Graph for Q1. Inventory-to-sales ratios 06 05 04 03 02 3. b. C. d. 8. 8. -25 -8 8- $15 billion Target's inventory -22 Target Best Buy Walmart Amazon 10 2020 Q1. Based on the graph in the previous slide, please choose the most plausible statement. Answer: [ ] Higher ratio of "inventory/sales' likely leads to shorter inventory period Target looks to have relatively lower net working capital Lower ratio of "inventory/sales' could contribute to efficient operating cycle Amazon may have the longest operating cycle among the peers Q2. Company X sells on a 1/30, net 60 basis. Customer Y buys X's goods invoiced at $100,000. Commercial Bank's deposit rate is 3% per year. Based on the information above, please choose the most convincing statement. Answer: [ ] It is favorable for Y to make a full payment to X within 30 days It is favorable for Y to delay payment up to 60 days Y should pay interest if overdue 30 days It depends on storing cost of inventory a. b. C. d. Q3. Higher U.S. interest rates typically support the dollar by making U.S. assets attractive to yield-seeking investors. Investors expect that the U.S. Fed will increase short-term rates more aggressively this year than its central-bank peers. Applying Interest Rate Parity (IRP) to the above, please choose the most reasonable statement. Answer: [ ] a. Increasing U.S. interest rate will lead to currency forward discount on US dollar (base) b. Due to lower interest rate in Japan, Japanese Yen is likely to depreciate against US dollar C. IRP holds on a risk-adjusted basis d. IRP is in reverse relationship with relative Purchasing Power Parity Q4. Leasing is based on a lease contract between lessee and lessor on an asset owned by the lessor. Entering a lease contract, which of the following factors is not a critical one for the parties to consider? Answer: [ ] Whether bargain purchase option exists in the contract Financial status of the lessee Any special nature of the underlying asset Amortization method of the lessee a. b. d. Q5. Coupang stock has gone on a roller-coaster ride. While the company is attractive in respect of the customer satisfaction, its financial performance and status are not as satisfiable enough as of now. Given the volatile movement of the stock price, assuming you currently held Coupang stock, what position would be the most profitable when Coupang stock price plunged? Answer: [ ] Selling call option on the stock and investing the premium received in Treasury bills Selling put option on the stock and investing the premium received in Treasury bills Selling the stock and buying an out-of-the money put option on the stock Selling the stock and buying an in-the money call option on the stock a. b. c. d. Q6. This is an intangible asset that is associated with the purchase of one company by another. Specifically, this is the portion of the purchase price that is higher than the sum of the net fair value of all of the assets purchased in the business combination process. What is this? Answer: [ ] Q7. Discovery's deal with WarnerMedia took effect on Friday afternoon, creating a streaming media giant led by CEO David Zaslav. The deal foreshadows further changes in the streaming era. The newly formed company, Warner Bros.Discovery, will begin publicly trading on Monday. Please choose the appropriate term to describe the deal above. Answer: [ ] Acquisition Merger Split-off Spin-off 3. b. C. d. Q8. Absolute Purchasing Power Parity (PPP) does not usually hold water in reality. Which of the below is the factor that is likely to have the least impact on the working of absolute PPP in real life? Answer: [ 1 Inflation Taxes Market competition Demographic b. C. d. Q10. a. b. C. d. Which one of the following statements is correct? Answer: [ ] Value of put + present value of exercise price = value of call + share price Value of put + share price = value of call + present value of exercise price Value of put - share price = present value of exercise price - value of call Value of put + value of call share price - present value of exercise price I'd like [ ]: to become an entrepreneur running my own business []: to work for a local/multi-national company [ ]: to become a specialist working with an accounting/consulting firm [ ]: to become a scholar after further study [Others: ]