Q&A Hero

Q: The reward-to-volatility ratio is given by _________. A. the slope of the capital allocation line B. the second derivative of the capital allocation line C. the point at which the second derivative of the investor's indifference curve reaches zero D. the portfolio's excess return

Q: Plate Corporation, a US company, acquired ownership of Saucer Corporation of Switzerland on January 1, 2011 for $1,500,000 when Saucer's stockholders' equity in Swiss francs (SF) consisted of 700,000 SF Capital Stock and 300,000 SF Retained Earnings. The exchange rate for Swiss francs was $1.20 on January 1. All excess purchase cost was attributed to a Trademark that did not have a recorded book value. The trademark is to be amortized over 20 years.Saucer's functional currency is Swiss francs and the records are kept in the same currency. A summary of changes in Saucer's stockholders' equity during 2011 and relevant exchange rates are as follows:In Exchange InFrancs Rates DollarsStockholders' equity1/1/11 1,000,000 $1.20H $1,200,000Net income 250,000 1.15A 287,500Dividends 11/1/11 (100,000) 1.10H (110,000)Equity adjustment (170,000)Stockholders' equity _________ _________12/31/11 1,150,000 1.05C $1,207,500Required: Determine the following:1. Fair value of the Trademark from Plate's investment in Saucer on January 1, 2011 in U.S. dollars.2. Trademark amortization for 2011 in U.S. dollars.3. Unamortized Trademark at December 31, 2011 in U.S. dollars.4. Equity adjustment from the Trademark in U.S. dollars.5. Income from Saucer for 2011 in U.S. dollars.6. Investment in Saucer balance at December 31, 2011 in U.S. dollars.

Q: A monopolistA) is a price searcher. B) is a price taker.C) faces an upward sloping demand curve. D) faces a vertical demand curve.

Q: The rate of return on _____ is known at the beginning of the holding period, while the rate of return on ____ is not known until the end of the holding period. A. risky assets; Treasury bills B. Treasury bills; risky assets C. excess returns; risky assets D. index assets; bonds

Q: On January 1, 2011, Pilgrim Corporation, a U.S. firm, acquired ownership of Settlement Corporation, a foreign company, for $168,000, when Settlement's stockholders' equity consisted of 300,000 local currency units (LCU) and retained earnings of 100,000 LCU. At the time of the acquisition, Settlement's assets and liabilities were fairly valued except for a patent that did not have any recorded book value. All excess purchase cost was attributed to the patent, which had an estimated economic life of 10 years at the date of acquisition. The exchange rate for LCUs on January 1, 2011 was $.40. The functional currency for Settlement is LCU. Settlement's books are maintained in LCU.A summary of changes in Settlement's stockholders' equity during 2011 and the exchange rates for LCUs is as follows:LCU Rates DollarsStockholders' equity1/1/11 400,000 $.40H $160,000Net income 100,000 .42A 42,000Dividends 12/1/11 (50,000) .43H (21,500)Equity adjustment 17,500Stockholders' equity _______ ________12/31/11 450,000 .44C $198,000Required: Determine the following:1. Fair value of the patent from Pilgrim's investment in Settlement on January 1, 2011 in U.S. dollars.2. Patent amortization for 2011 in U.S. dollars.3. Unamortized patent at December 31, 2011 in U.S. dollars.4. Equity adjustment from the patent in U.S. dollars.5. Income from Settlement for 2011 in U.S. dollars.6. Investment in Settlement balance at December 31, 2011 in U.S. dollars.

Q: In long-run equilibrium, the perfectly competitive firm will A) go out of business. B) produce to the point at which marginal cost is at its minimum. C) produce to the point at which marginal cost equals average total cost. D) produce on the upward sloping portion of its ATC curve.

Q: The excess return is the _________. A. rate of return that can be earned with certainty B. rate of return in excess of the Treasury-bill rate C. rate of return to risk aversion D. index return

Q: Note to Instructor: This exam item is a continuation of Exercise 5 and proceeds forward with Stripe's second year of operations.Stripe Corporation, a British subsidiary of Polka Corporation (a U.S. company) was formed by Polka on January 1, 2011 in exchange for all of the subsidiary's common stock. Stripe has now ended its second year of operations on December 31, 2012. Relevant exchange rates are:January 01, 2011 = 1 = $1.60April 01, 2011 = 1 = $1.62December 31, 2012 = 1 = $1.572012 average rate = 1 = $1.56Stripe's adjusted trial balance is presented below for the calendar year 2012.In PoundsDebits:Cash 172,000Accounts receivable 308,000Notes receivable 98,000Building 400,000Land 100,000Depreciation expense 10,000Other expenses 117,000Salary expense 376,000Total debits 1,581,000CreditsAccumulated depreciation 17,500Accounts payable 200,000Common stock 550,000Retained earnings 213,500Sales revenue 600,000Total credits 1,581,000Required: Prepare Stripe's:1. Remeasurement working papers;2. Remeasured income statement; and3. Remeasured balance sheet.

Q: Marginal revenue equalsA) total revenue divided by output.B) price times quantity, divided by average revenue.C) total revenue divided by average revenue.D) the change in total revenue from selling one more unit.

Q: The market risk premium is defined as __________.A. the difference between the return on an index fund and the return on Treasury billsB. the difference between the return on a small-firm mutual fund and the return on the Standard & Poor's 500 IndexC. the difference between the return on the risky asset with the lowest returns and the return on Treasury billsD. the difference between the return on the highest-yielding asset and the return on the lowest-yielding asset

Q: Note to Instructor: This exam item is similar to Exercise 3 except that the exchange rates have been changed and the temporal method is used instead of the current rate method.The Polka Corporation, a U.S. corporation, formed a British subsidiary on January 1, 2011 by investing 550,000 British pounds () in exchange for all of the subsidiary's no-par common stock. The British subsidiary, Stripe Corporation, purchased real property on April 1, 2011 at a cost of 500,000, with 100,000 allocated to land and 400,000 allocated to the building. The building is depreciated over a 40-year estimated useful life on a straight-line basis with no salvage value. The U.S. dollar is Stripe's functional currency, but it keeps its records in pounds. The British economy does not experience high rates of inflation. Exchange rates for the pound on various dates are:January 01, 2011 = 1 = $1.60April 01, 2011 = 1 = $1.62December 31, 2011 = 1 = $1.652011 average rate = 1 = $1.64Stripe's adjusted trial balance is presented below for the year ended December 31, 2011.In PoundsDebits:Cash 200,000Accounts receivable 72,000Notes receivable 99,000Building 400,000Land 100,000Depreciation expense 7,500Other expenses 115,000Salary expense 208,000Total debits 1,201,500CreditsAccumulated depreciation 7,500Accounts payable 100,000Common stock 550,000Retained earnings 0Equity adjustment 0Sales revenue 544,000Total credits 1,201,500Required: Prepare Stripe's:1. Remeasurement working papers;2. Remeasured income statement; and3. Remeasured balance sheet.

Q: You have an EAR of 9%. The equivalent APR with continuous compounding is _____. A. 8.47% B. 8.62% C. 8.88% D. 9.42%

Q: OutputFixed CostsVariable CostsTotal CostsAverage Total CostsAverage Marginal Variable Costs Costs0 $0$100 1 30 2 50 3 60 4 120 5 200 In the above table, what is the average variable cost to produce 3 units of output?A) $30 B) $60 C) $10 D) $20

Q: Which of the following would be a fixed input to an automobile firm?A) Steel B) A factory in DetroitC) Car batteries D) Engineers

Q: You have an APR of 7.5% with continuous compounding. The EAR is _____. A. 7.5% B. 7.65% C. 7.79 % D. 8.25%

Q: Pan Corporation, a U.S. company, formed a British subsidiary on January 1, 2012 by investing 450,000 British pounds () in exchange for all of the subsidiary's no-par common stock. The British subsidiary, Skillet Corporation, purchased real property on April 1, 2012 at a cost of 500,000, with 100,000 allocated to land and 400,000 allocated to a building. The building is depreciated over a 40-year estimated useful life on a straight-line basis with no salvage value. The British pound is Skillet's functional currency and its reporting currency. The British economy does not have high rates of inflation. Exchange rates for the pound on various dates were:January 01, 2012 = 1 = $1.60April 01, 2012 = 1 = $1.61December 31, 2012 = 1 = $1.682012 average rate = 1 = $1.66Skillet's adjusted trial balance is presented below for the year ended December 31, 2012.In PoundsDebits:Cash 220,000Accounts receivable 52,000Inventory 59,000Building 400,000Land 100,000Depreciation expense 7,500Other expenses 110,000Cost of goods sold 220,000Total debits 1,168,500CreditsAccumulated depreciation 7,500Accounts payable 111,000Common stock 450,000Retained earnings 0Equity adjustment 0Sales revenue 600,000Total credits 1,168,500Required: Prepare Skillet's:1. Translation working papers;2. Translated income statement; and3. Translated balance sheet.

Q: Accounting profits are found by total revenues minusA) explicit costs. B) explicit and implicit costs. C) implicit costs. D) all opportunity costs.

Q: Suppose you pay $9,400 for a $10,000 par Treasury bill maturing in 6 months. What is the effective annual rate of return for this investment? A. 6.38% B. 12.77% C. 3.17% D. 14.25%

Q: On January 1, 2012, Planet Corporation, a U.S. company, acquired 100% of Star Corporation of Bulgaria, paying an excess of 90,000 Bulgarian lev over the book value of Star's net assets. The excess was allocated to undervalued equipment with a three-year remaining useful life. Star's functional currency is the Bulgarian lev. Star's books are maintained in the functional currency. Exchange rates for Bulgarian lev for 2012 are:January 1, 2012 $.77Average rate for 2012 .75December 31, 2012 .73Required:1. Determine the depreciation expense stated in U.S. dollars on the excess allocated to equipment for 2012.2. Determine the unamortized excess allocated to equipment on December 31, 2012 in U.S. dollars.3. If Star's functional currency was the U.S. dollar, what would be the depreciation expense on the excess allocated to the equipment for 2012?

Q: Suppose that the quantity of good y is measured along the vertical axis and that the quantity of good x is measured along the horizontal axis. If the price of good x is $5 and the price of good y is $10 when income is $200 per time period, the slope of the consumerʹs budget constraint will beA) -0.5. B) -2. C) -5. D) -10.

Q: For each of the 12 accounts listed in the table below, select the correct exchange rate to use when either remeasuring or translating a foreign subsidiary for its U.S. parent company.CodesC = Current exchange rateH = Historical exchange rateA = Average exchange rateU.S. dollar is The foreignthe functional currency is thecurrency functional currencyAccounts receivable ________ ________Marketable debt securities carried at cost ________ ________Inventories carried at cost ________ ________Deferred income ________ ________Goodwill ________ ________Other paid-in capital ________ ________Depreciation expense ________ ________Refundable deposits ________ ________Common stock ________ ________Accumulated depreciation on buildings ________ ________Deferred income tax liabilities ________ ________Accounts payable ________ ________

Q: If your dinner guest said, ʺEvery bite, including the last bite, tasted as good as the first,ʺ then the marginal utility for himA) is decreasing. B) is increasing. C) is constant. D) is positive.

Q: If a U.S. company wants to hedge a prospective loss on its investment in a foreign entity that may result from a foreign currency fluctuation, the U.S. company shouldA) purchase a forward to swap currency of the foreign entity's local country for U.S. currency.B) purchase a call option to buy currency of the foreign entity's local country.C) issue a loan in the foreign entity's local country.D) borrow money in the foreign entity's local country.

Q: Annual percentage rates can be converted to effective annual rates by means of the following formula: A. [1 + (APR/n)]n - 1 B. (APR)(n) C. (APR/n) D. (periodic rate)(n)

Q: A measure of the responsiveness of the demand for one good to the percentage change in the price of another good isA) price elasticity of demand. B) price elasticity of supply. C) cross price elasticity of demand. D) income elasticity.

Q: An investment earns 10% the first year, earns 15% the second year, and loses 12% the third year. The total compound return over the 3 years was ______. A. 41.68% B. 11.32% C. 3.64% D. 13%

Q: A foreign subsidiary's accounts receivable balance should be translated for the consolidated financial statements atA) the appropriate historical rate.B) the prior year's forecast rate.C) the future rate for the next year.D) the spot rate at year-end.

Q: PricePer Unit Quantity DemandedPer Week$10.00259.50309.00358.50408.00457.50507.00556.50606.00655.50705.0075Refer to the above table. What is the absolute price elasticity of demand if a price falls from $7.50 to $7?A) 10 B) 1.38 C) 0.724 D) 0.1

Q: A U.S. parent corporation loans funds to a foreign subsidiary to be used to purchase equipment. The loan is denominated in U.S. dollars and the functional currency of the subsidiary is the euro. This intercompany transaction is a foreign currency transaction ofA) neither the subsidiary nor the parent, as it is eliminated as part of the consolidation procedure.B) the subsidiary but not the parent.C) both the subsidiary and the parent.D) the parent but not the subsidiary.

Q: The dollar-weighted return is the _________. A. difference between cash inflows and cash outflows B. arithmetic average return C. geometric average return D. internal rate of return

Q: Which of the following would be viewed as a common property problem?A) Your property is burglarized.B) Vandals damage your property.C) People pick all of the flowers in a public park. D) To be safe you must lock your door at night.

Q: The geometric average of -12%, 20%, and 25% is _________. A. 8.42% B. 11% C. 9.7% D. 18.88%

Q: The percentage of national income spent on health care A) has steadily decreased since 1965. B) has steadily increased since 1965. C) increased until the end of the 1970s and then decreased in the 1980s and 1990s. D) decreased until the end of the 1970s and then increased in the 1980s and 1990s.

Q: Exchange gains or losses from remeasurement appearA) in the continuing operations section of the consolidated income statement.B) as an extraordinary item on the consolidated income statement.C) as other comprehensive income typically reported in a statement of stockholders' equity.D) as an adjustment to the beginning balance of retained earnings on the consolidated Statement of retained earnings.

Q: The arithmetic average of -11%, 15%, and 20% is ________. A. 15.67% B. 8% C. 11.22% D. 6.45%

Q: Which of the following foreign subsidiary accounts will have the same value on consolidated financial statements, regardless of whether the statements are remeasured or translated?A) TrademarkB) Deferred IncomeC) Accounts ReceivableD) Goodwill

Q: Use the above table. If the marginal revenue product is $10, how many workers will the profit maximizing monopsonist hire?A) 1 B) 2 C) 3 D) 4

Q: Published data on past returns earned by mutual funds are required to be ______. A. dollar-weighted returns B. geometric returns C. excess returns D. index returns

Q: The following assets of Poole Corporation's Romanian subsidiary have been converted into U.S. dollars at the following exchange rates:Current HistoricalRates RatesAccounts receivable $850,000 $875,000Trademark 600,000 575,000Property plant and equipment 1,200,000 900,000Totals $2,650,000 $2,350,000Assume the functional currency of the subsidiary is the U.S. dollar and the books are kept in a different currency. The assets should be reported in the consolidated financial statements of Poole Corporation and Subsidiary in the total amount ofA) $2,325,000.B) $2,350,000.C) $2,375,000.D) $2,650,000.

Q: The CIO was founded byA) Samuel Gompers. B) Jimmy Hoffa. C) John L. Lewis. D) George Meany.

Q: Your timing was good last year. You invested more in your portfolio right before prices went up, and you sold right before prices went down. In calculating historical performance measures, which one of the following will be the largest? A. dollar-weighted return B. geometric average return C. arithmetic average return D. mean holding-period return

Q: When translating foreign subsidiary income statements using the current rate method, why are some accounts translated at an average rate?A) This approach improves matching.B) This approach accentuates the conservatism principle.C) This approach smoothes out highly volatile exchange rate fluctuations.D) This approach approximates the effect of transactions which occur continuously during the period.

Q: When an input represents a larger proportion of a firmʹs total costs, thenA) demand for the input will tends to be less elastic.B) the input demand will not vary significantly with a change in input price. C) the usage of the input cannot be varied in the production function.D) demand for the input will tends to be more elastic.

Q: The holding period return on a stock is equal to _________. A. the capital gain yield over the period plus the inflation rate B. the capital gain yield over the period plus the dividend yield C. the current yield plus the dividend yield D. the dividend yield plus the risk premium

Q: At the time of a business acquisition,A) identifiable assets and liabilities are allocated the portion of the translation or remeasurement adjustment that existed on the date of acquisition.B) a foreign entity's assets and liabilities are translated into U.S. dollars using the current exchange rate in effect on that date.C) the difference between investment fair value and translated net assets acquired is treated as a remeasurement gain or loss on the income statement.D) the difference between investment fair value and translated net assets acquired is recorded as a cumulative translation adjustment on the balance sheet.

Q: Which antitrust act was passed to protect independent retailers from ʺunfair discriminationʺ by chain stores?A) Federal Trade Commission Act B) Robinson-Patman ActC) Sherman Act D) Wheeler-Lea Act

Q: You have calculated the historical dollar-weighted return, annual geometric average return, and annual arithmetic average return. You always reinvest your dividends and interest earned on the portfolio. Which method provides the best measure of the actual average historical performance of the investments you have chosen? A. dollar-weighted return B. geometric average return C. arithmetic average return D. index return

Q: Palk Corporation has a foreign subsidiary located in a country experiencing high rates of inflation. Information concerning this country's inflation rate experience is given below.Change Annual rateDate Index in index of InflationJanuary 1, 2009 90January 1, 2010 120 30 30/100 = 30.00%January 1, 2011 150 30 30/130 = 23.08%January 1, 2012 210 60 60/160 = 37.50%The inflation rate that is used in determining if the subsidiary is operating in a highly inflationary economy isA) 37.50%.B) 90.58%.C) 133.33%.D) 350.00%.

Q: Other things being equal, which market structure is most likely to yield the greatest industry long-run economic profit?A) Monopolistic competition B) OligopolyC) Monopoly D) Perfect competition

Q: The complete portfolio refers to the investment in _________. A. the risk-free asset B. the risky portfolio C. the risk-free asset and the risky portfolio combined D. the risky portfolio and the index

Q: Accounts representing an allowance for uncollectible accounts are converted into U.S. dollars atA) historical rates when the U.S. dollar is the functional currency.B) current rates only when the U.S. dollar is the functional currency.C) historical rates regardless of the functional currency.D) current rates regardless of the functional currency.

Q: The industry concentration ratio measures theA) value of the assets owned by the largest corporations in the market.B) percentage of industry sales accounted for by the top four or eight firms.C) difference between price and marginal cost for the largest firms in the industry.D) degree of product differentiation in the market.

Q: Which of the following statements about the Current Rate method is false?A) Translation involves restating the functional currency amounts into the reporting currency.B) All assets and liabilities are translated at the current rate.C) If the subsidiary maintains their books in their functional currency, the current rate method is used.D) The effect of exchange rate changes are reported on the income statement as a foreign exchange gain or loss.

Q: Graphically, how does a monopolistically competitive firm determine its profit -maximizing price?A) It accepts the price set by the industry-wide forces of supply and demand.B) Graphically, it finds the place where MR = MC and charges the price directly to the left of that point.C) The firmʹs pricing structure is set by government regulators.D) The firm determines its profit-maximizing output and then charges the price associated with the point on its demand curve directly above that quantity.

Q: Rank the following from highest average historical standard deviation to lowest average historical standard deviation from 1926 to 2013. I. Small stocks II. Long-term bonds III. Large stocks IV. T-bills A. I, II, III, IV B. III, IV, II, I C. I, III, II, IV D. III, I, II, IV

Q: Which of the following assets and/or liabilities are considered monetary?A) Intangible Assets and Plant, Property, and EquipmentB) Bonds Payable and Common StockC) Cash and Accounts PayableD) Notes Receivable and Inventories carried at cost

Q: Refer to the above figure. The firm is currently producing at Q1. The firm should A) reduce production. B) leave production as it is. C) increase production. D) shut down.

Q: Rank the following from highest average historical return to lowest average historical return from 1926 to 2013. I. Small stocks II. Long-term bonds III. Large stocks IV. T-bills A. I, II, III, IV B. III, IV, II, I C. I, III, II, IV D. III, I, II, IV

Q: Assume the functional currency of a foreign entity is the U.S. dollar, but the books are kept in euros. The objective of remeasurement of a foreign entity's accounts is toA) produce the same results as if the foreign entity's books were maintained in the currency of the largest customer.B) produce the same results as if the foreign entity's books were maintained solely in the local currency.C) produce the same results as if the foreign entity's books were maintained solely in the U.S. dollar.D) produce the results reflective of the foreign entity's economics in the local currency.

Q: Firms in a perfectly competitive industry are producing goods efficiently in the long run if each is producing at the minimum point of theA) AVC curve. B) MC curve. C) LAC curve. D) AFC curve.

Q: Which one of the following measures time-weighted returns and allows for compounding? A. geometric average return B. arithmetic average return C. dollar-weighted return D. historical average return

Q: A foreign entity is a subsidiary of a U.S. parent company and has always used the current rate method to translate its foreign financial statements on behalf of its parent company. Which one of the following statements is false?A) The U.S. dollar is the functional currency of this company.B) Changes in exchange rates between the subsidiary's country and the parent's country are not expected to affect the foreign entity's cash flows.C) Translation adjustments are shown in stockholders' equity as increases or decreases in other comprehensive income.D) Translation adjustments are not shown on the income statement.

Q: In the above figure, what happens to the firmʹs optimal level of output if the price it receives for its product decreases from P4 to P3?A) Output stays the same.B) Output decreases. C) Output increases.D) There is not enough information provided to know what happens to output.

Q: If you want to measure the performance of your investment in a fund, including the timing of your purchases and redemptions, you should calculate the __________. A. geometric average return B. arithmetic average return C. dollar-weighted return D. index return

Q: OutputFixed CostsVariable CostsTotal CostsAverage Total CostsAverage Marginal Variable Costs Costs0 $0$100 1 30 2 50 3 60 4 120 5 200 In the above table, what is the average variable cost to produce 4 units of output?A) $30 B) $60 C) $55 D) $20

Q: Paskin Corporation's wholly-owned Canadian subsidiary has a Canadian dollar functional currency. In translating the subsidiary's account balances into U.S. dollars for reporting purposes, which one of the following accounts would be translated at historical exchange rates?A) Accounts ReceivableB) Notes PayableC) Capital StockD) Retained Earnings

Q: The ______ measure of returns ignores compounding. A. geometric average B. arithmetic average C. IRR D. dollar-weighted

Q: Pelmer has a foreign subsidiary, Sapp Corporation of Germany, whose functional currency is the euro. Sapp's books are maintained in euros. On December 31, 2011, Sapp has an account receivable denominated in British pounds. Which one of the following statements is true?A) Because all accounts of the subsidiary are translated into U.S. dollars at the current rate, the Account Receivable is not adjusted on the subsidiary's books before translation.B) The Account Receivable is remeasured into the functional currency, thus eliminating the need for translation.C) The Account Receivable is first adjusted to reflect the current exchange rate in euros and then translated at the current exchange rate into dollars.D) The Account Receivable is adjusted to euros at the current exchange rate, and any resulting gain or loss is included as a translation adjustment in the stockholders' equity section of the subsidiary's separate balance sheet.

Q: You put up $50 at the beginning of the year for an investment. The value of the investment grows 4% and you earn a dividend of $3.50. Your HPR was ____. A. 4% B. 3.5% C. 7% D. 11%

Q: A fixed resource is one thatA) is physically tied to a specific location.B) costs more than the average daily revenue of the firm. C) cannot be varied in the short run.D) can be disposed of only if the firm goes out of business.

Q: The primary goal behind consolidating financial statements of a controlled subsidiary isA) assuring that the subsidiary financial statements are the same under the temporal method or the current rate method.B) assuring that the individual nature of the subsidiary entity is not lost in the consolidation.C) representing the conversion of statements at the historical exchange rate.D) representing the company's underlying economic condition.

Q: The problem with the separation of ownership from control is that A) the owner in a proprietorship may not always act in the profit -maximizing fashion because he or she may not have the experience or expertise that professional managers have. B) the managing partner of a firm may not always behave in the way that other managers would if they were the managing partners. C) the managers of the firm can make decisions that reduce the wealth of the owners while not reducing their own wealth. D) the owners of firms may not always know the best way to run a firm, yet they are the ones who elect the managers of the firm.

Q: Disadvantages of ETFs include all of the following exceptA. investors incur a bid-ask spread when purchasing.B. investors must pay a broker fee when purchasing.C. prices are only quoted once each day.D. prices can depart from NAV at times.

Q: All of the following factors would be used to define a foreign entity's functional currency, exceptA) high volume of intercompany transactions.B) expenses for foreign entity primarily driven by local factors.C) financing for foreign entity denominated in local currency.D) foreign entity's status as a local tax haven for transfer pricing purposes.

Q: Approximately what percentage of assets held in equity funds in 2014 was in index funds? A. 20% B. 33% C. 50% D. 60%

Q: The slope of the budget constraint line is theA) income of consumers divided by the price of each good.B) ratio of this yearʹs income to last yearʹs income. C) rate of exchange between the two goods.D) ratio of different levels of income.

Q: Selvey Inc. is a wholly-owned subsidiary of Parsfield Incorporated, a U.S. firm. The country where Selvey operates is determined to have a highly inflationary economy according to GAAP definitions. Therefore, for purposes of preparing consolidated financial statements, the functional currency isA) its reporting currency.B) its current rate method currency.C) the US dollar.D) its local currency.

Q: The reason that all -you-can-eat restaurants can make a profit is due toA) the law of demand.B) the law of increasing relative costs.C) the law of diminishing marginal utility.D) the law of diminishing marginal returns.

Q: Which type of fund generally has the lowest average expense ratio? A. actively managed bond funds B. hedge funds C. indexed funds D. actively managed international funds

Q: A U.S. firm has a Belgian subsidiary that uses the British pound as its functional currency. According to GAAP, the U.S. dollar from Belgian unit's point of view will beA) its only foreign currency.B) its local currency.C) its current rate method currency.D) its reporting currency.