Exam3-02 Spring 2016 Key 1. C 2. E 3. A 4. D 5. A 6. B 7. D 8. C 9. A 10. B 11. A 12. B 13. B 14. D 15. A 16. E 17. B 18. C 19. B 20. C 21. E 22. E 23. C 24. E 25. E 26. C 27. B 28. A 29. A Form A 30. A 31. A 32. B 33. D 34. D 35. E 36. E 37. B 38. D 39. D 40. B 41. D 42. E 43. C 44. C 45. D 46. D 47. B 48. D 49. A 50. D 51. D 52. E 53. C 54. C 55. C 56. E 57. A 58. C 59. A 60. C 61. B 62. B 63. C 64. D 65. B 66. A 67. B 68. B 69. D 70. D 71. A 72. B 73. D 74. A 75. E Exam3-02 Spring 2016 Summary Category # of Questions AACSB: Analytic 74 Blooms: Analyze 30 Blooms: Remember 17 Blooms: Understand 28 Difficulty: 1 Easy 60 Difficulty: 2 Medium 15 EOC: # 4.6 1 EOC: #2.8 1 Learning Objective: 01-02 Identify the goal of financial management. 1 Learning Objective: 01-03 Compare the financial implications of the different forms of business organizations. 1 Learning Objective: 02-04 Determine a firms cash flow from its financial statements. 1 Learning Objective: 02-04 Determine a firms cash flow from its financial statements. 1 Learning Objective: 03-03 Assess the determinants of a firms profitability and growth. 1 Learning Objective: 03-03 Assess the determinants of a firms profitability and growth. 1 Learning Objective: 04-01 Determine the future value of an investment made today. 1 Learning Objective: 04-03 Calculate the return on an investment. 1 Learning Objective: 05-01 Determine the future and present value of investments with multiple cash flows. 1 Learning Objective: 05-02 Calculate loan payments and find the interest rate on a loan. 1 Learning Objective: 05-03 Describe how loans are amortized or paid off. 1 Learning Objective: 06-01 Identify important bond features and types of bonds. 1 Learning Objective: 06-04 Evaluate the impact of inflation on interest rates. 1 Learning Objective: 07-01 Assess how stock prices depend on future dividends and dividend growth. 2 Learning Objective: 08-01 Summarize the payback rule and some of its shortcomings. 3 Learning Objective: 08-03 Explain the internal rate of return criterion and its associated strengths and weaknesses. 6 Learning Objective: 08-04 Evaluate proposed investments by using the net present value criterion. 3 Learning Objective: 08-05 Apply the modified internal rate of return. 1 Learning Objective: 08-06 Calculate the profitability index and understand its relation to net present value. 2 Learning Objective: 09-01 Determine the relevant cash flows for a proposed investment. 9 Learning Objective: 09-02 Analyze a projects projected cash flows. 1 Learning Objective: 09-02 Analyze a projects projected cash flows. 1 Learning Objective: 09-02 Analyze a projects projected cash flows. 1 Learning Objective: 09-02 Analyze a projects projected cash flows. 1 Learning Objective: 09-03 Evaluate an estimated NPV. 2 Learning Objective: 10-01 Calculate the return on an investment. 5 Learning Objective: 10-02 Discuss the historical returns on various important types of investments. 3 Learning Objective: 10-03 Explain the historical risks on various important types of investments. 4 Learning Objective: 10-04 Assess the implications of market efficiency. 3 Learning Objective: 11-01 Calculate expected returns. 6 Learning Objective: 11-02 Explain the impact of diversification. 1 Learning Objective: 11-03 Define the systematic risk principle. 5 Learning Objective: 11-04 Discuss the security market line and the risk-return trade-off. 3 Ross - Chapter 01 2 Ross - Chapter 02 2 Ross - Chapter 03 2 Ross - Chapter 04 2 Ross - Chapter 05 3 Ross - Chapter 06 2 Ross - Chapter 07 2 Ross - Chapter 08 15 Ross - Chapter 09 15 Ross - Chapter 10 15 Ross - Chapter 11 15 Section: 1.3 1 Section: 1.4 1 Section: 10.1 3 Section: 10.3 5 Section: 10.4 4 Section: 10.5 1 Section: 10.6 3 Section: 11.1 3 Section: 11.2 4 Section: 11.3 1 Section: 11.4 2 Section: 11.6 4 Section: 11.7 2 Section: 2.4 2 Section: 3.4 2 Section: 4.1 1 Section: 4.3 1 Section: 5.2 2 Section: 5.4 1 Section: 6.3 1 Section: 6.6 1 Section: 7.1 1 Section: 7.2 1 Section: 8.1 2 Section: 8.2 3 Section: 8.4 8 Section: 8.5 2 Section: 9.1 2 Section: 9.2 8 Section: 9.3 2 Section: 9.4 1 Section: 9.6 1 Section: 9.7 1 Topic: Amortized loan 1 Topic: Annuity future value 1 Topic: Arithmetic and geometric averages 1 Topic: Beta 1 Topic: Beta coefficient 1 Topic: Capital gains yield 1 Topic: Capital rationing 1 Topic: CAPM 1 Topic: Cash flow from assets 1 Topic: Crossover point 1 Topic: Depreciation tax shield 1 Topic: Dividend yield 1 Topic: Efficient capital market 1 Topic: Erosion 1 Topic: Expected return 1 Topic: Fallen angel 1 Topic: Fisher effect 1 Topic: Future value 1 Topic: Goal of financial management 1 Topic: Historical volatility of returns 1 Topic: Incremental cash flows 1 Topic: Interest rate 1 Topic: Internal growth rate 1 Topic: Internal rate of return 5 Topic: Limited liability company 1 Topic: Market efficiency 2 Topic: Modified internal rate of return 1 Topic: Mutually exclusive investments 1 Topic: Net present value 2 Topic: Net working capital 1 Topic: Operating cash flow 2 Topic: Opportunity cost 3 Topic: Ordinary annuity versus annuity due 1 Topic: Payback period 3 Topic: Portfolio 1 Topic: Portfolio beta 1 Topic: Portfolio return 2 Topic: Portfolio weight 1 Topic: Preferred stock 1 Topic: Probability range 1 Topic: Profitability index 2 Topic: Project cash flow 1 Topic: Real rate of return 1 Topic: Relevant cash flows 1 Topic: Risk and return 1 Topic: Risk measurements 1 Topic: Risk premium 2 Topic: Risk-free rate 1 Topic: Security market line 1 Topic: Sensitivity analysis 1 Topic: Side effects 1 Topic: Stock valuation 1 Topic: Sunk cost 2 Topic: Sustainable growth rate 1 Topic: Systematic risk 1 Topic: Total dollar return 1 Topic: Unexpected return 1 Topic: Unsystematic risk 1 Topic: Variance 1 Topic: Variance of returns 1