1.

Generally, a mortgage is an example of an amortized loan.

Select one:

True

False

2.

If a firm produces a 10 percent return on assets and also a 10 percent return on equity, then the firm:

Select one:

a. also has a current ratio of 10.

b. has no debt of any kind.

c. has an equity multiplier of 2.

d. is using its assets as efficiently as possible.

e. has no net working capital.

3.

The market value of a firm that invests in projects providing a return equal to its WACC should decrease over time.

Select one:

True

False

4.

A project which has a payback period equal to its life also has a positive NPV.

Select one:

True

False

5.

The primary goal of financial management is to minimize compensation.

Select one:

True

False

6.

The square root of the variance is called the:

Select one:

a. Excess return.

b. Standard deviation.

c. Probability range.

d. Average rate of return.

e. Risk premium.