Finance Questions

QUESTION 1

What is common-size analysis and what information can it tell you about an organization that looking at the $$ s on the financial statements alone cannot provide? Your response should be in your own words.

QUESTION 2

Explain how risk is included in the CAPM theory. Your response should be in your own words.

QUESTION 3

Identify two key liquidity ratios, explain how they are calculated, and discuss what each ratio can tell about an organization s performance. Your response should be in your own words.

QUESTION 4

Identify three key profitability ratios, explain how they are calculated, and discuss what each ratio can tell about an organization s performance. Your response should be in your own words.

QUESTION 5

Explain the three types of premiums and the role they play bond rates. Your response should be in your own words.

QUESTION 6

Identify three key solvency ratios (debt and asset ratios), explain in your own words how they are calculated, and discuss what each ratio can tell about an organization s performance.

QUESTION 7

What are junk bonds, and would you recommend investing in them? Defend your answer. Your response should be in your own words.

QUESTION 8

What are some of the key limitations of using ratio analysis to evaluate the performance of an organization? Your response should be in your own words.

QUESTION 9

What are the key types of stock typically issued by publicly traded organizations? If you were to invest $10,000 of your own funds, which type would you choose, why? Your response should be in your own words.

QUESTION 10

What are the key arguments of those who feel the Efficient Market Theory is invalid? Your response should be in your own words.