1.There are people who believe that the analysis of financial statements has limitations. Which of the statements below would qualify as a limitation of financial statement analysis?

(a)Ratio analysis requires the analyst to evaluate a firms performance over a period of time to be of any value.

(b)Proper ratio analysis requires the analyst to rely upon audited financial statements, which can be easily manipulated.

(c)Thorough ratio analysis requires the analyst to refer to benchmarking, which is very easy to misinterpret.

(d)Ratio analysis requires the analyst to utilize accounting data that is based on historical costs instead of current market values.

2.

Which of the following statements is true?

(a)		Present value calculations involve converting the initial amount into a future amount.
(b)		The present value (PV) is often called the compounded value of future cash payments.
(c)		The present value is calculated by using the discount factor.
(d)		The future value of an investment is the reciprocal of its present value.

3.

As per the rule of 72, the time to double your money (TDM) approximately equals:

(a)		72/n.
(b)		72/i.
(c)		72/Initial investment.
(d)		72/Future value.