Questions from General Investment


Q: Why do you think most long-term financial planning begins with

Why do you think most long-term financial planning begins with sales forecasts? Put differently, why are future sales the key input?

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Q: Both ROA and ROE measure profitability. Which one is more useful

Both ROA and ROE measure profitability. Which one is more useful for comparing two companies? Why?

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Q: What is the difference between gross margin and operating margin? What

What is the difference between gross margin and operating margin? What do they tell us? Generally speaking, are larger or smaller values better?

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Q: What is a bond refunding? Is it the same thing as

What is a bond refunding? Is it the same thing as a call?

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Q: From an investor’s standpoint, what are the key differences between Treasury

From an investor’s standpoint, what are the key differences between Treasury and agency issues?

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Q: From an investor’s standpoint, what are the main differences between Treasury

From an investor’s standpoint, what are the main differences between Treasury and municipal issues?

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Q: Complete the following sentence for each of these investors: a

Complete the following sentence for each of these investors: a. A buyer of call options. b. A buyer of put options. c. A seller (writer) of call options. d. A seller (writer) of put options. The (buye...

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Q: Treasury and municipal yields are often compared to calculate critical tax rates

Treasury and municipal yields are often compared to calculate critical tax rates. What concerns might you have about such a comparison? What do you think is true about the calculated tax rate?

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Q: For a callable Treasury bond selling above par, is it necessarily

For a callable Treasury bond selling above par, is it necessarily true that the yield to call will be less than the yield to maturity? Why or why not?

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Q: From the bondholder’s perspective, what are the potential advantages and disadvantages

From the bondholder’s perspective, what are the potential advantages and disadvantages of floating coupons?

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