WGU d076 after fail OA

d076 after fail OA

• studiers today 5.0 (5 reviews)

Terms in this set (31) Western Governors UniversityD 196 Save What is the difference between the current ratio and the quick ratio?Inventory is excluded in the calculation of the quick ratio.What is the term for the risk that changes in interest rates will impact the value of a bond?Interest rate risk What is used to measure total risk? Standard deviation What is the term for the return over the entire period that an investor owns a financial security?Holding period return You signed an apartment contract today. You are going to pay $1,500 at the beginning of each month for the next 12 months, starting today. What type of cash flows is this contract?An annuity due

What is the rate at which the average price level of particular goods and services in an economy increases over a period of time?Inflation rate Which type of interest rate includes interest on interest in addition to interest on the principal?Compound interest What is the difference between return on assets (ROA) and return on equity (ROE)?ROE considers the capital structure of a company, while ROA does not.What does high inventory turnover relative to the industry and competitors indicate?The firm does not hold enough inventory and is making its customers wait longer to receive their purchased goods.What is the ratio that tells you on average how long it takes for a firm to collect accounts receivable?Average collection period Three different names are used for interest rate for different purposes

and perspectives:

discount rate, required rate, and cost of capital.Simple interest is the interest only on the principal, while compound interest is the interest on the principal plus the interest on earned interest.What is the main purpose of charging interest?It allows borrowers to pay to use the assets of another entity to accomplish their own goals.

The required rate of return is also known as the ... in the context of corporate finance.hurdle rate The... is the rate of return or compensation that an investor or a lender will accept for investments such as stocks, bonds, or loans.required rate of return is the possibility that the realized or actual return will differ from the expected return.Risk Three causes of inflation are increased demand for goods and services, rising costs, and built-in inflation.is the rate at which invested money grows for a certain period of time The nominal rate What is the compensation for risk given to investors called?Risk premium Which type of interest rate is the rate at which invested money grows for a certain period time?Nominal rate Which component of an interest rate is an indicator of inflation and opportunity cost?Risk-free rate

What is the name for the interest rate expressed on an annual basis?Annual percentage rate Why is the required rate of return also known as the hurdle rate?It is the minimum rate that a firm must surpass to accept a project.What is the inflation rate?The rate at which the average price level of a basket of goods and services in an economy increases What does the risk-free rate indicate?Inflation and opportunity cost Suppose Sophia is considering a new stock investment for her retirement account. This stock has significant risk, but is quite popular in the market. Inflation for the next few years is expected to be 2-3% per year, and the current U.S. Treasury rates are about 2%. How should she use this information to decide what type of return she can expect from the stock?Based on the inflation rate, she should expect this stock to provide a return higher than this for the associated risk.What is default risk?A firm-specific risk that comes from the probability of a loss resulting from a borrower's failure to repay a contractual obligation What is the name for the process of "spreading" money over many different assets?Diversification