1. A company has annual revenues = $146,000,000 and its DSO = 20. Its A/R =?

2. Assume the yield curve is flat at a point in time. The interest rate on a loan to the U.S. government maturing in 5 years = 2.5%. The interest rate on a loan to the U.S. government maturing in 25 years at this point in time is

3. A corporations debt securities (bonds) have a rating of single-B. This information means that

a) lenders should expect inflation to be very high over the term of the loan

b) lenders should expect the liquidity of the securities to be very poor

c) lenders should seriously consider buying the common stock of the company

d) lenders should expect a high probability of default by the borrower

e) none of the above

4.

Assume the expectations theory of the term structure of interest rates is completely correct. Also assume that the yield curve is perfectly flat. Then lenders must expect that

a) short term interest rates wont change in the future

b) short term interest rates will rise in the future

c) short term interest rates will fall in the future

d) you cant infer anything about what lenders are expecting

e) none of the above

5. A bond is currently selling at a premium. This necessarily implies that

a) the companys stock is a very good investment at this time

b) the bond has a credit rating of A+ or higher

c) the economy is about to fall into a recession

d) the bonds price is above the par value of the bond

e) none of the above