Question 5 (4 points) Listen Which of the following reflect the order of financing choices according to the pecking order theory? 1) Retained earnings, then bonds, then bank loan. 2) Bonds, then equity, then retained earnings 3) Internal resources, then outside debt, then equity financing. 4) Equity, internal resources, then bonds. Question 6 (4 points) Listen Everything else the same, the operating cycle should decrease with: 1) Increase in accounts receivable 2) Increase in inventory turnover O 3) Decrease accounts receivable turnover O4) Increase in accounts payable period Question 7 (4 points) 5 Listen Which of the following is a source of cash? 1) decrease in accounts payables O2) decrease in accounts receivables 3) debt repayment O4) credit sale Question 8 (4 points) Listen A flexible short-term financial policy: assets and higher 1) is associated with relatively larger carrying costs. O2) offers fewer sales incentives and less credit sales. 3) is associated with more inventory shortage and production disruption. 4) is not effective in increasing market share Question 9 (4 points) Listen When holding a relatively large portfolio, the....... risk portion from each asset class is eliminated and thus has no effect on the portfolio total risk; however, the overall portfolio is still subject to....... risk. In a fairly large portfolio, the ....... risk associated with one stock typically has no impact on the portfolio total risk. In this case, it would be reasonable to expect that the effects of ................... risk on various stocks would offset each other, thereby eliminating the risk to the investor arising from this source of risk. 1) unsystematic; systematic 2) systematic; unsystematic O 3) unsystematic; unsystematic O4) diversifiable; firm-specific