Question 1

One of the major disadvantages of a sole proprietorship is:

Accepted Answer

A)  that there is unlimited liability to the owner. 
B)  the simplicity of decision making. 
C)  low organizational costs. 
D)  low operating costs. 
A)  that there is unlimited liability to the owner. 
B)  the simplicity of decision making. 
C)  low organizational costs. 
D)  low operating costs.

Question 2

Companies that have higher risk than a competitor in the same industry will generally have:

Accepted Answer

A)  to pay a lower interest rate than its competitors. 
B)  a higher relative stock price than its competitors. 
C)  a lower cost of funds than its competitors. 
D)  to pay a higher interest rate than its competitors. 
A)  to pay a lower interest rate than its competitors. 
B)  a higher relative stock price than its competitors. 
C)  a lower cost of funds than its competitors. 
D)  to pay a higher interest rate than its competitors.

Question 3

Existing securities are traded in the secondary market.

Accepted Answer

A) True 
 B)False

Question 4

Increased international competition can be seen as a motivator to emphasize:

Accepted Answer

A)  asset diversification strategies. 
B)  the risk side of the risk-return relationship. 
C)  the return side of the risk-return relationship. 
D)  invest in a new risky project. 
A)  asset diversification strategies. 
B)  the risk side of the risk-return relationship. 
C)  the return side of the risk-return relationship. 
D)  invest in a new risky project.

Question 5

Which of the following is not a true statement about the goal of maximizing shareholder wealth?

Accepted Answer

A)  It takes into account the timing of cash-flows. 
B)  It is a short-run point of view which takes risk into account. 
C)  It considers risk as a factor. 
D)  It is a long-run point of view which takes risk into account. 
A)  It takes into account the timing of cash-flows. 
B)  It is a short-run point of view which takes risk into account. 
C)  It considers risk as a factor. 
D)  It is a long-run point of view which takes risk into account.

Question 6

Money markets refer to those markets dealing with short-term securities having a life of one year or less.

Accepted Answer

A) True 
 B)False

One of the major disadvantages of a sole proprietorship is:

Companies that have higher risk than a competitor in the same industry will generally have:

Existing securities are traded in the secondary market.

Increased international competition can be seen as a motivator to emphasize:

Which of the following is not a true statement about the goal of maximizing shareholder wealth?

Money markets refer to those markets dealing with short-term securities having a life of one year or less.

Review of Accounting

Financial Analysis

Financial Forecasting

Operating and Financial Leverage

Working Capital and the Financing Decision

Current Asset Management

Sources of Short-Term Financing

The Time Value of Money

Valuation and Rates of Return

Cost of Capital

The Capital Budgeting Decision

Risk and Capital Budgeting

Capital Markets

Investment Underwriting

Long-Term Debt and Lease Financing

Common and Preferred Stock Financing

Dividend Policy and Retained Earnings

Derivative Securities

External Growth Through Mergers

International Financial Management

Filters

Exam 1: The Goals and Functions of Financial Management

One of the major disadvantages of a sole proprietorship is:

Companies that have higher risk than a competitor in the same industry will generally have:

Existing securities are traded in the secondary market.

Increased international competition can be seen as a motivator to emphasize:

Which of the following is not a true statement about the goal of maximizing shareholder wealth?

Money markets refer to those markets dealing with short-term securities having a life of one year or less.

Review of Accounting

Financial Analysis

Financial Forecasting

Operating and Financial Leverage

Working Capital and the Financing Decision

Current Asset Management

Sources of Short-Term Financing

The Time Value of Money

Valuation and Rates of Return

Cost of Capital

The Capital Budgeting Decision

Risk and Capital Budgeting

Capital Markets

Investment Underwriting

Long-Term Debt and Lease Financing

Common and Preferred Stock Financing

Dividend Policy and Retained Earnings

Derivative Securities

External Growth Through Mergers

International Financial Management

Filters