The larger the critical value on the z-statistic,

• A.the easier it is to reject the null hypothesis.
• B.the harder it is to reject the null hypothesis.
• C.the easier it is to accept the null hypothesis.

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A no-growth dividend discount model is:

• A.Value = Price earnings ratio.
• B.Equity = dividends / rate of return.
• C.Value = market value of firm / book value of firm on replacement cost basis.

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Which of the following statements is (are) true with respect to bond valuation?
I). Spot rates are equal to the yield to maturity of on-the-run coupon paying Treasury securities.
II). The arbitrage-free valuation approach discounts each cash flow of a bond using a different discount rate.
III). As the required yield to maturity increases, the discount on a zero-coupon bond will decrease.
IV). If the yield to maturity on a bond is greater than a bond's coupon rate, then the bond will trade below par.

• A.II and IV.
• B.II and III.
• C.I, III, and IV.

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Mr. A is planning to sell his company via a proposed tender at a very high price. He informs his sister who works at the company. His sister informs her husband and her husband informs Mr. S, who is a broker who trades on this information. Who has violated Standard II(A) - Material non-public information?

• A.Mr. A and Mr. S.
• B.Mr. S.
• C.Mr. A's sister's husband.

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A corporation's free cash flow is its:

• A.Cash flow from operating activities less all cash payments for investing and financing activities.
• B.Cash flow from operating activities that is not subject to income taxes.
• C.Cash flow from operating activities available after basic business obligations have been met.

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