End Of Class Assessment Quiz
This quiz is to help us assess how effective this class is in teaching you about investment banking concepts. This will in no way impact your candidacy - this is for educational analysis only.
- 1.What is GAAP?
- A.
Generally Accountable Actuary Principles
- B.
A set of rules and regulations governing investment banks
- C.
A standard framework of guidelines for financial accounting
- D.
I don't know
- 2.The financial statement that reports the revenues and expenses for a period of time such as a year or a month is the:
- A.
Balance Sheet
- B.
Income Statement
- C.
Cash Flow Statement
- 3.Unearned Revenues is what type of account?
- A.
Asset
- B.
Liability
- C.
Shareholder Equity
- D.
Income Statement Account
- 4.When cash is received, the account Cash will be:
- A.
Debited
- B.
Credited
- 5.If a company has debt of $100 with a current interest rate of 5%, which of the following would be affected if the interest rate changed to 10%?
- A.
Cash
- B.
Taxes Payable
- C.
Retained Earnings
- D.
Gross Profit
- 6.What is a DCF?
- A.
Discounted company forecast
- B.
A way to project how much money a company can make in the future
- C.
An analysis that detects issues in historical profitability
- D.
A method of valuing a project, company, or asset using the concepts of the time value of money
- 7.Which of the following is the most senior financing instrument?
- A.
Preferred Equity
- B.
Common Equity
- C.
Senior Subordinated Loan
- D.
2nd Lien Debt
- 8.What is the formula for EBITDA interest coverage?
- A.
Interest Expense / EBITDA
- B.
EBITDA / Total Debt
- C.
EBITDA / Interest Expense
- D.
EBITDA / (Interest Expense + Taxes)
- 9.What is EBITDA?
- A.
A metric to measure profitability
- B.
Revenue - Total Expenses
- C.
A Balance Sheet Item
- 10.What options do corporations typically evaluate when considering a merger or acquisition of another company?
- A.
Raising secondary equity
- B.
Raising debt from debt investors
- C.
Providing the target company stock in the acquiring company
- 11.Select the roles an investment banker plays with her clients
- A.
Trusted Advisor
- B.
Financing Source
- C.
Access point for information not available to the public
- D.
Golf partner
- 12.What is the difference between a retail bank and an investment bank?
- A.
One has storefronts, the other provides mortgages
- B.
One provides corporations loans and the other provides corporations with 401Ks
- C.
One holds consumer accounts, like checking and savings, and the other performs a range of corporate finance tasks, including issuing securities, raising capital for mergers and acquisitions, and market making
- D.
Nothing
- 13.True or False: An Investment Banker helps companies decide on creative financing strategies for everything from expanding into new territories to buying complementary companies
- A.
True
- B.
False
- 14.True or False: Investment banks get to help take fast-growing, exciting companies, like Twitter and Facebook, public through IPOs
- A.
True
- B.
False
- 15.Select knowledge backgrounds that are helpful to an investment banker
- A.
Accounting
- B.
Finance
- C.
Business Strategy
- D.
Healthcare
- 16.What is a “frictionless asset”?
- A.
An asset that you sell within 3 days of purchase
- B.
An asset that makes you money without you having to sell it, like a bond with a coupon payment
- C.
An asset with a bid-ask spread of 0
- 17.What is the “bid-ask” spread?
- A.
The difference between a quoted price at which someone will sell their asset, and the quoted price at which someone would buy that same asset.
- B.
The difference in value of what a company owns an asset for and what its depreciated value is
- C.
The gap between what a stock broker will offer for a stock, and what someone paid for that stock
- D.
The difference of value in each transaction a trader executes
- 18.Select which best describes a sales & trading position
- A.
A position in which you perform lots of research and summarize that research for reports
- B.
Sales & Trading revolves around pitches to corporate clients in the hopes of winning the opportunity to execute their financings
- C.
A fast paced environment in which clients buy and sell various financial assets based on the intelligence and strategies of the team
- 19.True or False: People who like to keep up with day to day global, economic and industry specific news can do well in a markets driven position
- A.
True
- B.
False
- 20.What knowledge backgrounds are highly useful for a trader?
- A.
Marketing
- B.
Statistics
- C.
Economics
- D.
Finance
- 21.True or False: Bank of America has a sophomore rotational program in which students get to explore investment banking and sales & trading first hand
- A.
True
- B.
False
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