Exam 1: The Goals and Functions of Financial Management

Social responsibility and profit maximization are synonymous.

In analysis of a firm's market share value, an investor should not consider:

New issues are sold in the secondary market.

The major difficulty in most insider-trading cases has been:

Proper risk-return management means that:

The financial markets value assets based on the most productive current use.

Inflation has led to phantom profits and undervalued assets.

Capital structure is:

Recently, the emphasis of financial management has been on the relationships between risk and return.

Issues over corporate governance are often agency problems.

Which of the following securities is not included as part of the capital market?

Institutional investors have had increasing influence over corporations with their ability to vote large blocks of stock and replace poor performing boards of directors.

Future financial managers will need to understand:

Timing is not a particularly important consideration in financial decisions.

Profits of sole proprietorships are taxed at corporate tax rates.

Secondary markets are the markets that trade previously issued securities.

Corporate governance is the:

In terms of size of revenues and profits, the corporation is by far the most important form of business organization in Canada.

Inflation:

Financial markets exist as a vast global network of individuals and financial institutions that may be lenders, borrowers, or owners of public companies worldwide.