Miss
Examination Paper
Sample Exam 1 Guide Answers
4190 BUSINESS FINANCE II
CORPFIN 2006
PLEASE SEE NEXT PAGE
(CORPFIN 2006) SECTION A: Multiple Choice
Page 2 of EIGHT Pages
(Each question is worth 1 mark- select the answer you believe most correct. Answer these questions in the exam booklet, not on this paper)
A.1
Which of the following statements with regards to mortgage loans is false? (a) (b) (c) (d) Mortgage loans are usually made on a credit foncier basis. A ‘balloon’ payment may be necessary at maturity. Most life insurance companies specify a minimum amount for mortgage finance, usually upwards of $200,000. The main source of mortgage finance for companies has traditionally been superannuation funds.
A.2
A non-bank bill may be more difficult to discount than a bank bill because: (a) (b) (c) (d) the interest rate is recalculated each time a new bill is issued. bank bills are regarded as inferior quality. of the cost of the bill facility. the financial stature of the acceptor or endorser is not well regarded.
A.3
Which of the following is the least correct? (a) (b) (c) ‘Trade credit’ refers to credit sales made to other businesses whilst ‘consumer credit’ refers to credit sales made to individuals. ‘Consumer credit’ may require the customer to pay a service fee but for ‘trade credit’ this would be unusual. A business purchasing goods on credit is likely to be offered trade credit ‘on open account’, whereas an individual is likely to enter into a credit agreement which is likely to require regular repayment of an agreed amount. Trade credit’ normally applies to the retail industry, whereas ‘consumer credit’ strictly applies to service industries.
(d)
A.4
Share prices of companies paying franked dividends: (a) (b) (c) (d) should have increased since the introduction of dividend imputation because overseas residents would have sold this type of shares. should have increased since the introduction of dividend imputation
Sample Exam 1 Guide Answers
4190 BUSINESS FINANCE II
CORPFIN 2006
PLEASE SEE NEXT PAGE
(CORPFIN 2006) SECTION A: Multiple Choice
Page 2 of EIGHT Pages
(Each question is worth 1 mark- select the answer you believe most correct. Answer these questions in the exam booklet, not on this paper)
A.1
Which of the following statements with regards to mortgage loans is false? (a) (b) (c) (d) Mortgage loans are usually made on a credit foncier basis. A ‘balloon’ payment may be necessary at maturity. Most life insurance companies specify a minimum amount for mortgage finance, usually upwards of $200,000. The main source of mortgage finance for companies has traditionally been superannuation funds.
A.2
A non-bank bill may be more difficult to discount than a bank bill because: (a) (b) (c) (d) the interest rate is recalculated each time a new bill is issued. bank bills are regarded as inferior quality. of the cost of the bill facility. the financial stature of the acceptor or endorser is not well regarded.
A.3
Which of the following is the least correct? (a) (b) (c) ‘Trade credit’ refers to credit sales made to other businesses whilst ‘consumer credit’ refers to credit sales made to individuals. ‘Consumer credit’ may require the customer to pay a service fee but for ‘trade credit’ this would be unusual. A business purchasing goods on credit is likely to be offered trade credit ‘on open account’, whereas an individual is likely to enter into a credit agreement which is likely to require regular repayment of an agreed amount. Trade credit’ normally applies to the retail industry, whereas ‘consumer credit’ strictly applies to service industries.
(d)
A.4
Share prices of companies paying franked dividends: (a) (b) (c) (d) should have increased since the introduction of dividend imputation because overseas residents would have sold this type of shares. should have increased since the introduction of dividend imputation