Saturday, December 21, 2019
Finance Exam - 1676 Words
FINAL EXAM 1. The accounting measure of a firms equity value generated by applying accounting principles to asset and liability acquisitions is called ________. A. book value 2. New-economy companies generally have higher _______ than old-economy companies. B. P/E multiples 3. Earnings yields tend to _______ when Treasury yields fall. A. fall 4. A firm that has an ROE of 12% is considering cutting its dividend payout. The stockholders of the firm desire a dividend yield of 4% and a capital gain yield of 9%. Given this information which of the following statement(s) is/are correct? I. All else equal the firms growth rate will accelerate after the payout change II. All else equal the firms stock price will go up after the†¦show more content†¦The stocks required return is 14%. What is the intrinsic value of a share today? C. $19.24 22. You purchase one IBM July 120 put contract for a premium of $3. You hold the option until the expiration date when IBM stock sells for $123 per share. You will realize a ______ on the investment. B. $300 loss 23. You sell one Hewlett Packard August 50 call contract and sell one Hewlett Packard August 50 put contract. The call premium is $1.25 and the put premium is $4.50. Your strategy will pay off __________ in August. B. only if the stock price is between $44.25 and $55.75 24. The current stock price of Alcoa is $70 and the stock does not pay dividends. The instantaneous risk free rate of return is 6%. The instantaneous standard deviation of Alcoas stock is 40%. A put option on this stock with an exercise price of $75 and an expiration date 30 days from now. According to the Black-Scholes OPM, you should hold __________ shares of stock per 100 put options to hedge your risk. C. 69 25. A(n) ______ option can only be exercised on the expiration date. D. European 26. At contract maturity the value of a call option is ___________ where X equals the options strike price and ST is the stock price at contract expiration. A. Max(0, ST - X) 27. An Asian call option gives its holder the right to ____________. B. buy the underlying asset at a price determined by the average stock price during some specified portion of the options life 28. AShow MoreRelatedInternational Finance Exam4417 Words  | 18 PagesInternational finance FIN 412 Exam #2 MC: Examples of single-currency interest rate swap and cross-currency interest rate swap are: A. fixed-for-floating rate interest rate swap, where one counterparty exchanges the interest payments of a floating- rate debt obligations for fixed-rate interest payments of the other counter party B. fixed-for-fixed rate debt service (currency swap), where one counterparty exchanges the debt service obligations of a bond denominated in one currency forRead MoreFinance 455 exam Essay1544 Words  | 7 PagesName:__________________________________________________________________ Class:______________________________________ Date:____________________ Finance 455 (9:40 class) Examination 2 Monday, November 4, 2013 9:40 a.m. - 10:55 p.m. 20 Questions 100 points Form (A) 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Use a pencil. The proctor is leaving at 10:55 sharp. Calculators permitted, but no sharing. 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