When calculating a client’s net worth always use the sentiment value of each asset and the full, or outstanding, balance due for each liability.   A. True   B. False

These are ways in which depository financial institutions measure liquidity risk except: a. Liquid assets to total assets. b. Liquid assets to long term liabilities. c. Maturity gap analysis return. d. Net liquidity statement.

1. Management of current liabilities arises, in part, because of a concern over a.  (profitability).b. (liquidity).c. (relevance)d. (reliability).

TRUE OR FALSE 6. Amortized cost liabilities are subsequently measured at the present value of the cash outflows from the instrument.

Business risk is the combination of __________ risk and __________ risk.   A. operating, financial B. operating, sales C. financial, sales D. sales, default

Critically explain each one of the following financial terms:i. Asymmetric informationii. Moral hazardiii. Adverse selectionGive examples in each case to illustrate your answer.

Which of the following is TRUE? An American call option on a stock should never be exercised early O An American call option on a stock should not be exercised early when no dividends are expected O It can be optimal to exercise early an American call option on a stock when no dividends are expected and there is no liquidity or portfolio rebalancing need. O An American call option on a stock should be exercised early when no dividends are expected

Is externally reported financial information always preciseand accurate?

A centerpiece of any study of finance is "valuation." A simple function, "V=l/R," can be used to describe an asset's "value." What does the "R" in that expression stand for? O a future cash flow O a current cash flow O a market-determined discount rate O a variable income measure O a measure of probability

In the most general sense, which of the following would you expect to be true? Select one: a. If a current asset account and a current liability account both increase by the same amount, there is a net use of funds. b. If the common stock outstanding increases there is a use of funds. c. If a liability account increases and an asset account decreases by the same amount, there is a net source of funds. d. If fixed assets decrease by the amount of depreciation for the year, there is a net use of funds. e. Changes in income and expense accounts do not affect sources and uses of funds.