1. Poor current ratio is when the ratio is below 1.0.

Select one:

True

False

2. Preferred profitability index is above 1.0

Select one:

True

False

3. Dividends are the liability of the firm.

Select one:

True

False

4. Linda is the finance manager of Pavilion International. She is required to prepare a report for the company on their working capital performance. Below are the details:

Receivables turnover 12.8 times

Payables turnover 11.9 times

Inventory turnover 15.6 times

Compute the cash conversion cycle.

Select one:

a. 21.25 days

b. 82.58 days

c. 3.34 days

d. 9.1 days

5. Which of the following statement(s) is/are incorrect?

i) Beta of average market is 0.

ii) Beta of average market is 1.

iii) Beta of T Bill is 1.

iv) Most stocks have betas in the range of 0.5 to 2.

Select one:

a. i, ii and iii

b. All of the above

c. ii, iii and iv

d. i, iii and iv

6. If inventory turnover is 3.28 times, therefore, Inventory Period is 120 days.

Select one:

True

False

7. The common stock for Axiata Corporation as per below:

Current share price = RM33

Rate of return = 10%

Dividends constantly increase by 2% annually indefinitely

Based on the above information, which of the one of following is true about their expected future dividend in the next 10 years?

Select one:

a. The expected future dividend in the next 10 years is RM3.08

b. The expected future dividend in the next 10 years is RM3.23

c. The expected future dividend in the next 10 years is RM3.19

d. The expected future dividend in the next 10 years is RM3.16

8. Which one of the following best exemplifies systematic risk?

Select one:

a. IKEA Incorporation recalled one of its children bunk bed due to safety issue.

b. Malaysia Central Bank, Bank Negara Malaysia reduced overnight rate (OPR) to 1.75%.

c. Sime Darby has agreed to elect new Chief Executive Officer for coming quarter.

d. Excel International cut off their employees salary by 15%.