Financial Crisis occur about every

Financial Crisis occur about every …3-5 years7-10 years15-20 years The common cause of all financial crisis isCEO salariesGreedLeverageHousing bubblesWho’s actions contributed to the Financial Crisisbanksconsumersgovernmentall of the aboveMarking-to-market as it relates to the Financial Crisis is defined asAn adjustment of Futures account margin at the close of tradingValuation of asset accounts on the balance sheet to reflect the current market priceValuation of long term asset values to reflect the current market price in lieu of book valueValuation of a security based on a price that would be received in an orderly market rather than a forced liquidation to reflect fair valueLesson not learned. One of the causes of the Asian financial crisis of 1997/8 that contributed to the fall of Bear Stern in 2008 wasLack of transparency in the mortgage marketFinancing longer term investments with short term debtExtensive use of Credit Default Swaps (CDS)The repeal of the Glass-Steagall ActYou can trace back the inception of the 2008 Financial Crisis to1999200120072008What you should take away from the financial crisisDon’t borrow moneyEstablish an emergency accountStocks are not a good investmentWhich of the following is the driver for dividend growth in the constant growth Dividend Discount Model (DDM)?GDP growthCapital gainsStock price appreciationGrowth in EPSA firm that has a competitive advantage over its competitors will haveAn ROE > ROE of competitorsAn ROE > gAn ROE > kAn ROE >EPSWhich of the following is not an assumption of DDMThe firm pays a dividendThe dividends are stableThe dividends are growing at a constant rateThe dividend payout ratio is constantWhich of the following statements is INCORRECTThe Gordon model is a perpetuityThe Gordon Model is an intrinsic value modelROE is a component of growthThe required return can never exceed EPS growth rateWhen a security is over-pricedIts required return (K) exceeds its expected returnIts return on equity exceeds its required returnIts expected return exceeds its required returnNone of the aboveWhen the firm takes on additional debt, all else being equal, FCFF willIncreaseDecreaseNot changeIncrease initially and decrease in future periodsWhen a firm does not pay a dividend, investors will demand earnings grow atThe firm’s required Rate of Returna constant growth ratethe firm’s Return on Invested Capitalthe firm’s Return on Equity