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FINA 3313 EXAM 1 2026
ACTUAL QUESTIONS WITH
VERIFIED ANSWERS.
1. Negative Value for External Financing Required - correct
answer-indicates that, based on its plans, the firm will
generate MORE financing internally than it needs to forecast
growth in assets
2. Nominal Rate of Interest - correct answer-the actual interest
charged by the supplier of funds and paid by the demander
3. Inflation Premium (IP) - correct answer-the additional return
that investors require to compensate them for inflation
4. Yield Curve - correct answer-a graphical depiction of the
term structure of interest rates
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5. Term Structure of Interest Rates - correct answer-relationship
between the maturity and rate of return for bonds with similar
levels of risk
6. Yield to Maturity (YTM) - correct answer-compound annual
rate of return earned on a debt security purchased on a
given day and held to maturity
7. Expectations Theory - correct answer-the yield curve reflects
investor expectations
8. Liquidity Preference Theory - correct answer-suggests that
LT rates are higher than ST rates (upward sloping) because
investors perceive that ST investments to be more liquid and
less risky than LT investments
9. Market Segmentation Theory - correct answer-suggest that
the market for loans is segmented on the basis of maturity
and that the supply of and demand for loans within each
segment determine its prevailing interest rate
FINA 3313 EXAM 1 2026
ACTUAL QUESTIONS WITH
VERIFIED ANSWERS.
1. Negative Value for External Financing Required - correct
answer-indicates that, based on its plans, the firm will
generate MORE financing internally than it needs to forecast
growth in assets
2. Nominal Rate of Interest - correct answer-the actual interest
charged by the supplier of funds and paid by the demander
3. Inflation Premium (IP) - correct answer-the additional return
that investors require to compensate them for inflation
4. Yield Curve - correct answer-a graphical depiction of the
term structure of interest rates
, Page | 2
5. Term Structure of Interest Rates - correct answer-relationship
between the maturity and rate of return for bonds with similar
levels of risk
6. Yield to Maturity (YTM) - correct answer-compound annual
rate of return earned on a debt security purchased on a
given day and held to maturity
7. Expectations Theory - correct answer-the yield curve reflects
investor expectations
8. Liquidity Preference Theory - correct answer-suggests that
LT rates are higher than ST rates (upward sloping) because
investors perceive that ST investments to be more liquid and
less risky than LT investments
9. Market Segmentation Theory - correct answer-suggest that
the market for loans is segmented on the basis of maturity
and that the supply of and demand for loans within each
segment determine its prevailing interest rate
