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QUESTION
Finance
- Financial Crisis occur about every …
- 3-5 years
- 7-10 years
- 15-20 years
- The common cause of all financial crisis is
- CEO salaries
- Greed
- Leverage
- Housing bubbles
- Who’s actions contributed to the Financial Crisis
- banks
- consumers
- government
- all of the above
- Marking-to-market as it relates to the Financial Crisis is defined as
- An adjustment of Futures account margin at the close of trading
- Valuation of asset accounts on the balance sheet to reflect the current market price
- Valuation of long term asset values to reflect the current market price in lieu of book value
- Valuation of a security based on a price that would be received in an orderly market rather than a forced liquidation to reflect fair value
- Lesson not learned. One of the causes of the Asian financial crisis of 1997/8 that contributed to the fall of Bear Stern in 2008 was
- Lack of transparency in the mortgage market
- Financing longer term investments with short term debt
- Extensive use of Credit Default Swaps (CDS)
- The repeal of the Glass-Steagall Act
- You can trace back the inception of the 2008 Financial Crisis to
- 1999
- 2001
- 2007
- 2008
- What you should take away from the financial crisis
- Don’t borrow money
- Establish an emergency account
- Stocks are not a good investment
- Which of the following is the driver for dividend growth in the constant growth Dividend Discount Model (DDM)?
- GDP growth
- Capital gains
- Stock price appreciation
- Growth in EPS
- A firm that has a competitive advantage over its competitors will have
- An ROE > ROE of competitors
- An ROE > g
- An ROE > k
- An ROE >EPS
- Which of the following is not an assumption of DDM
- The firm pays a dividend
- The dividends are stable
- The dividends are growing at a constant rate
- The dividend payout ratio is constant
- Which of the following statements is INCORRECT
- The Gordon model is a perpetuity
- The Gordon Model is an intrinsic value model
- ROE is a component of growth
- The required return can never exceed EPS growth rate
- When a security is over-priced
- Its required return (K) exceeds its expected return
- Its return on equity exceeds its required return
- Its expected return exceeds its required return
- None of the above
- When the firm takes on additional debt, all else being equal, FCFF will
- Increase
- Decrease
- Not change
- Increase initially and decrease in future periods
- When a firm does not pay a dividend, investors will demand earnings grow at
- The firm’s required Rate of Return
- a constant growth rate
- the firm’s Return on Invested Capital
- the firm’s Return on Equity