Question: Wite Company's current assets are $20 million ($1 in cash, $9 in accounts receivable, and $10 in inventory) and its current liabilities are $13.5 million.
If Wite sells $2 million in inventory on credit, the current ratio will:
Select an Answer: increase, and if Wite sells $1 million in inventory for cash and pays off accounts payable, the quick ratio will increase. remain the same, and if Wite sells $1 million in inventory for cash and pays off accounts payable, the quick ratio will increase. increase, and if Wite sells $1 million in inventory for cash and pays off accounts payable, the quick ratio will remain the same. remain the same, and if Wite sells $1 million in inventory for cash and pays off accounts payable, the quick ratio will decrease.
Rationale:
If the company sells $2 million in inventory on credit, inventory will decrease by $2 million and accounts receivable will increase by the same amount. Therefore, the current ratio will remain the same.
If the company sells $1 million in inventory for cash and applies this amount to accounts payable, then the quick ratio will increase.
2025-05-15
Question: Which of the following is not an example of a value-weighted series?
Select an Answer: Financial Times Actuaries Share Index
Dow Jones Industrial Average Market Value Index by AMEX NASDAQ series Russell Indexes
Wilshire 5,000 Equity Index
Dow Jones Equity Market Index
Rationale:
A value-weighted index may be generated by deriving the initial total market value of all stocks utilized in the series. The market value of the stocks influences the importance of individual stocks. Standard & Poor's Corporation (S&P) was the first company to widely utilize a market value index. Other examples of value-weighted series include: the NASDAQ series, the Market Value Index by AMEX, the Dow Jones Equity Market Index, the Wilshire 5000 Equity Index, the Russell Indexes, the Financial Times Actuaries Share Index, and the Tokyo Stock Exchange Price Index (TOPIX).
2025-05-14
Question: A ________ correlation is shown between the NYSE series and the AMEX series or the NASDAQ series. This suggests the possibility that the ________ market is segmented.
Select an Answer: lower; global higher; U.S. higher; global lower; U.S.
Rationale:
A lower correlation is shown between the NYSE series and the AMEX series or the NASDAQ series. This suggests the possibility that the U.S. market is segmented.
2025-05-13
Question: Which of the following indexes is not a price-weighted series?
Select an Answer: All of these are a price-weighted series. S&P 500 Nikkei-Dow Jones Average DJIA
Rationale:
The S&P 500 is a market value-weighted series.
2025-05-12
Question: If the premium on the market portfolio increases, the price of a firm's share ________, all else equal.
Select an Answer: all of these answers increases is not affected decreases
Rationale:
If the premium on the market portfolio increases, the expected return on the stock goes up, too. All else equal, this can happen only if the price of the stock decreases.
