1Question: If inflation is anticipated to be 5 percent during the next year, while the real rate of interest for a one-year loan is 5 percent, then what should the nominal rate of interest be for a risk-free one-year loan?

A    5 percent
B    10 percent
C    25 percent
D    None of the above

2 Question: Which one of the following statements is not true?
A    The value of a dollar invested at a positive interest rate grows over time
B    The further in the future you receive a dollar, the less it is worth today
C    A dollar in hand today is worth more than a dollar to be received in the future
D    The further in the future you receive a dollar, the more it is worth today

3 Question: Efficiency ratio: Jet, Inc., has net sales of $712,478 and accounts receivables of $167,435. What are the firm’s accounts receivables turnover and days’ sales outstanding?
A    0.24 times; 78.5 days
B    4.26 times; 85.7 days
C    5.2 times; 61.3 days
D    None of the above

4 Question: If you have loaned capital to a firm, then you could be
A    A shareholder
B    A stakeholder
C    A partner
D    All of the above

5 Question: Which one of the following is not an advantage of using ROE as a goal?
A    ROE is highly correlated with shareholder wealth maximization
B    ROE and the DuPont analysis allow management to break down the performance and identify areas of strengths and weaknesses
C    ROE does not consider risk
D    All of the above are advantages of using ROE as a goal