©GRACEAMELIA 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED
FIRST PUBLISH OCTOBER 2024
FIN 470 Final Exam Study Guide
Solutions
Investment Bankers - Ans:✔✔-Specialize in helping companies raise capital by selling securities
Land, machines, and knowledge - Ans:✔✔-Are real assets
Secondary - Ans:✔✔-Investors trade previously issued securities in the ________ market(s)
Agency Problem - Ans:✔✔-The ____________ refers to the potential conflict between management and
shareholders
TED Spread - Ans:✔✔-The spread between the LIBOR and the Treasury-bill rate is called the
Glass-Stegall - Ans:✔✔-Until 1999, the ________ Act(s) prohibited banks in the United States from both
accepting deposits and underwriting securities
Financial - Ans:✔✔-Commercial banks differ from other businesses in that both their assets and their
liabilities are mostly
A call option on Intel stock and a commodity futures contract. - Ans:✔✔-An example of a derivative
security is
Page 1/11
, ©GRACEAMELIA 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED
FIRST PUBLISH OCTOBER 2024
The product has reached full potential, profit margins are narrower, and producers are forced to
compete on price to a greater extent - Ans:✔✔-In the maturity stage of the industry life cycle,
It is difficult to predict which firms will succeed and which firms will fail, and industry growth is very
rapid - Ans:✔✔-In the start-up stage of the industry life cycle,
Fundamental Analysis - Ans:✔✔-The process of estimating the dividends and earnings that can be
expected from the firm based on determinants of value is called
The automobile industry - Ans:✔✔-An example of a highly cyclical industry is
Threat of entry and rivalry between existing competitors. - Ans:✔✔-A variety of factors relating to
industry structure affect the performance of the firm, including
expanding; ample - Ans:✔✔-A rapidly growing GDP indicates a(n) ______ economy with ______
opportunity for a firm to increase sales
stagnant or shrinking; little - Ans:✔✔-A declining GDP indicates a(n) ______ economy with ______
opportunity for a firm to increase sales
Smaller decreases in profits than firms with high operating leverage - Ans:✔✔-If the economy is
shrinking, firms with low operating leverage will experience
Consolidation stage - Ans:✔✔-The life cycle stage in which industry leaders are likely to emerge is the
Page 2/11
FIRST PUBLISH OCTOBER 2024
FIN 470 Final Exam Study Guide
Solutions
Investment Bankers - Ans:✔✔-Specialize in helping companies raise capital by selling securities
Land, machines, and knowledge - Ans:✔✔-Are real assets
Secondary - Ans:✔✔-Investors trade previously issued securities in the ________ market(s)
Agency Problem - Ans:✔✔-The ____________ refers to the potential conflict between management and
shareholders
TED Spread - Ans:✔✔-The spread between the LIBOR and the Treasury-bill rate is called the
Glass-Stegall - Ans:✔✔-Until 1999, the ________ Act(s) prohibited banks in the United States from both
accepting deposits and underwriting securities
Financial - Ans:✔✔-Commercial banks differ from other businesses in that both their assets and their
liabilities are mostly
A call option on Intel stock and a commodity futures contract. - Ans:✔✔-An example of a derivative
security is
Page 1/11
, ©GRACEAMELIA 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED
FIRST PUBLISH OCTOBER 2024
The product has reached full potential, profit margins are narrower, and producers are forced to
compete on price to a greater extent - Ans:✔✔-In the maturity stage of the industry life cycle,
It is difficult to predict which firms will succeed and which firms will fail, and industry growth is very
rapid - Ans:✔✔-In the start-up stage of the industry life cycle,
Fundamental Analysis - Ans:✔✔-The process of estimating the dividends and earnings that can be
expected from the firm based on determinants of value is called
The automobile industry - Ans:✔✔-An example of a highly cyclical industry is
Threat of entry and rivalry between existing competitors. - Ans:✔✔-A variety of factors relating to
industry structure affect the performance of the firm, including
expanding; ample - Ans:✔✔-A rapidly growing GDP indicates a(n) ______ economy with ______
opportunity for a firm to increase sales
stagnant or shrinking; little - Ans:✔✔-A declining GDP indicates a(n) ______ economy with ______
opportunity for a firm to increase sales
Smaller decreases in profits than firms with high operating leverage - Ans:✔✔-If the economy is
shrinking, firms with low operating leverage will experience
Consolidation stage - Ans:✔✔-The life cycle stage in which industry leaders are likely to emerge is the
Page 2/11
