Questions from Financial Management

Q: What are financial markets? Why do they exist?

What are financial markets? Why do they exist?

Q: How do financial managers calculate the average tax rate?

How do financial managers calculate the average tax rate?

Q: Why are trend analysis and industry comparison important to financial ratio analysis

Why are trend analysis and industry comparison important to financial ratio analysis?

Q: What action(s) should be taken if analysis of pro

What action(s) should be taken if analysis of pro forma financial statements reveals positive trends? Negative trends?

Q: What happens to the riskiness of a portfolio if assets with very

What happens to the riskiness of a portfolio if assets with very low correlations (even negative correlations) are combined?

Q: Compare diversifiable and non-diversifiable risk. Which do you think

Compare diversifiable and non-diversifiable risk. Which do you think is more important to financial managers in business firms?

Q: How do risk-averse investors compensate for risk when they take

How do risk-averse investors compensate for risk when they take on investment projects?

Q: How is present value affected by a change in the discount rate

How is present value affected by a change in the discount rate?

Q: What is an annuity?

What is an annuity?

Q: Which is lower for a given company: the cost of debt

Which is lower for a given company: the cost of debt or the cost of equity? Explain. Ignore taxes in your answer.