Fight Finance

Would you like to the bond or politely ?

(a) The payback period is negative.

(b) The project's IRR is negative.

(c) The project's IRR is less than its required return.

(d) The project's IRR is more than its required return.

(e) The project's IRR is equal to its required return.

(a) The debt-to-assets (D/V) ratio will increase.

(b) The debt-to-equity ratio (D/E) will increase.

(c) Firm value is likely to have increased due to the higher amount of interest tax shields, assuming that there will not be any costs of financial distress.

(d) The company's after-tax WACC is likely to have decreased.

(e) The company's before-tax WACC is likely to have decreased.

(a) If a project has a positive NPV, its Profitability Index (PI) will be more than 1.

(b) If a project has a negative NPV and the discount rate is zero, then the payback period will be infinite so the project will never pay back its costs.

(c) If a project's NPV is zero, then the PI must be 1.

(d) If a project has a negative NPV, its IRR will be negative.

(e) If a project has a positive NPV, its Average Accounting Return (AAR) is not necessarily positive, it could be positive, negative or zero.

If the USD appreciates against the AUD, the American terms quote of the AUD will or ?

(a) $63.15

(b) $61.67

(c) $30.83

(d) $28.25

(e) $8.60

(a) A sunk cost.

(b) An opportunity cost.

(c) A non-pecuniary cost that should be disregarded.

(d) A positive side effect.

(e) A depreciation expense.

(a) Pay no income cash flow.

(b) Have a nominal total return of zero.

(c) Have a nominal capital return of zero.

(d) Have a nominal income return of zero.

(e) Have a real total return of zero.

(a)##-1 < \text{Red} < \infty## if Red is log-normally distributed.

(b) ##-2 < \text{Green} < 2## if Green is normally distributed.

(c) ##0 < \text{Blue} < \infty## if Blue is log-normally distributed.

(d) If the Green distribution is normal, then the mode = median = mean.

(e) If the Red and Blue distributions are log-normal, then the mode < median < mean.

(a) The 3-month government bill yield is likely to be given as a simple interest rate.

(b) The 10-year government bond yield is likely to be given as an annualised percentage rate compounding every six months since Japanese government bonds pay semi-annual coupons.

(c) As 10-year government bond yields fell over the last few years, bond investors would have made capital gains assuming that the bonds are fixed-coupon.

(d) The Japanese yield curve is ‘inverse’ at the latest time in mid-2017.

(e) The Japanese central bank has been maintaining expansionary monetary policy over the last few years.