Basic Finance W8 (MIT)

What is the main purpose of break-even analysis?

• To maximize profits

• To determine the level of output for neither profits nor losses

• To calculate the total expenses

• To analyze the effects of changes in prices and costs

What is the advantage of a no-load mutual fund?

• It is a mutual fund that trades intraday

• It charges commissions when individuals purchase shares from the fund

• It does not charge a sales commission when individuals purchase shares from the fund

• It combines features of closed-end investment companies and open-end mutual funds

What is the federal corporate income tax rate?

• 21 percent

• 18 percent

• 15 percent

• 25 percent

What is the formula to calculate the break-even level of output?

• QB = FC / (P - V)

• QB = FC / (P + V)

• QB = FC * (P + V)

• QB = FC * (P - V)

What is the main disadvantage of incorporating a business as a corporation?

• Permanence

• Limited liability

• Double taxation

• Ease of transfer of ownership

What is the primary goal of management in financial management?

• Maximization of sales revenue

• Minimization of costs

• Maximization of firm value

• Maximization of market share

What is the payback period for an investment that costs $1,000 and has annual cash inflows of $250?

• 2 years

• 3 years

• 4 years

• 5 years

What is the strategy of trying to match or track a benchmark index?

• Passive management

• Active management

• Index tracking

• Benchmarking

What is the net asset value (NAV) of an investment company?

• Total number of shares outstanding

• Total liabilities of the investment company

• Total assets of the investment company

• Equity value of a share in an investment company

What is the process of using data to discover useful information that supports decision-making?

• Data analysis

• Data analytics

• Data interpretation

• Data visualization