True or False ______ 26) Debentures are an important source of short-term funds for smaller businesses. ______ 27) You will receive $5,000 at the end of 5 years and the rate on comparable investments is 7%. To find the value of that sum today you should use the present value of an annuity table. ______ 28 Within the capital asset pricing model, the higher the beta the lower the required rate of return. ______ 29) If you would like less risk with an investment, you should buy stocks with betas greater than 1.0 ______ 30) The difference between the cost of capital and the risk-free return in the Capital Asset Pricing Model (CAPM) is known as the market differential. _____ 31) A disadvantage of the payback method is that it does not consider which investment is the most profitable. _____ 32) A quick ratio considerably smaller than the current ratio indicates the firm will have a higher return on assets. _____ 33) An increasing average collection period indicates the firm is generating more income. _____ 34) If you put $1,000 in the bank every year at 6% interest for the next ten years, you would use the future value of an annuity table to find the ending balance in your account. _____ 35) The higher the bond rating (for example from Moodys or Standard & Poors), then the higher the interest rate on the bond. _____ 36) The term debenture refers to the after-tax value of an investment. _____ 37) The stated coupon rate on the bond is considered to be the most accurate measure for determining the return on a bond. _____ 38) A call provision in the bond agreement allows the bondholder to redeem the bond before the maturity date at his / her choosing. _____ 39) Zero-coupon bonds often allow the firm to decrease the required rate of return on the investment. _____ 40) Commercial paper is short-term with one or two years maximum for maturity. -------------------------------------------------------------------------------------------------------------------------- Thank you for taking and the course and God Bless!!