21

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Université Bordeaux 1 *

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5000

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Finance

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Nov 24, 2024

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docx

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1

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21. What is the purpose of the DuPont analysis in financial analysis? A) To assess the company's liquidity position B) To evaluate the effectiveness of a company's marketing strategies C) To break down the return on equity (ROE) into its components D) To calculate the weighted average cost of capital (WACC) 22. Which of the following is a key assumption of the Black-Scholes model for option pricing? A) Constant interest rates B) Perfectly efficient markets C) Zero volatility D) Discrete time intervals 23. What is the role of a financial derivative in risk management? A) It eliminates all forms of financial risk B) It allows companies to take on more risk C) It helps companies hedge against specific types of risk D) It is primarily used for speculative purposes 24. In the context of capital budgeting, what is the payback period of an investment? A) The time it takes for an investment to generate positive cash flows B) The time it takes for an investment to recoup its initial cost C) The period during which a project is expected to be operational D) The time it takes for an investment to reach its peak profitability 25. What is the primary objective of a stock buyback program? A) To issue new shares to raise capital B) To retire outstanding shares to increase ownership concentration C) To increase the dividend payout ratio D) To repurchase shares from the open market
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