1. A company sells its accounts receivable in order to raise funds for its operation. This form of finance is known as:

Select one:

a. Debtor finance

b. Wholesale finance

c. Bank overdraft

d. Bridging finance

2. Consider the following portfolio comprised of two securities in the following proportions and with the indicated security beta. What is the portfolios beta?

Security	Amount invested	Beta	Expected Return
A	$28 million	0.7	8.0%
B	$22 million	1.2	12.0%

Select one:

a. 1.80

b. 0.92

c. 1.50

d. 0.85

3. Use the information in the table below to calculate the standard deviation.

Outcome	Probability	Returns
Boom	0.4	15%
Normal	0.5	7%
Recession	0.1	-1%
	1

Select one:

a. 5.12%

b. 10.20%

c. 11.00%

d. 8.49%

4. Shares of Moon Ltd. have a beta of 1.40. The risk free rate is 3% and the expected return on the share is 10%. What is the expected return on the market?

Select one:

a. 13.90%

b. 8.00%

c. 6.88%

d. 3.23%

5. Which of the following is a cost of floating a company?

Select one:

a. Costs incurred in the preparation of a prospectus

b. Brokerage fees

c. Underwriters fees

d. All of the given options are costs of floating a company

6) A plan in which the employees are given an option to buy the shares at some future time at a specified price is known as a/an:

Select one:

a. Fully paid share plan

b. Share Option plan

c. Instalment plan

d. All of the given options

7. The finance manager is presented with the following information regarding a project:

Its net present value is negative.

Its internal rate of return is less than the required rate of return.

Based on the available information, what option should he take?

Select one:

a. Calculate the profitability index

b. Decrease the required rate of return

c. Increase the required rate of return

d. Reject the project

8. One type of private equity is:

Select one:

a. Start-up financing

b. None of the given options

c. Venture capital

d. Turnaround financing

9. Using the information in the table below:

Outcome	Probability	Returns
Boom	0.4	15%
Normal	0.5	7%
Recession	0.1	-1%
	1

What is the expected return?

Select one:

a. 7.00%

b. 6.24%

c. 9.40%

d. 5.50%