Financial Management and Risk Analysis: Examining the Fama-FrenchModel, EOQ, and Pension PlansQuestion 11.Which of the following are the factors for the Fama-French model?AnswerThe excess market return, a size factor, and abook-to-market factor.The excess market return, a debt factor, and a book-to-market factor.The excess market return, a size factor, and a debt.A debt factor, a size factor, and a book-to-market factor.The excess market return, anindustrial production factor, and a book-to-market factor.8pointsQuestion 21.Which of the following areNOTways risk management can be used to increase the value of afirm?AnswerRisk management can increase debt capacity.Riskmanagement can help a firm maintain its optimal capital budget.Risk management can reduce the expected costs of financial distress.Risk management can help firms minimize taxes.Risk management can allow managers to defer receipt oftheir bonuses and thuspostpone tax payments.8pointsQuestion 31.Which of the following is true of the EOQ model?Note that the optimal order quantity, Q, willbe called EOQ.AnswerIf the fixed per order cost increases by 20%, then EOQ willincrease by 20%If the annual sales, in units, increases by 20%, then EOQ will increase by 20%.If the average inventory increases by 20%, then the total carrying costs will increaseby 20%.If the average inventory increases by 20% thetotal order costs will increase by 20%.The EOC is the same for all comppanies.Preview Mode
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