1
FINA-3315 Exam 2 2026-Questions
And Correct Answers
NAICS Codes - correct-answer -Classification of firms into industry groups using
numerical codes to identify industries.
Peak - correct-answer -The transition point between recession and recovery.
Sector Rotation - correct-answer -An investment strategy that entails shifting the
portfolio into industry sectors that are expected to outperform others based on
macroeconomic forecasts.
Supply Shock - correct-answer -An event that influences production capacity and
costs in the economy.
Trough - correct-answer -The transition point between recession and recovery.
, 2
Unemployment Rate - correct-answer -The ratio of the number of people
classified as unemployed to the total labor force.
Book Value - correct-answer -The net worth of common equity according to a
firm's balance sheet.
Liquidation Value - correct-answer -Net amount that can be realized by selling the
assets of a firm and paying off the debt.
Replacement Cost - correct-answer -Cost to replace a firm's assets.
Tobin's q - correct-answer -Ratio of market value of the firm to replacement cost.
Intrinsic Value - correct-answer -The present value of a firm's expected future net
cash flows discounted by the required rate of return.
Market Capitalization Rate - correct-answer -The market-consensus estimate of
the appropriate discount rate for a firm's cash flows.
, 3
Dividend Payout Ratio - correct-answer -Percentage of earnings paid out as
dividends.
Plowback Ratio or Earnings Retention Ratio - correct-answer -The proportion of
the firm's earnings that is reinvested in the business (and not paid out as
dividends).
Present Value of Growth Opportunities (PVGO) - correct-answer -Net present
value of a firm's future investments.
Two-Stage DDM - correct-answer -Dividend discount model in which dividend
growth is assumed to level off only at some future date.
Price-Earning Multiple - correct-answer -The ratio of a stock's price to its earnings
per share.
PEG Ratio - correct-answer -Ratio of P/E multiple to earnings growth rate.
FINA-3315 Exam 2 2026-Questions
And Correct Answers
NAICS Codes - correct-answer -Classification of firms into industry groups using
numerical codes to identify industries.
Peak - correct-answer -The transition point between recession and recovery.
Sector Rotation - correct-answer -An investment strategy that entails shifting the
portfolio into industry sectors that are expected to outperform others based on
macroeconomic forecasts.
Supply Shock - correct-answer -An event that influences production capacity and
costs in the economy.
Trough - correct-answer -The transition point between recession and recovery.
, 2
Unemployment Rate - correct-answer -The ratio of the number of people
classified as unemployed to the total labor force.
Book Value - correct-answer -The net worth of common equity according to a
firm's balance sheet.
Liquidation Value - correct-answer -Net amount that can be realized by selling the
assets of a firm and paying off the debt.
Replacement Cost - correct-answer -Cost to replace a firm's assets.
Tobin's q - correct-answer -Ratio of market value of the firm to replacement cost.
Intrinsic Value - correct-answer -The present value of a firm's expected future net
cash flows discounted by the required rate of return.
Market Capitalization Rate - correct-answer -The market-consensus estimate of
the appropriate discount rate for a firm's cash flows.
, 3
Dividend Payout Ratio - correct-answer -Percentage of earnings paid out as
dividends.
Plowback Ratio or Earnings Retention Ratio - correct-answer -The proportion of
the firm's earnings that is reinvested in the business (and not paid out as
dividends).
Present Value of Growth Opportunities (PVGO) - correct-answer -Net present
value of a firm's future investments.
Two-Stage DDM - correct-answer -Dividend discount model in which dividend
growth is assumed to level off only at some future date.
Price-Earning Multiple - correct-answer -The ratio of a stock's price to its earnings
per share.
PEG Ratio - correct-answer -Ratio of P/E multiple to earnings growth rate.
