Question 101.78 pts

What is the relationship between interest rates and stock prices?

Group of answer choices

Interest rates go up, stock prices go up

Interest rates go down, stock prices go up

Interest rates go down, stock prices go down

There is no relationship between interest rates and stock prices

Flag question: Question 11

Question 111.78 pts

Which of the following is not a source of return for investors?

Group of answer choices

When other investors contribute additional equity

Interim income like dividends or operating cash flow

Price appreciation of the asset

Flag question: Question 12

Question 121.78 pts

Please use the following data to derive a fair ROR: Real risk free rate of return = 3%; expected inflation = 3.5% Eps growth = 15%; net profit margin = 12%; long term risk premium for stocks = 6%; liquidity premium = 5%; business risk premium = 5%

Group of answer choices

49.5%

19.5%

22.5%

18%

37.5%

Flag question: Question 13

Question 131.78 pts

What is the relationship between economic growth and the demand for money?

Group of answer choices

There is no relationship between economic growth and the demand for money

When the economy is growing the demand for money decreases

When the economy is growing the demand for money increases

Flag question: Question 14

Question 141.78 pts

Why should interest rates include inflation?

Group of answer choices

They should not include inflation

Higher inflation leads to lower interest rates because money is worth less

Higher inflation leads to higher interest rates because there is a higher demand for money

Higher inflation leads to higher interest rates because money that is received in the future has less buying power

Flag question: Question 15

Question 151.78 pts

There are 5 sources of uncertainty when it comes to investments. Which of the following is not 1?

Group of answer choices

Leverage/financial

timing

business risk

currency

political

Flag question: Question 16

Question 161.78 pts

What is the relationship between the ROR and stock prices?

Group of answer choices

There is no relationship

If the ROR goes up, stock prices go down

If the ROR goes up, stock prices go up

If stock prices go up, the ROR goes up

Flag question: Question 17

Question 171.78 pts

What is the relationship between the ROR and stock multiples, like the p/e ratio?

Group of answer choices

There is no relationship

If the ROR goes up, multiples go up

If the ROR goes up, multiples go down

Flag question: Question 18

Question 181.78 pts

What is the relationship between investor sentiment and the ROR?

Group of answer choices

There is no relationship

If investors are pessimistic, the ROR goes up

If investors are optimistic, the ROR goes up

Flag question: Question 19

Question 191.78 pts

Match up the following sources and definitions of risk: I. business risk II. Liquidity risk III. Financial Risk IV. Exchange Rate Risk Risk to cash flows due to: VI. Currency differences VII. How a company is financed VIII. The nature of the business IX. Ability to quickly sell at a fair price

Group of answer choices

I,VII, II, VI, III, IX, IV, VIII

I, VIII, II,IX, III,VII, IV, VI

I, IX, II, VII, III, VI, IV, VIII

I, VIII, II, VII, III, IX, IV,VI