Question 1

The financial statements of Black Barn Company are given below  
-Refer to the financial statements of Black Barn Company.The firm's market to book value for 2009 is _____.

Accepted Answer

A) 1.13 
B) 1.62 
C) 1.00 
D) 1.26 
E) none of the above 
A) 1.13 
B) 1.62 
C) 1.00 
D) 1.26 
E) none of the above

Question 2

The financial statements of Snapit Company are given below.  
-Refer to the financial statements of Snapit Company.The firm's asset turnover ratio for 2009 is _____.

Accepted Answer

A) 1.60 
B) 3.16 
C) 3.31 
D) 4.64 
E) none of the above 
A) 1.60 
B) 3.16 
C) 3.31 
D) 4.64 
E) none of the above

Question 3

Fundamental analysis uses __________.

Accepted Answer

A) earnings and dividends prospects 
B) relative strength 
C) price momentum 
D) A and B 
E) A and C 
A) earnings and dividends prospects 
B) relative strength 
C) price momentum 
D) A and B 
E) A and C

Question 4

The financial statements of Midwest Tours are given below.  
-Refer to the financial statements of Midwest Tours.The firm's return on sales ratio for 2009 is __________ percent.

Accepted Answer

A) 20.2 
B) 21.6 
C) 22.4 
D) 18.0 
E) none of the above 
A) 20.2 
B) 21.6 
C) 22.4 
D) 18.0 
E) none of the above

Question 5

One problem with comparing financial ratios prepared by different reporting agencies is

Accepted Answer

A) some agencies receive financial information later than others. 
B) agencies vary in their policies as to what is included in specific calculations. 
C) some agencies are careless in their reporting. 
D) some firms are more conservative in their accounting practices. 
E) none of the above. 
A) some agencies receive financial information later than others. 
B) agencies vary in their policies as to what is included in specific calculations. 
C) some agencies are careless in their reporting. 
D) some firms are more conservative in their accounting practices. 
E) none of the above.

Question 6

The financial statements of Snapit Company are given below.  
-Refer to the financial statements of Snapit Company.The firm's return on equity ratio for 2009 is ________.

Accepted Answer

A) 0.1235 
B) 0.0296 
C) 0.2960 
D) 2.2960 
E) none of the above 
A) 0.1235 
B) 0.0296 
C) 0.2960 
D) 2.2960 
E) none of the above

Question 7

The financial statements of Snapit Company are given below.  
-Refer to the financial statements of Snapit Company.The firm's return on sales ratio for 2009 is ________.

Accepted Answer

A) 0.0133 
B) 0.1325 
C) 1.325 
D) 1.260 
E) none of the above 
A) 0.0133 
B) 0.1325 
C) 1.325 
D) 1.260 
E) none of the above

Question 8

Proceeds from a company's sale of stock to the public are included in ________.

Accepted Answer

A) par value 
B) additional paid-in capital 
C) retained earnings 
D) A and B 
E) A,B,and C 
A) par value 
B) additional paid-in capital 
C) retained earnings 
D) A and B 
E) A,B,and C

Question 9

The financial statements of Midwest Tours are given below.  
-Refer to the financial statements of Midwest Tours.The firm's market to book value for 2009 is __________.

Accepted Answer

A) 0.24 
B) 0.95 
C) 0.71 
D) 1.12 
E) none of the above 
A) 0.24 
B) 0.95 
C) 0.71 
D) 1.12 
E) none of the above

Question 10

Common size balance sheets make it easier to compare firms ____________.

Accepted Answer

A) with different degree of leverage 
B) of different sizes 
C) in different industries 
D) that use different inventory valuation methods (FIFO vs.LIFO) 
E) none of the above 
A) with different degree of leverage 
B) of different sizes 
C) in different industries 
D) that use different inventory valuation methods (FIFO vs.LIFO) 
E) none of the above

Question 11

__________ a snapshot of the financial condition of the firm at a particular time.

Accepted Answer

A) The balance sheet provides 
B) The income statement provides 
C) The statement of cash flows provides 
D) All of the above provide 
E) None of the above provides 
A) The balance sheet provides 
B) The income statement provides 
C) The statement of cash flows provides 
D) All of the above provide 
E) None of the above provides

Question 12

The financial statements of Midwest Tours are given below.  
-Refer to the financial statements of Midwest Tours.The firm's average collection period for 2009 is __________.

Accepted Answer

A) 69.35 
B) 69.73 
C) 68.53 
D) 67.77 
E) 68.52 
A) 69.35 
B) 69.73 
C) 68.53 
D) 67.77 
E) 68.52

Question 13

A firm's current ratio is above the industry average; however,the firm's quick ratio is below the industry average.These ratios suggest that the firm _________.

Accepted Answer

A) has relatively more total current assets and even more inventory than other firms in the industry 
B) is very efficient at managing inventories 
C) has liquidity that is superior to the average firm in the industry 
D) is near technical insolvency 
E) none of the above 
A) has relatively more total current assets and even more inventory than other firms in the industry 
B) is very efficient at managing inventories 
C) has liquidity that is superior to the average firm in the industry 
D) is near technical insolvency 
E) none of the above

Question 14

The financial statements of Black Barn Company are given below  
-Refer to the financial statements of Black Barn Company.The firm's asset turnover ratio for 2009 is _____.

Accepted Answer

A) 1.79 
B) 1.63 
C) 1.34 
D) 2.58 
E) none of the above 
A) 1.79 
B) 1.63 
C) 1.34 
D) 2.58 
E) none of the above

Question 15

The financial statements of Black Barn Company are given below  
-Refer to the financial statements of Black Barn Company.The firm's fixed asset turnover ratio for 2009 is _____.

Accepted Answer

A) 2.04 
B) 2.58 
C) 2.97 
D) 1.58 
E) none of the above 
A) 2.04 
B) 2.58 
C) 2.97 
D) 1.58 
E) none of the above

Question 16

Which of the following ratios gives information on the amount of profits reinvested in the firm over the years?

Accepted Answer

A) Sales/total assets 
B) Debt/total assets 
C) Debt/equity 
D) Retained earnings/total assets 
E) None of the above 
A) Sales/total assets 
B) Debt/total assets 
C) Debt/equity 
D) Retained earnings/total assets 
E) None of the above

Question 17

A firm has a higher asset turnover ratio than the industry average,which implies

Accepted Answer

A) the firm has a higher P/E ratio than other firms in the industry. 
B) the firm is more likely to avoid insolvency in the short run than other firms in the industry. 
C) the firm is more profitable than other firms in the industry. 
D) the firm is utilizing assets more efficiently than other firms in the industry. 
E) the firm has higher spending on new fixed assets than other firms in the industry. 
A) the firm has a higher P/E ratio than other firms in the industry. 
B) the firm is more likely to avoid insolvency in the short run than other firms in the industry. 
C) the firm is more profitable than other firms in the industry. 
D) the firm is utilizing assets more efficiently than other firms in the industry. 
E) the firm has higher spending on new fixed assets than other firms in the industry.

Question 18

The financial statements of Midwest Tours are given below.  
-Refer to the financial statements of Midwest Tours.The firm's times interest earned ratio for 2009 is __________.

Accepted Answer

A) 2.897 
B) 2.719 
C) 3.375 
D) 3.462 
E) none of the above 
A) 2.897 
B) 2.719 
C) 3.375 
D) 3.462 
E) none of the above

Question 19

The financial statements of Snapit Company are given below.  
-Refer to the financial statements of Snapit Company.The firm's leverage ratio for 2009 is _________.

Accepted Answer

A) 2.25 
B) 3.53 
C) 2.61 
D) 3.06 
E) none of the above 
A) 2.25 
B) 3.53 
C) 2.61 
D) 3.06 
E) none of the above

Question 20

Common size income statements make it easier to compare firms ____________.

Accepted Answer

A) that use different inventory valuation methods (FIFO vs.LIFO) 
B) in different industries 
C) with different degree of leverage 
D) of different sizes 
E) none of the above 
A) that use different inventory valuation methods (FIFO vs.LIFO) 
B) in different industries 
C) with different degree of leverage 
D) of different sizes 
E) none of the above

Exam 19: Futures Markets

The financial statements of Black Barn Company are given below -Refer to the financial statements of Black Barn Company.The firm's market to book value for 2009 is _____.

The financial statements of Snapit Company are given below. -Refer to the financial statements of Snapit Company.The firm's asset turnover ratio for 2009 is _____.

Fundamental analysis uses __________.

The financial statements of Midwest Tours are given below. -Refer to the financial statements of Midwest Tours.The firm's return on sales ratio for 2009 is __________ percent.

One problem with comparing financial ratios prepared by different reporting agencies is

The financial statements of Snapit Company are given below. -Refer to the financial statements of Snapit Company.The firm's return on equity ratio for 2009 is ________.

The financial statements of Snapit Company are given below. -Refer to the financial statements of Snapit Company.The firm's return on sales ratio for 2009 is ________.

Proceeds from a company's sale of stock to the public are included in ________.

The financial statements of Midwest Tours are given below. -Refer to the financial statements of Midwest Tours.The firm's market to book value for 2009 is __________.

Common size balance sheets make it easier to compare firms ____________.

__________ a snapshot of the financial condition of the firm at a particular time.

The financial statements of Midwest Tours are given below. -Refer to the financial statements of Midwest Tours.The firm's average collection period for 2009 is __________.

A firm's current ratio is above the industry average; however,the firm's quick ratio is below the industry average.These ratios suggest that the firm _________.

The financial statements of Black Barn Company are given below -Refer to the financial statements of Black Barn Company.The firm's asset turnover ratio for 2009 is _____.

The financial statements of Black Barn Company are given below -Refer to the financial statements of Black Barn Company.The firm's fixed asset turnover ratio for 2009 is _____.

Which of the following ratios gives information on the amount of profits reinvested in the firm over the years?

A firm has a higher asset turnover ratio than the industry average,which implies

The financial statements of Midwest Tours are given below. -Refer to the financial statements of Midwest Tours.The firm's times interest earned ratio for 2009 is __________.

The financial statements of Snapit Company are given below. -Refer to the financial statements of Snapit Company.The firm's leverage ratio for 2009 is _________.

Common size income statements make it easier to compare firms ____________.

The Investment Environment

Asset Classes and Financial Instruments

How Securities are Traded

Mutual Funds and Other Investment Companies

Introduction to Risk,return,and the Historical Record

Risk Aversion and Capital Allocation to Risky Assets

Optimal Risky Portfolios

Index Models

The Capital Asset Pricing Model

Arbitrage Pricing Theory and Multifactor Models of Risk and Return

The Efficient Market Hypothesis

Behavioral Finance and Technical Analysis

Empirical Evidence on Security Returns

Bond Prices and Yields

The Term Structure of Interest Rates

Managing Bond Portfolios

Options Markets: Introduction

Option Valuation

Futures, swaps, and Risk Management

Macroeconomic and Industry Analysis

Equity Valuation Models

Financial Statement Analysis

Portfolio Performance Evaluation

International Diversification

Hedge Funds

The Theory of Active Portfolio Management

Investment Policy and the Framework of the CFA Institute Appendices

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