Q36. In class, we talked about the current situation of the turbulence in the economy and the stock market. We mentioned that the VIX index goes up during uncertain times. Which of the following is most directly impacted by the VIX index?*

a. Depreciation

b. Discount rate

c. Historical cost

d. Bad Debt Expense

e. None of the above

Q37. In class, we talked about some of the opinions of the Oracle of Omaha, Warren Buffett, regarding financial reporting and decision making. Which of the following statements would Buffett most likely agree with:*

a. Accrual accounting is more important than the cash flow measures of performance

b. Accrual accounting is of equal importance to the cash flow measures of performance

c. Accrual accounting is less important than the cash flow measures of performance

d. Technical analysis is more important than fundamental analysis using financial statement numbers

e. None of the above is correct

Q38: In class we discuss the VIX index. Choose the correct answer:*

a. Based on US GAAP, if a VIX spikes more than 10% per day, a company must assess the overall loss and recognize it on its financial statements within 3 days

b. Based on US GAAP, if a VIX spikes more than 15% per day, a company must assess the overall loss and recognize it on its financial statements within 3 days

c. Often the valuations of public companies increase when the VIX index increase

d. The VIX is an Asset on the Balance Sheet and when it increases there must be an associated increase of a Liability or Equity account so that the Balance Sheet equation will hold

e. All the answers above are incorrect

Q39: Which of the following statements about a SPAC-- in a general sense -- is NOT true?*

a. A SPAC circumvents the traditional IPO (initial public offering) process by using a shell corporation to finance a merger or acquisition

b. Typically, any interested investor can buy many SPACs traded on an open stock exchange like the New York Stock Exchange or NASDAQ

c. When a SPAC files for IPO, it must have a company that offers a product or a service to customers

d. The acronym SPAC stands for "special purpose acquisition company" and these companies are often also referred to as "blank check" companies

e. All the answers above are incorrect