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.