Strong form of the EMH states that all privately and publicly available information is fully reflected in prices. If strong form efficiency holds, it should not even be possible for insiders like managers, owners, bankers, politicians, or judges using private information to obtain consistent excess profits. Even insiders trading on their information (independent of legal and ethical considerations) are engaging in useless activities.

Bonds with longer maturity have a higher sensitivity to changes in market interest rates and have higher interest rate risk. In this problem, 15-year bond has the longest maturity. Thus, it is the most sensitive to changes in the market interest rates 

Accruals: The main source of financing secured internally has been by means of Accruals. The major accrual items are wages and taxes which in turn create obligations to payments to the employees and to the government.

Yield-to-maturity is the average rate of return that will be earned on a bond if it is bought at the market price and held until it matures. It is the discount rate that makes the present value of its future cash flows equal to its market price. It is like an internal rate of return of a bond.

Calculating yield-to-maturity of a bond selling at par is easy. It is equal to its coupon interest rate. For discount bonds, yield-to-maturity is greater than their coupon rate whereas yield-to-maturity of premium bonds is less than their coupon rate.

Yield-to-maturity has two components. The first one is the return you get from coupon payments, called current yield (annual coupon/current bond price). The second one is the return you get from the change in the value of bond, called capital gains yield ((p₁-p₀)/p₀).

As also understood from the information given, all of the statements in the options about yield-to- maturity are correct, so the correct answer is E.

Although there are many different types and methodologies, an accepted router to establish a financial control infrastructure within a company involves the following steps:

1. Analysis of the Initial Situation: The first step is to conduct an exhaustive, reliable and detailed analysis of the financial situation of the firm in terms of cash, profitability, sales, etc.

2. Preparation of Forecasts and Simulations: On the basis of the initial situation analyzed above and the establishment of a set of parameters or indicators, a set of forecasts and simulations of different contexts and scenarios can be prepared. These simulations are immeasurably helpful in making appropriate decisions on such crucial aspects as investments, profitability, changes in production systems, etc.

3. Detection of Deviations in the Basic Financial Statements: The basic financial statements are balance sheet, the profit and loss account and the cash flow statement. The analyses and tests to determine the deviations from the budgeted figures are fundamental part of financial control, since they permit problems, errors and deviations from the ideal situation or initial objectives to be detected early.

4. Correction of Deviations: Financial control would have very little practical use if the proper decisions relating to corrective actions were not taken to get the company accounts on theright track as previously established in the organization’s general objectives.

The amount of effort required in order to produce goods and services could be described as production value. Therefore the correct answer is D.

Figure 8.1 Components of Working Capital

When a bond investor makes a short-term bond investment, if market interest rates decline when this investment matures, the proceeds from short-term investment will be reinvested at a lower interest rate. Thus, short-term bond investor faces higher reinvestment rate risk and will have a disadvantage when market interest rates decline.

One of the component of the CVP equation is operating profit, not net profit

Remembering that the correlation lies between -1 and +1, the benefit would be eliminated at +1, whereas the maximum diversification benefit would be reached at -1. Therefore, the correct answer is B. 

In our daily lives people try to decide on which products to buy, whether to lease or to buy a car, from which bank to have a credit card, or how much to spend on down payment for a house and how much loan to borrow and for how long. Which major to choose at the university is not a finacial decision, so E is the correct answer. 

In the situations where annual business budgets are prepared, the cash inflows and outflows are estimated referring to the budgeted sales, production, cost figures.

Given sentence is definition of Cash/Bank Reconciliation.

Yield curve plots the relationship between bond yields and maturity. One can infer the future levels of interest rates by examining the shape of the yield curve. In general, yield curves are upward sloping because investors may require more yield to invest in longterm bonds. First, as maturity increases, uncertainty in investing long-term bonds is higher. Second, prices of long-term bonds fluctuate more with the changes in interest rates. Long-term bonds have higher interest rate risk. Upward sloping yield curve implies that short-term interest rates will increase in the future.

As also understood from the information given, the statements in the options I, II, III and IV are correct, so the correct answer is D. The statement in the option V is not correct because of the fact that upward sloping yield curve implies that short-term interest rates will increase in the future.

If the sales revenues of a firm had increased compared to last year while the cost of sales had decreased,  gross profit  must have increased, since gross profit is the difference between sales revenues and cost of sales. 

The production budgets should be prepared in terms of volume of production as paralel to sales budget and in details of product types. It should address the following aspects of production:

• The term of production budget,
• The volume of production to substantiate the sales budget, as well as the required level of inventory,
• The timing of production of each product type,
• The location of production,
• The mandatory activities within the production process,
• The tools to measure the productivity of the production process,
• The plans for labor, machinery and equipments and service requirements,
• The cost figures to determine the cost per unit

Therefore, the correct option is E.

The defined method is regression. It solves a linear regression and hence, forecasts the level of sales given the independent variables.

Adjusted Net Profit Method is used in cash budgets, the other ones are used in sales budget.

A bond is a type of debt security which means that it represents borrowing by the firm. However, rather than getting a loan from a bank or other financial institution, the bond allows the funds to be obtained from a large number of parties under common standardized terms. Bonds can usually only be issued by governments or large, well known firms. Bonds obligate the issuer to make specified payments to the bondholder on specified dates over a specified time period (maturity). These specified payments are in the form of coupon payments and par value. Par value (also called face value or nominal value) indicates how much the issuer will repay to the bondholder at maturity. Par value of Turkish bonds in general is T100 whereas US bonds typically have a par value of $1.000. The coupon rate of a bond determines the coupon (interest) payments. Coupon payments are the periodic payments received by bondholders until the bond matures. The annual coupon payment is equal to the coupon rate times the par value of the bond. Therefore, the correct option is B.

Lower rated companies have higher default risk and their bonds are required to provide very high yield in order to attract investors to invest in these bonds.