FIN 302 ASU EXAM QUESTIONS ANSWERED CORRECTLY LATEST UPDATE 2026

FIN 302 ASU EXAM QUESTIONS ANSWERED CORRECTLY LATEST UPDATE 2026 Double Taxation of C Corporations - Answers C Corporation pays corporate tax on profits and shareholders pay personal tax on dividends Percentage of Stock Trades Done Electronically - Answers Over 90% are done electronically by computers/algorithms Goal Of C Corp Managers - Answers Maximize shareholder wealth by maximizing stock price Executive Stock Options - Answers Compensation giving managers the right to buy stock at a fixed price to align incentives with shareholders Primary Market - Answers Market where new securities are issued and the firm receives the money Secondary Market - Answers Market where investors trade existing securities and the firm does not receive money Money Market - Answers Market for short-term debt securities (less than 1 year) Capital Market - Answers Market for long term securities (stock and bonds over 1 year) Federal Corporate Tax Rate - Answers 21% Sources of Cash - Answers Decrease in assets or increase in liabilities/equity Uses of Cash - Answers Increase in assets or decrease in liabilities/equity Cash Flow from Operations (CFO) - Answers Net Income + Depreciation - Change in Net Working Capital Dupont Roe Formula - Answers (Net Income/Revenue) x (Revenue/Assets) x (Assets/SE) Current Ratio - Answers Current Assets/Current Liabilities Quick Ratio - Answers (Current Assets - Inventory) / Current Liabilities Debt Ratio - Answers Total Debt/Total Assets Debt to Equity Ratio - Answers Debt/Equity Return on Assets (ROA) - Answers Net Income/Total Assets Return on Equity (ROE) - Answers Net Income/Equity Profit Margin - Answers Net Income/Sales Asset Turnover - Answers Sales/Assets Inventory Turnover - Answers COGS/Inventory Future Value (1 Payment) - Answers FV = PV(1+r)^t Present Value (1 Payment) - Answers PV = FV / (1+r)^t Future Value of an Annuity - Answers FV = PMT[(1+r)^t - 1] / r Present Value of an Annuity - Answers PV = PMT[1 - (1+r)^-t] / r Loan Payment Formula - Answers PMT = PV[r / (1 - (1+r)^-t)] Interest Portion of Payment - Answers Beginning Balance x r Principal Portion of Payment - Answers Payment - Interest Unpaid Loan Balance - Answers Present Value of Remaining Payments Effective Annual Rate (EAR) - Answers (1 + APR/m)^m - 1 Percent Return - Answers (Ending Value - Beginning Value + Dividends) / Beginning Value Rule of 72 - Answers Years to double = 72 / interest rate Normal Distribution 68-95-99.7 Rule - Answers 68% within 1 STD DEV; 95% within 2 STD DEV; 99.7% within 3 STD DEV What is the relationship between Geometric ROR and Arithmetic ROR - Answers Arithmetic ROR is always greater than Geometric ROR Portfolio Standard Deviation Formula - Answers √[w1²σ1² + w2²σ2² + 2w1w2σ1σ2ρ] p = correlation (will be 0 or 1 on quiz) W = weight (ex. 1/2 in notes) Correlation - Answers Measures how two assets move together (ranges from -1 to 1) CAPM Formula - Answers Required Return = rf + BETA(rm - rf) BETA - Answers Measures systematic risk relative to the market (BETA 1 means the stock is more volatile than the market; BETA 1 means the stock is less volatile than the market) Bond Rating - Answers Measure of default risk; lower rating means higher yield to maturity required Bond Pricing - Answers Price = PV of coupons + PV of face value Premium Bond - Answers Coupon rate YTM, price above par Discount Bond - Answers Coupon rate YTM, price below par Yield to Maturity (YTM) - Answers Return if bond is held to maturity Holding Period Yield - Answers (Income + Price Change) / Purchase Price Fisher Effect - Answers Nominal Rate (roughly)= Real rate + Inflation rate Inflation Protected Bonds (TIPS) - Answers Bonds adjusted for inflation to protect purchasing power Maturity and Interest Rate Risk - Answers Longer maturity bonds are more sensitive to interest rate changes Historical AVG Large Cap Stock Return (1926 - Present) - Answers About 7% annually for large stocks