Managerial Finance Exam Study Guide

Topics: Bond, Time value of money, Finance Pages: 3 (845 words) Published: June 20, 2013
FI515 – Managerial Finance

Below I have listed some areas for you to review in preparation for the quiz this week.

1.Objective multiple choice question related to advantages and disadvantages of the various forms of organization. Review Chapter 1, pp. 5-8. (TCO A) Review the advantages and disadvantages of the three primary forms of business organization: sole proprietorship, partnership and corporation (liability, tax advantages, etc.) The threaded discussion from Week 1 will also serve as a review for this material. 2.Objective multiple choice question related to the Security Market Line (SML) and risk aversion. Review Chapter 6, pp. 246-253. (TCO C) The slope of the SML is determined by investors’ aversion to risk. The greater the average investor’s risk aversion, the steeper the SML. The threaded discussion from Week 3 should also serve as a review for this material.

3.Problem multiple choice question related to calculations studied in Chapter 5. You will have one of 4 test bank questions covering either real risk free rate, inflation premium, default risk premium, and liquidity premium. Review Chapter 5: real risk free rate, pp. 192-193. inflation premium, p. 193-194; default risk premium, pp. 195-200; liquidity premium, p. 201. (TCO C) Review homework assignments as well as threaded discussion problems from Week 3.

4.Problem multiple choice question related to bond value calculations studied in chapter 5. You will have one of 3 test bank questions covering bond valuation, YTM, or current yield. Review Chapter 5: bond valuation, pp. 180-184; YTM and current yield, pp. 188-191. (TCO D) Review homework assignments as well as threaded discussion problems from Week 3. 5.Objective multiple choice question related to bond yields. Review Chapter 5, pp. 188-191. (TCO D)

A 10-year corporate bond has an annual coupon payment of 9%. The bond is currently selling at par ($1,000). Which of the following statements is most...
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