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Risk Managment in Banks

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SUDANESE CANADIAN COLLEGE
DEPARTMENT OF BUSINESS ADMINSTRATION
CAPITAL MANAGEMENT
FINAL EXAM
MARCH 2012 NAME | DATE: | INDEX | |
ANSWER ALL QUESTIONS:
QUESTION ONE: SHORT ANSWERS: 1. What are the Functions or Tasks of Capital | | 2. What are the advantages and disadvantages of using stocks | | 3. What are the several conditions which impacts how we raise capital. | |
QUESTION TWO: MULTIPLE CHOICES: DRAW A CIRCLE AROUND THE BEST ANSWER: 1. The term "capital structure" refers to: a) long-term debt, preferred stock, and common stock equity b) current assets and current liabilities c) total assets minus liabilities d) shareholders' equity
.
2. A firm's degree of operating leverage (DOL) depends primarily upon its: a) sales variability b) level of fixed operating costs c) closeness to its operating break-even point. d) debt-to-equity ratio.

3. An EBIT-EPS indifference analysis chart is used for a) evaluating the effects of business risk on EPS. b) examining EPS results for alternative financing plans at varying EBIT levels. c) determining the impact of a change in sales on EBIT d) showing the changes in EPS quality over time.

4. EBIT is usually the same thing as: a) funds provided by operations. b) earnings before taxes. c) net income. d) operating profit. 5. In the context of operating leverage break-even analysis, if selling price per unit rises and all other variables remain constant, the operating break-even point in units will a) fall. b) rise. c) stay the same. d) still be indeterminate until interest and preferred dividends paid are known. 6. If a firm has a DOL of 5 at Q units, this tell us that a) if sales rise by 5%, EBIT will rise by 5%. b) if sales rise by 1%, EBIT will rise by 1%. c) if sales

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