İŞLETME FİNANSI II - Deneme Sınavı - 2

Market risk can be categorized into four main classes: equity prices, commodity prices, foreign exchange rates, and interest rates.

Value at Risk is the measure of the worst expected loss on a portfolio of instruments resulting from market movements over a given time horizon and a pre-defined confidence level

The Monte Carlo (MC) approach is based on the idea of simulating the changes in the portfolio value by randomly drawing from the imposed theoretical distribution function.

Operational risk is simply any event that disrupts the normal flow of business processes and which generates financial loss or damage to the image of the bank.

Operational risk includes human error, fraud and malice, failures of information systems, problems related to personnel management, commercial disputes, accidents, fires, and floods. Bankruptcy is related to credit risk.

There is ample evidence that daily returns are far from normally distributed, but instead display very significant leptokurtosis and skewness. Leptokurtosis indicates tails that are fatter than those of the normal distribution.

A derivative is a bilateral contract or payments exchange agreement whose value derives, as its name implies, from the value of an underlying asset or underlying reference rate or index.

Options portfolio risks are very different than vanilla products and can be classified as Delta, Gamma, Vega, Theta and Rho.

Hedging with Derivative Assets involves using futures, options, forwards. This category also includes exotic options, swaps, swaptions, engineered custom products etc., but not bonds.

The expected return is the weighted sum of expected returns with associated probabilities. The possible returns can be derived from past
returns or may all be arbitrar

Positive economic profits (or positive net present value projects) can stem from two sources: i) market imperfections, ii) creating competitive advantage. The correct answer is D.

The date two business days before the date of record is called ex-dividend date.

Stock repurchase ist he distribution of earnings to shareholders by repurchasing shares of its stock.

Tender Offer; The company can repurchase a number of shares through a tender offer in which it offers to buy shares at a specified price.

A company can repurchase stock to minimize the “dilution effect” associated with exercising the stock options that have been given to employees as bonuses.

Stock split is an action taken by a company to increase the number of shares outstanding.

The dividend irrelevance theory states that a company’s dividend policy has no effect on whether its value or its cost of capital.

There are no taxes and transaction costs

Bird-in-the-hand dividend theory states that a company’s value will be maximized by setting a high dividend payout ratio.

Dividend signaling hypothesis, also called, dividend information content hypothesis stating that if there is a larger than expected dividend increase, it signals to investors that managers anticipate bright future prospects of the company. On the contrary, if the dividend decreases or it is less than expected, it signals to investors that managers forecast poor future earnings.