FIN 3300 Exam 3 Questions with Verified Solutions
Correct 90
100%
Incorrect 0
1 of 90
Term
Electronics Galore has historically had a P/E ratio of 22.1. This ratio is
considered a good estimate of the future ratio. The firm currently has
EPS of $1.78. These earnings are expected to increase by 5.0 percent
next year. What is the expected price of this stock one year from now?
Give this one a try later!
$36.10 −$1,050
$41.30 $.70
Don't know?
, 2 of 90
Term
What is beta?
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a comparison of a stock's price to a measure of a stock's risk
its book value relative to the stock market
average
a measure of a stock's an indicator of a stock's dividend
profitability over time yield stability
Don't know?
3 of 90
Term
You purchased six DJIA index futures at a price of 20,342. The contract
size is $10 times the level of the index. The futures are maturing today
when the price is 20,129. What is the amount of your profit or loss?
Give this one a try later!
$13,000 profit $14,200 profit
, −$12,780 −$11,500 loss
Don't know?
4 of 90
Term
In which of the following steps would a venture capitalist evaluate
potential investment opportunities and ultimately present a letter of
intent to a firm that has requested new funding?
Give this one a try later!
exit value creation
deal flow private placement
Don't know?
, 5 of 90
Term
Precision Engineering recently announced that its next annual dividend
will be $1.20 per share with later dividends increasing by 2.5 percent
annually. What is the current value of this stock to you if you require a
12 percent rate of return?
Give this one a try later!
$12.63 $41.30
$18.27 $12.60
Don't know?
6 of 90
Term
Which one of the following is the strategy of earning risk-free profits
by taking advantage of any unusual differences between cash and
futures prices?
Give this one a try later!
cash-futures arbitrage program trading
Correct 90
100%
Incorrect 0
1 of 90
Term
Electronics Galore has historically had a P/E ratio of 22.1. This ratio is
considered a good estimate of the future ratio. The firm currently has
EPS of $1.78. These earnings are expected to increase by 5.0 percent
next year. What is the expected price of this stock one year from now?
Give this one a try later!
$36.10 −$1,050
$41.30 $.70
Don't know?
, 2 of 90
Term
What is beta?
Give this one a try later!
a comparison of a stock's price to a measure of a stock's risk
its book value relative to the stock market
average
a measure of a stock's an indicator of a stock's dividend
profitability over time yield stability
Don't know?
3 of 90
Term
You purchased six DJIA index futures at a price of 20,342. The contract
size is $10 times the level of the index. The futures are maturing today
when the price is 20,129. What is the amount of your profit or loss?
Give this one a try later!
$13,000 profit $14,200 profit
, −$12,780 −$11,500 loss
Don't know?
4 of 90
Term
In which of the following steps would a venture capitalist evaluate
potential investment opportunities and ultimately present a letter of
intent to a firm that has requested new funding?
Give this one a try later!
exit value creation
deal flow private placement
Don't know?
, 5 of 90
Term
Precision Engineering recently announced that its next annual dividend
will be $1.20 per share with later dividends increasing by 2.5 percent
annually. What is the current value of this stock to you if you require a
12 percent rate of return?
Give this one a try later!
$12.63 $41.30
$18.27 $12.60
Don't know?
6 of 90
Term
Which one of the following is the strategy of earning risk-free profits
by taking advantage of any unusual differences between cash and
futures prices?
Give this one a try later!
cash-futures arbitrage program trading
