Economic theory teaches that differences in market returns must relate to difference in: a

1. Economic theory teaches that differences in market returns must relate to difference in:
   a. book value
   b. perceived risk
   c. price-earnings ratio
   d. bankruptcy risk

b. perceived risk

2. Market equity beta measures the co-variability of a firm's returns with the returns of:
   a. all industry competitors in the market
   b. risk free securities
   c. all securities in the market
   d. all firms of comparable market value

c. all securities in the market

3. The johnson company has a current ration of 1.45. The company has just sold $600k worth of merchandise on credit. What will the current ratio be after the sales on credit?

Greater than 1.45

4. One common problem with the current ratio is that it is susceptible to window dressing. If prior to the end of the accounting period Saxon Company has a current ratio of 1.5 and management wishes to boost its current ratio it may decide to:
   a. pay off a/p prior to year end
   b. purchase more inventory on account
   c. purchase short term investments with cash
   d. purchase more inventory with cash

a. pay off a/p prior to year end

5. What is mobile's current ratio in 2010?
   a. 1.07
   b. 1.45
   c. 1
   d. .69

b. 1.45

6. Mobile's quick ratio changed by what percentage from 2009 to 2010?
   a. 30%
   b. 107%
   c. 25%
   d. 82%

a. 30%

7. Mobile's operating cash flow to current liabilities ratio in 2010 was
   a. .70
   b. 1.39
   c. 1.00
   d. .72

d. .72

8. Mobile's days receivables outstanding at the end of 2010 was
   a. 43.20 days
   b. 40.50 days
   c. 45.25 days
   d. 8.50 days

a. 43.20 days

9. Mobile's days AP outstanding at the end of 2010 is:
   a. 7.53 days
   b. 48.09 days
   c. 45.51 days
   d. 50 days

b. 48.09 days

10. Days of other financing required by Mobile at the end of 2010 would be
    a. 54.36 days
    b. 75.36 days
    c. 102.94 days
    d. 5.27 days

a. 54.36 days