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FIN 402 Week 5 DQ 3
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FIN 402 Final Exam Guide
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FIN 402 Investment Fundamentals and Portfolio Management Final
Exam Guide
True/False
1.___ ___ The balance sheet shows what assets the firm controls at a
point in time and how it financed the assets.
2.___ ___ Free cash flow = Cash flow from operations – Capital
expenditures + Disposition of property and equipment.
3.___ ___ The income statement indicates the flow of sales,
expenses, and earnings during a period of time.
4.___ ___ Financial ratios are used in stock and bond valuation
models.
5.___ ___ A good portfolio is a collection of individually good
assets.
6.___ ___ If the covariance of two stocks is positive, these stocks
tend to move together over time.
7.___ ___ Increasing the correlation among assets in a portfolio
results in an increase in the standard deviation of the portfolio.