1.Which form of informational market efficiency states that the market price of an asset contains all of the pertinent information regarding the value of that security?

a. Weak-form

b. Semistrong-form

c. Economic-form

d. Strong-form

2.In capital budgeting, what will be the effect on the NPV and IRR if there is an increase in the discount rate?

a. Increase Increase

b. Decrease Increase

c. Increase No effect

d. Decrease Decrease

e. Decrease No effect

3.) ASHI is considering the sale of a machine with a book value of P160,000 and 3 years remaining in its useful life. Straight-line depreciation of P50,000 annually is available. The machine has a current market value of P200,000. What is thecash flow from selling the machineif the TAX RATE is 30%?

P190,000

P188,000

P192,000

P200,000

P184,000

4.) Which of the following firms' stock price would increase the most if the market increased by 5%?

Firm D with a beta of 1.50

Firm A with a beta of 1.25

Firm B with a beta of 0.75

Firm E with a beta of 2.00

Firm C with a beta of 0.25

5.) When faced with a set of independent projects, one should select (choose the best answer)

a. all projects with an IRR greater than the hurdle rate or a PI greater than one.

b. all projects with an IRR greater than the hurdle rate

c. all projects with a positive NPV or an IRR greater than the hurdle rate.

d. all projects with a positive NPV

e. all projects with a positive NPV or a PI greater than the one.

f. all projects with a PI greater than one.

g. all projects with a positive NPV or an IRR greater than the hurdle rate or a PI greater than one.