ETS Business Exam Study Guide Questions And Answers
Verified 100% Correct
Finance: The more frequent the compounding, the higher the future value, other things
being equal - ANSWER True
Finance: For a given amount, the lower the discount rate, the less the present value -
ANSWER False
Finance: Under which of the following conditions will a future value calculated with
simple interest exceed a future value calculated with compound interest at the same
rate? - ANSWER This is not possible with positive interest rates
Finance: A level stream of cash payments that continues indefinitely is known as a
perpetuity; one that continues for a limited number of years is called an annuity. What
type of statement is this? - ANSWER Regarding present and future values of streams
of cash payments
Finance: The decision rule for net present value is to - ANSWER Accept all projects with
positive net present values
Finance: One comes reason for issuing 2 distinct classes of common stock is to -
ANSWER restrict voting privileges from some shareholders
Finance: Treasury bills have a beta of zero? - ANSWER True
Finance: As the coupon rate of a bond increases, the bonds' - ANSWER interest
payments increase
Finance: If a stock's P/E ratio is 13.5 at a time when earning $3 per year, what is the
stock's current price? - ANSWER $40.50 (13.5 * 3)
Finance: What are the 3 service/ product provided to corporations by financial markets
and institutions? - ANSWER Valuation of the company, financing, and contracts to
manage risk
Finance: Cost of capital is the return investors could expect - ANSWER True
Finance: A firm's mixture of long term financing and equity financing is called... -
ANSWER Capital structure
, Finance: The weighted average cost of capital is adjusted for tax savings - ANSWER
True
Finance: If there is a total of $800 on the balance sheet and long term bonds account
for $200, what is the weighted percentage that the long term bonds hold? - ANSWER
25% (200/800= .25 *100)
Finance: Financial statement analysis is assuming relationships between the items of
the balance sheet and the profit and loss account - ANSWER True
Finance: You've been saving up to buy the Godot Company. The total cost will be $10
million. You currently have about $2.3 million. If you can earn 5% on your money, how
long will you wait? - ANSWER 20 million
Finance: What is an example of perpetuity? - ANSWER $10,000 annual payments from
a trust fund forever
Law: It requires proof of breach of a statutory or common-law duty. is an example of? -
ANSWER Tort of negligence
Law: What is not true when it regards a seller's rights to reduce legal liability in the sale
on non-comsusmer goods? - ANSWER The seller can disclaim all implied warranties
by simply stating that there are no implied warranties.
Law: The establishment clause holds that - ANSWER The government cannot pass
laws that promote religion or show preference for one religion over another.
Law: If an injured party entered into an activity with knowledge that it may be dangerous
and voluntarily assumed that risk, which defense to the tort of negligence might be
asserted? - ANSWER Assumption of risk
Law: In order to assert a design defect, a plaintiff might be able to show that a
reasonable alternative design was available and that the defendant's failure to adopt
the alternative design rendered the product unreasonably dangerous. - ANSWER True
Law: The Sherman act protect consumers from? - ANSWER Trade and commerce
against unlawful restraints and monopolies
Law: Violations of OSHA can result in (3) - ANSWER criminal penalties, fines, and
termination
Law: Fair debt collection practices protect consumers from - ANSWER being harassed
Verified 100% Correct
Finance: The more frequent the compounding, the higher the future value, other things
being equal - ANSWER True
Finance: For a given amount, the lower the discount rate, the less the present value -
ANSWER False
Finance: Under which of the following conditions will a future value calculated with
simple interest exceed a future value calculated with compound interest at the same
rate? - ANSWER This is not possible with positive interest rates
Finance: A level stream of cash payments that continues indefinitely is known as a
perpetuity; one that continues for a limited number of years is called an annuity. What
type of statement is this? - ANSWER Regarding present and future values of streams
of cash payments
Finance: The decision rule for net present value is to - ANSWER Accept all projects with
positive net present values
Finance: One comes reason for issuing 2 distinct classes of common stock is to -
ANSWER restrict voting privileges from some shareholders
Finance: Treasury bills have a beta of zero? - ANSWER True
Finance: As the coupon rate of a bond increases, the bonds' - ANSWER interest
payments increase
Finance: If a stock's P/E ratio is 13.5 at a time when earning $3 per year, what is the
stock's current price? - ANSWER $40.50 (13.5 * 3)
Finance: What are the 3 service/ product provided to corporations by financial markets
and institutions? - ANSWER Valuation of the company, financing, and contracts to
manage risk
Finance: Cost of capital is the return investors could expect - ANSWER True
Finance: A firm's mixture of long term financing and equity financing is called... -
ANSWER Capital structure
, Finance: The weighted average cost of capital is adjusted for tax savings - ANSWER
True
Finance: If there is a total of $800 on the balance sheet and long term bonds account
for $200, what is the weighted percentage that the long term bonds hold? - ANSWER
25% (200/800= .25 *100)
Finance: Financial statement analysis is assuming relationships between the items of
the balance sheet and the profit and loss account - ANSWER True
Finance: You've been saving up to buy the Godot Company. The total cost will be $10
million. You currently have about $2.3 million. If you can earn 5% on your money, how
long will you wait? - ANSWER 20 million
Finance: What is an example of perpetuity? - ANSWER $10,000 annual payments from
a trust fund forever
Law: It requires proof of breach of a statutory or common-law duty. is an example of? -
ANSWER Tort of negligence
Law: What is not true when it regards a seller's rights to reduce legal liability in the sale
on non-comsusmer goods? - ANSWER The seller can disclaim all implied warranties
by simply stating that there are no implied warranties.
Law: The establishment clause holds that - ANSWER The government cannot pass
laws that promote religion or show preference for one religion over another.
Law: If an injured party entered into an activity with knowledge that it may be dangerous
and voluntarily assumed that risk, which defense to the tort of negligence might be
asserted? - ANSWER Assumption of risk
Law: In order to assert a design defect, a plaintiff might be able to show that a
reasonable alternative design was available and that the defendant's failure to adopt
the alternative design rendered the product unreasonably dangerous. - ANSWER True
Law: The Sherman act protect consumers from? - ANSWER Trade and commerce
against unlawful restraints and monopolies
Law: Violations of OSHA can result in (3) - ANSWER criminal penalties, fines, and
termination
Law: Fair debt collection practices protect consumers from - ANSWER being harassed
