Question 1

You run a hotel in Belgium that is owned by an American company. If the Euro strengthens against the dollar, your converted dollar profits will be

Accepted Answer

A) higher. 
B) lower. 
C) the same because we report our profits in Euros. 
D) can't tell from information given. 
A) higher. 
B) lower. 
C) the same because we report our profits in Euros. 
D) can't tell from information given. A

Question 2

What are the three factors that affect the present value of future cash flows?

Accepted Answer

A) timing, magnitude, and size 
B) timing, magnitude, and risk 
C) date cash flows are received, date stock was purchased, and taxes 
D) type of cash flows, size of firm, and amount 
A) timing, magnitude, and size 
B) timing, magnitude, and risk 
C) date cash flows are received, date stock was purchased, and taxes 
D) type of cash flows, size of firm, and amount B

Question 3

You currently hold a bond from Marriott International that pays you 8 percent. If interest rates rise the price of your bond will:

Accepted Answer

A) increase. 
B) decrease. 
C) only decrease if interest rates go above 8 percent. 
D) be unchanged because the price depends on the risk of the company. 
A) increase. 
B) decrease. 
C) only decrease if interest rates go above 8 percent. 
D) be unchanged because the price depends on the risk of the company. B

Question 4

An 81/2 09 bond is currently selling for 102.50. The principal amount is $1,000. The current yield on the bond is

Accepted Answer

A) 8.5 percent. 
B) 9 percent. 
C) 8.29 percent. 
D) none of the above. 
A) 8.5 percent. 
B) 9 percent. 
C) 8.29 percent. 
D) none of the above.

Question 5

Futures contracts only are used with physical commodities.

Accepted Answer

A) True 
 B)False

Question 6

The best way for a large hospitality firm to hedge a price increase in a commodity would be to

Accepted Answer

A) do nothing and hope the price will decrease. 
B) dramatically increase the price on your menu. 
C) buy a futures contract. 
D) buy a lot of the product now from a local purveyor with a lot of cash. 
A) do nothing and hope the price will decrease. 
B) dramatically increase the price on your menu. 
C) buy a futures contract. 
D) buy a lot of the product now from a local purveyor with a lot of cash.

Question 7

When calculating a holding period of return, dividends are excluded.

Accepted Answer

A) True 
 B)False

Question 8

People invest

Accepted Answer

A) to make a lot of money. 
B) so they can buy things now. 
C) to increase future consumption. 
D) to keep up with the times. 
A) to make a lot of money. 
B) so they can buy things now. 
C) to increase future consumption. 
D) to keep up with the times.

Question 9

Insurance companies have decreased their loans to hospitality firms in recent years.

Accepted Answer

A) True 
 B)False

Question 10

A college education can be considered an investment.

Accepted Answer

A) True 
 B)False

Question 11

As interest rates decline, the prices of outstanding bonds rise.

Accepted Answer

A) True 
 B)False

Question 12

A measure of uncertainty in stock returns is

Accepted Answer

A) weighted average. 
B) mean. 
C) correlation coefficient. 
D) standard deviation. 
A) weighted average. 
B) mean. 
C) correlation coefficient. 
D) standard deviation.

Question 13

American hospitality companies really don't have to worry about foreign currency.

Accepted Answer

A) True 
 B)False

Question 14

Financial markets only involve buyers and sellers of financial instruments.

Accepted Answer

A) True 
 B)False

Question 15

Forward contracts are easier to sell than a futures contract.

Accepted Answer

A) True 
 B)False

Question 16

A market maker is someone who works for someone wanting to sell her stock.

Accepted Answer

A) True 
 B)False

Question 17

We measure the uncertainty of an investment by its mean average)return.

Accepted Answer

A) True 
 B)False

Question 18

The first stock issue available to the public is called

Accepted Answer

A) a first sale. 
B) secondary trading. 
C) an IPO. 
D) stock hedging. 
A) a first sale. 
B) secondary trading. 
C) an IPO. 
D) stock hedging.

Question 19

Given a two-year loan of $50,000 and an annual interest rate of 8 percent, how much interest will accrue during the life of the loan? Assume no principal payments during the term.)

Accepted Answer

A) $4,000 
B) $8,000 
C) $400 
D) None of the above 
A) $4,000 
B) $8,000 
C) $400 
D) None of the above

Question 20

A government agency involved in the secondary mortgage market is

Accepted Answer

A) FDIC. 
B) Fannie Mae. 
C) GAO. 
D) IRS. 
A) FDIC. 
B) Fannie Mae. 
C) GAO. 
D) IRS.

You run a hotel in Belgium that is owned by an American company. If the Euro strengthens against the dollar, your converted dollar profits will be

What are the three factors that affect the present value of future cash flows?

You currently hold a bond from Marriott International that pays you 8 percent. If interest rates rise the price of your bond will:

An 81/2 09 bond is currently selling for 102.50. The principal amount is $1,000. The current yield on the bond is

Futures contracts only are used with physical commodities.

The best way for a large hospitality firm to hedge a price increase in a commodity would be to

When calculating a holding period of return, dividends are excluded.

People invest

Insurance companies have decreased their loans to hospitality firms in recent years.

A college education can be considered an investment.

As interest rates decline, the prices of outstanding bonds rise.

A measure of uncertainty in stock returns is

American hospitality companies really don't have to worry about foreign currency.

Financial markets only involve buyers and sellers of financial instruments.

Forward contracts are easier to sell than a futures contract.

A market maker is someone who works for someone wanting to sell her stock.

We measure the uncertainty of an investment by its mean average)return.

The first stock issue available to the public is called

Given a two-year loan of $50,000 and an annual interest rate of 8 percent, how much interest will accrue during the life of the loan? Assume no principal payments during the term.)

A government agency involved in the secondary mortgage market is

Introduction

Review of Financial Statements and Selected Ratios

The Relationship Between Risk and Return

Time Value of Money

Fixed Income Securities: Bonds and Preferred Stock

Common Stock

Cost of Capital

Introduction to Capital Budgeting and Cash Flow Estimation

Capital Budgeting Decision Methods

An Introduction to Hotel Valuation

Capital Structure

Filters

Exam 2: Financial Markets and Financial Instruments

You run a hotel in Belgium that is owned by an American company. If the Euro strengthens against the dollar, your converted dollar profits will be

What are the three factors that affect the present value of future cash flows?

You currently hold a bond from Marriott International that pays you 8 percent. If interest rates rise the price of your bond will:

An 81/2 09 bond is currently selling for 102.50. The principal amount is $1,000. The current yield on the bond is

Futures contracts only are used with physical commodities.

The best way for a large hospitality firm to hedge a price increase in a commodity would be to

When calculating a holding period of return, dividends are excluded.

People invest

Insurance companies have decreased their loans to hospitality firms in recent years.

A college education can be considered an investment.

As interest rates decline, the prices of outstanding bonds rise.

A measure of uncertainty in stock returns is

American hospitality companies really don't have to worry about foreign currency.

Financial markets only involve buyers and sellers of financial instruments.

Forward contracts are easier to sell than a futures contract.

A market maker is someone who works for someone wanting to sell her stock.

We measure the uncertainty of an investment by its mean average)return.

The first stock issue available to the public is called

Given a two-year loan of $50,000 and an annual interest rate of 8 percent, how much interest will accrue during the life of the loan? Assume no principal payments during the term.)

A government agency involved in the secondary mortgage market is

Introduction

Review of Financial Statements and Selected Ratios

The Relationship Between Risk and Return

Time Value of Money

Fixed Income Securities: Bonds and Preferred Stock

Common Stock

Cost of Capital

Introduction to Capital Budgeting and Cash Flow Estimation

Capital Budgeting Decision Methods

An Introduction to Hotel Valuation

Capital Structure

Filters