SU MBA6010 All Weeks Knowledge Checks Latest 2019 JUNE

MBA6010 Managerial Finance

Week 1 Knowledge Check

Question 1 Asset management ratios measure how effectively a firm is managing its assets.

Question 1 options:

True

False

Question 2 The financial report that measures a firm’s position at a point in time is called the Income Statement.

Question 2 options:

True

False

Question 3 The extent to which a firm uses debt financing is called financial leverage.

Question 3 options:

True

False

Question 4 The ratio of total assets to total debt is called the debt ratio.

Question 4 options:

True

False

Question 5 The ratio of net income to common equity measures is called the ROE.

Question 5 options:

True

False

MBA6010 Managerial Finance

Week 2 Knowledge Check

Question 1 If a bond is selling above par, then the coupon rate must be higher than the markets for new bonds.

Question 1 options:

True

False

Question 2 If you purchased a bond that was callable and it was called, you would have the option to keep it until maturity.

Question 2 options:

True

False

Question 3 The value of a share of common stock is a function of the dividends expected and the possible price appreciation.

Question 3 options:

True

False

Question 4 One of the most important reasons for stockholders to have the preemptive right is to protect them against dilution.

Question 4 options:

True

False

Question 5 Preferred stock is a mixture of debt and equity.

Question 5 options:

True

False

MBA6010 Managerial Finance

Week 3 Knowledge Check

Question 1 The before tax cost of debt is used to calculate the WACC.

Question 1 options:

True

False

Question 2 The two sources of equity capital are debt and preferred stock.

Question 2 options:

True

False

Question 3 Market risk on a project is measured by its effect on the beta coefficient.

Question 3 options:

True

False

Question 4 The cost of common equity is the rate of return by the firm’s stockholders.

Question 4 options:

True

False

Question 5 The best proxy for the risk free rate of return is the rate on Treasury bonds.

Question 5 options:

True

False

MBA6010 Managerial Finance

Week 4 Knowledge Check

Question 1 Some degree of risk is present in all investment opportunities.

Question 1 options:

True

False

Question 2 Beta measures the responsiveness of a security to movements in the market portfolio.

Question 2 options:

True

False

Question 3 The expected return on the market is the sum of the risk-free rate plus some compensation for the risk inherent in the market portfolio.

Question 3 options:

True

False

Question 4 The expected return on a security is positively (and linearly) related to the security’s beta.

Question 4 options:

True

False

Question 5 A diversified portfolio can eliminate the risk of the individual securities.

Question 5 options:

True

False

MBA6010 Managerial Finance

Week 5 Knowledge Check

Question 1 A basic premise in finance is to collect cash as soon as possible and delay payments as long as possible.

Question 1 options:

True

False

Question 2 Holding significant cash balances is an important tool in corporate financial management.

Question 2 options:

True

False

Question 3 Working capital can be defined as current assets less current liabilities.

Question 3 options:

True

False

Question 4 A cycle of cash inflows and outflows is known as the operating cycle.

Question 4 options:

True

False

Question 5 The time it takes for a company to buy raw materials, convert them into saleable products, and then sell those products is the inventory conversion period.

Question 5 options:

True

False