Finance Midterm Final

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Author:
ddh2c
ID:
141572
Filename:
Finance Midterm Final
Updated:
2012-03-14 13:44:29
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Finance Midterm
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  1. Under the free cash flow approach to valuation:
    share value is found by subtracting the value of debt and preferred stock from the enterprise value
  2. Which of the following bonds has the greatest price change for a given change in interest rates?
    A 10-year zero coupon bond
  3. True or False? The weaker the correlation between two assets the smaller the reduction of risk attainable by holding positive amounts of these assets in a portfolio.
    False
  4. The primary contribution to portfolio risk from a single asset comes from its ????? with all other assets.
    Covariance
  5. Which of the following characterisitcs of return is represented in"percent squared" units?
    Variance
  6. The Fama-French model asserts that a firm's exposure to SMB and HML risk are important in explaining expected returns. Which of the following is consistent with the F-F model?
    A firm that has a positive size beta and a positive book to market beta has high expected return.
  7. The ??????? tells us the compositionof the optimal portfolio from a theoretical standpoint.
    CAPM
  8. Economists adopt the assumption of ??????? as a way to consider how the market will reach equilibrium
    homogenous expectations

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