Questions from Financial Management


Q: Options are more exciting than investing in the underlying stocks because they

Options are more exciting than investing in the underlying stocks because they offer leverage. Explain this statement.

See Answer

Q: Is investing in options really investing or is it more like gambling

Is investing in options really investing or is it more like gambling?

See Answer

Q: Describe the feature of financial reporting that made leasing popular before FASB

Describe the feature of financial reporting that made leasing popular before FASB 13.

See Answer

Q: Describe the primary conflict of interest that caused the public accounting industry

Describe the primary conflict of interest that caused the public accounting industry to fail in its duty to protect the investing public’s interests in the 1990s.

See Answer

Q: How and why is the U.S. dollar unique among

How and why is the U.S. dollar unique among the world's currencies?

See Answer

Q: Why did securities analysts issue biased reports in the 1990s? In

Why did securities analysts issue biased reports in the 1990s? In what direction were the reports biased?

See Answer

Q: Verbally rationalize the validity of a stock valuation model that doesn't contain

Verbally rationalize the validity of a stock valuation model that doesn't contain a selling price as a source of cash flow to the investor. Give two independent arguments.

See Answer

Q: Why are growth rate models practical and convenient ways to look at

Why are growth rate models practical and convenient ways to look at stock valuation?

See Answer

Q: What is meant by normal growth? Contrast normal and super normal

What is meant by normal growth? Contrast normal and super normal growth. How long can each last? Why?

See Answer

Q: Describe the approach to valuing a stock expected to grow at more

Describe the approach to valuing a stock expected to grow at more than one rate in the future. Can there be more than two rates? What two things have to be true of the last rate?

See Answer