A project's Profitability Index (PI) is less than 1. Select the most correct statement:
Which one of the following will increase the Cash Flow From Assets in this year for a tax-paying firm, all else remaining constant?
Which business structure or structures have the advantage of limited liability for equity investors?
Question 657 systematic and idiosyncratic risk, CAPM, no explanation
A stock's required total return will decrease when its:
Question 787 fixed for floating interest rate swap, intermediated swap
The below table summarises the borrowing costs confronting two companies A and B.
| Bond Market Yields | ||||
| Fixed Yield to Maturity (%pa) | Floating Yield (%pa) | |||
| Firm A | 2 | L - 0.1 | ||
| Firm B | 2.5 | L | ||
Firm A wishes to borrow at a floating rate and Firm B wishes to borrow at a fixed rate. Design an intermediated swap (which means there will actually be two swaps) that nets a bank 0.15% and grants the remaining swap benefits to Firm A only. Which of the following statements about the swap is NOT correct?
A company has a 95% daily Value at Risk (VaR) of $1 million. The units of this VaR are in:
Safe firms with low chances of bankruptcy will tend to have:
What is the Cash Conversion Cycle for a firm with a:
- Payables period of 1 day;
- Inventory period of 50 days; and
- Receivables period of 30 days?
All answer options are in days:
Question 892 foreign exchange reserve, foreign exchange rate, no explanation
The Chinese central bank has the largest amount of foreign currency reserves.
What could the large amounts of foreign exchange reserves held by the Chinese government be used for in a currency crisis? China's currency is called the Renminbi (RMB) or Yuan (CNY). In a Chinese currency crisis the Chinese government is likely to use its FX reserves to: