Please answer the following:

1. The ability to analyze the company's strengths and weaknesses is a fundamental concept that a nonfinancial manager should understand in order to ______

a. better assess the current environment in which the firm operates

b. better assess future financing requirements

c. better understand the role of capital markets in raising long-term funds

d. better measure and create value for the shareholder

2. The _______ is used to determine the annual or semi-annual interest cash flow for a bond

whereas the ______ is the rate used to determine the price of the bond.

a. coupon rate; yield to maturity

b. yield to maturity; coupon rate

c. yield to maturity; discount rate

d. current yield; yield to maturity

3. The _____is cited by the author as a reason for using just one rate, a long-term yield, as

the average cost of debt financing for a firm that has multiple issues of debt with varying maturities.

a. efficient markets hypothesis

b. market substitution theory

c. biased expectation theory

d. unbiased expectations theory