the beta, the (greater/lower) the risk premium should be
Security market line: portion of the line that is leading up to the market portfolio
Security market line: portion of the line that goes beyond the market portfolio
From the put option holder's viewpoint, the underlying stock is expected to (rise/decline) in value, i.e., "put down."
How many rights does it take to purchase one new share?
The cash position $ in the replicating portfolio is always the minimum of three numbers:
From the call option holder's viewpoint, the underlying stock is expected to (rise/decline) in value, i.e., "call up."
Each existing share has how many rights?