present your answers. Each question in Part I is worth 5 pts unless otherwise noted. (1.) The primary goal of corporate managers is to: (a.) minimize costs. (b.) minimize interest payments. (c.) minimize risk. (d.) maximize shareholder wealth/stock price. (2.) Which function of a firm's management creates the most value for the company? (a.) Capital structure (b.) Capital budgeting (c.) Working capital management (d.) Corporate governance (3.) A ratio to measure the firm's ability to meet short-term obligations is the (a.) current ratio. (b.) profitability index. (c.) debt-to-equity ratio. (d.) asset turnover ratio. (4.) Banks A, B, and C have identical quoted rates of interest on certificates of deposit (CDs); however, they compound interest annual, monthly, and semiannually, respectively. You have decided to purchase a one-year CD. Which bank offers you the highest effective annual rate (EAR)? (a.) Bank A (b.) Bank B (c.) Bank C (d.) They have identical EARs. (5.) In general, when interest rates go down, (a.) bond prices will go up. (b.) bond prices will go down. c.) bond prices will not be affected since the interest rate for the bond is determined at the time of issuance (d.) long-term bond (e.g. 30-year bonds) prices will go up, while prices of shorter-term bonds (e.g. five-year maturity) will remain the same present your answers. Each question in Part I is worth 5 pts unless otherwise noted. (1.) The primary goal of corporate managers is to: (a.) minimize costs. (b.) minimize interest payments. (c.) minimize risk. (d.) maximize shareholder wealth/stock price. (2.) Which function of a firm's management creates the most value for the company? (a.) Capital structure (b.) Capital budgeting (c.) Working capital management (d.) Corporate governance (3.) A ratio to measure the firm's ability to meet short-term obligations is the (a.) current ratio. (b.) profitability index. (c.) debt-to-equity ratio. (d.) asset turnover ratio. (4.) Banks A, B, and C have identical quoted rates of interest on certificates of deposit (CDs); however, they compound interest annual, monthly, and semiannually, respectively. You have decided to purchase a one-year CD. Which bank offers you the highest effective annual rate (EAR)? (a.) Bank A (b.) Bank B (c.) Bank C (d.) They have identical EARs. (5.) In general, when interest rates go down, (a.) bond prices will go up. (b.) bond prices will go down. c.) bond prices will not be affected since the interest rate for the bond is determined at the time of issuance (d.) long-term bond (e.g. 30-year bonds) prices will go up, while prices of shorter-term bonds (e.g. five-year maturity) will remain the same
