Financial Management - Study Mode

[#741] A major difference between individual and institutional investors is their very different_______.
Correct Answer

(C) time horizons

Explanation

Solution: A major difference between individual and institutional investors is their very different time horizons.

[#742] Earnings Per Share (EPS) is equal to __________.
Correct Answer

(B) Profit after tax/No of outstanding shares

Explanation

Solution: Earnings Per Share (EPS) is equal to Profit after tax/No of outstanding shares. It is calculated by dividing the company's net income with its total number of outstanding shares. It is a tool that market participants use frequently to gauge the profitability of a company before buying its shares.

[#743] __________ are a way U. S. investors can invest in foreign companies.
Correct Answer

(A) ADRs

Explanation

Solution: ADRs are a way U. S. investors can invest in foreign companies. American depositary receipts (ADRs) can simplify the access of U.S. investors to foreign markets. Listed on the New York Stock Exchange and Nasdaq, they can be traded, settled and held as if they were ordinary shares of U.S.-based companies.

[#744] Process of comparing company results with other leading firms is considered as
Correct Answer

(C) benchmarking

Explanation

Solution: Process of comparing company results with other leading firms is considered as benchmarking. Benchmarking is a process of measuring the performance of a company's products, services, or processes against those of another business considered to be the best in the industry, aka “best in class.”

[#745] An equity multiplier is multiplied to return on assets to calculate
Correct Answer

(A) return on assets

Explanation

Solution: An equity multiplier is multiplied to return on assets to calculate return on assets. Return on assets (ROA) is an indicator of how profitable a company is relative to its total assets.