BUS 5440 Midterm Exam with Answers.Your test grade is 95%
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BUS 5440 Midterm Exam with Answers.Your test grade is 95%
The professor has configured this test to allow students to:
Show Questions Answered Correctly
Show Questions Answered Incorrectly
Show All Responses Selected By Student
Show What The Correct Response Should Be
QUESTION: 1
[QUESTION BANK ID: 269361]
TYPE: MULTIPLE CHOICE
CORRECT
Dan is a chemist for ABC, a major drug manufacturer. Dan cannot earn excess profits on ABC stock based on the knowledge he has related to his experiments
if the financial markets are
A
Weak form efficient
B
Strong form efficient
C
Semi strong form efficient
D
Efficient at any level
E
Aware that the trader is an insider
QUESTION: 2
[QUESTION BANK ID: 269494]
TYPE: MULTIPLE CHOICE
CORRECT
Which of the following statements is correct?
A
Suppose a firm’s total assets turnover ratio falls from 1.0 to 0.9, but at the same time its profit margin rises from 9% to 10% and its debt increases from
40% of total assets to 60%. Under these conditions, the ROE will increase.
B
Suppose a firm’s total assets turnover ratio falls from 1.0 to 0.9, but at the same time its profit margin rises from 9% to 10% and its debt increases from
40% of total assets to 60%. Without additional information, we cannot tell what will happen to the ROE
C
The modified Du Pont equation provides information about how operations affect the ROE, but the equation does not include the effects of debt on the
ROE
D
Other things held constant, an increase in the debt ratio will result in an increase in the profit margin on sales
E
Suppose a firm’s total assets turnover ratio falls from 1.0 to 0.9, but at the same time its profit margin rises from 9% to 10%, and its debt increases from
40% of total assets to 60%. Under these conditions, the ROE will decrease
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