Question 1

The chief financial officer (CFO) of a corporation normally reports to the ____ of the company.

Accepted Answer

A)  chairman of the board of directors 
B)  chief operating officer 
C)  controller 
D)  chief executive officer 
A)  chairman of the board of directors 
B)  chief operating officer 
C)  controller 
D)  chief executive officer

Question 2

Although this type of business generates 4.1% of the total U.S. business revenue, ____ make up approximately 72% of all businesses.

Accepted Answer

A)  general partnerships 
B)  corporations 
C)  limited partnerships 
D)  sole-proprietorships 
A)  general partnerships 
B)  corporations 
C)  limited partnerships 
D)  sole-proprietorships

Question 3

Which of the following is NOT a professional certification for careers in the field of finance?

Accepted Answer

A)  Certified Financial Manager (CFM) 
B)  Certified Financial Planner (CFP) 
C)  Certified Financial Analyst (CF
A)  
D)  Certified Treasury Professional (CTP) 
A)  Certified Financial Manager (CFM) 
B)  Certified Financial Planner (CFP) 
C)  Certified Financial Analyst (CF
A)  
D)  Certified Treasury Professional (CTP)

Question 4

The activities of the treasurer include all of the following EXCEPT _____.

Accepted Answer

A)  financial planning 
B)  tax preparation 
C)  credit analysis 
D)  pension fund management 
A)  financial planning 
B)  tax preparation 
C)  credit analysis 
D)  pension fund management

Question 5

Explain the organization and governance in a corporation.

Accepted Answer

The stockholders elect the board of dire

Question 6

Choose the correct option below. 
I. Macroeconomics deals with the economic decisions of individuals, households, and firms.
II. Microeconomics looks at the economy as a whole.

Accepted Answer

A)  Only statement I is correct. 
B)  Only statement II is correct. 
C)  Both statements I and II are correct. 
D)  Neither statement I nor II is correct. 
A)  Only statement I is correct. 
B)  Only statement II is correct. 
C)  Both statements I and II are correct. 
D)  Neither statement I nor II is correct.

Question 7

The accountant's role in the firm is to do all of the following EXCEPT _____.

Accepted Answer

A)  prepare financial statements 
B)  determine the feasibility of certain investment decisions 
C)  determine the tax liability of the firm 
D)  keep records of the firm's performance 
A)  prepare financial statements 
B)  determine the feasibility of certain investment decisions 
C)  determine the tax liability of the firm 
D)  keep records of the firm's performance

Question 8

Many entrepreneurs are ____ diversified with respect to their personal wealth.

Accepted Answer

A)  poorly 
B)  highly 
C)  well 
D)  90% 
A)  poorly 
B)  highly 
C)  well 
D)  90%

Question 9

Maximization of shareholder wealth is not an accounting concept. A corporation's value should be based on _____ value.

Accepted Answer

A)  liquidation 
B)  book 
C)  market 
D)  stock 
A)  liquidation 
B)  book 
C)  market 
D)  stock

Question 10

A corporation that operates ethically will notice certain benefits as it applies to shareholder wealth maximization. With shareholder wealth maximization in mind, all of the following could be experienced by an ethical corporation EXCEPT _____.

Accepted Answer

A)  reduced litigation expense 
B)  greater agency costs 
C)  reduced damages expenses 
D)  a more favorable impression by customers and investors 
A)  reduced litigation expense 
B)  greater agency costs 
C)  reduced damages expenses 
D)  a more favorable impression by customers and investors

Question 11

Which of the following forms of business organization have unlimited liability? 
I. Corporation
II. General partnership

Accepted Answer

A)  Only statement I is correct 
B)  Only statement II is correct 
C)  Both statements I and II are correct 
D)  Neither statement I nor II is correct 
A)  Only statement I is correct 
B)  Only statement II is correct 
C)  Both statements I and II are correct 
D)  Neither statement I nor II is correct

Question 12

Financial management draws heavily on the following related disciplines:

Accepted Answer

A)  accounting 
B)  macroeconomics 
C)  microeconomics 
D)  All of these disciplines are applicable 
A)  accounting 
B)  macroeconomics 
C)  microeconomics 
D)  All of these disciplines are applicable

Question 13

The most important objective of the firm is to _____.

Accepted Answer

A)  make MC=MR 
B)  maximize profits 
C)  minimize agency costs 
D)  None of these are correct 
A)  make MC=MR 
B)  maximize profits 
C)  minimize agency costs 
D)  None of these are correct

Question 14

Techniques identified by John Casey that managers could keep in mind when addressing the ethical dimensions of a business problem include all of the following EXCEPT _____.

Accepted Answer

A)  collecting all the facts bearing on the problem 
B)  clarifying the parameters of the problem 
C)  involving all parties with a financial interest in the outcome 
D)  seeking equity for those who may be affected 
A)  collecting all the facts bearing on the problem 
B)  clarifying the parameters of the problem 
C)  involving all parties with a financial interest in the outcome 
D)  seeking equity for those who may be affected

Question 15

Concern for the interests of the stakeholders can be viewed as the means to the end of _____.

Accepted Answer

A)  maximizing long-term shareholder wealth 
B)  diminishing marginal return 
C)  maximizing risk 
D)  continuing legal litigation 
A)  maximizing long-term shareholder wealth 
B)  diminishing marginal return 
C)  maximizing risk 
D)  continuing legal litigation

Question 16

____ equals the number of shares outstanding times the market price per share.

Accepted Answer

A)  Book value 
B)  Stakeholders wealth 
C)  Total shareholder wealth 
D)  Economic value 
A)  Book value 
B)  Stakeholders wealth 
C)  Total shareholder wealth 
D)  Economic value

Question 17

In a limited partnership, the limited partners may limit their _____.

Accepted Answer

A)  tax liability 
B)  liability 
C)  tax write-off 
D)  ability to attract new products 
A)  tax liability 
B)  liability 
C)  tax write-off 
D)  ability to attract new products

Question 18

The ____ has a goal of serving as a bridge between academic study of finance and the application of financial principles by financial managers.

Accepted Answer

A)  Financial Executives Institute 
B)  Financial Management Association 
C)  American Finance Association 
D)  Institution of Financial Analysts 
A)  Financial Executives Institute 
B)  Financial Management Association 
C)  American Finance Association 
D)  Institution of Financial Analysts

Question 19

What one of the following is a function of the CFO?

Accepted Answer

A)  Control of the marketing functions of the firm 
B)  Effective communication with the investment community about the firm's performance 
C)  Oversight of engineering 
D)  Determination of effective manufacturing strategies 
A)  Control of the marketing functions of the firm 
B)  Effective communication with the investment community about the firm's performance 
C)  Oversight of engineering 
D)  Determination of effective manufacturing strategies

Question 20

Shareholder wealth is measured by the ____.

Accepted Answer

A)  book value of the shareholders' common stock holdings 
B)  market value of the shareholders' common stock holdings 
C)  book value of the company's assets 
D)  market value of the company's assets 
A)  book value of the shareholders' common stock holdings 
B)  market value of the shareholders' common stock holdings 
C)  book value of the company's assets 
D)  market value of the company's assets

Exam 1: The Role and Objective of Financial Management

The chief financial officer (CFO) of a corporation normally reports to the ____ of the company.

Although this type of business generates 4.1% of the total U.S. business revenue, ____ make up approximately 72% of all businesses.

Which of the following is NOT a professional certification for careers in the field of finance?

The activities of the treasurer include all of the following EXCEPT _____.

Explain the organization and governance in a corporation.

Choose the correct option below. I. Macroeconomics deals with the economic decisions of individuals, households, and firms. II. Microeconomics looks at the economy as a whole.

The accountant's role in the firm is to do all of the following EXCEPT _____.

Many entrepreneurs are ____ diversified with respect to their personal wealth.

Maximization of shareholder wealth is not an accounting concept. A corporation's value should be based on _____ value.

A corporation that operates ethically will notice certain benefits as it applies to shareholder wealth maximization. With shareholder wealth maximization in mind, all of the following could be experienced by an ethical corporation EXCEPT _____.

Which of the following forms of business organization have unlimited liability? I. Corporation II. General partnership

Financial management draws heavily on the following related disciplines:

The most important objective of the firm is to _____.

Techniques identified by John Casey that managers could keep in mind when addressing the ethical dimensions of a business problem include all of the following EXCEPT _____.

Concern for the interests of the stakeholders can be viewed as the means to the end of _____.

____ equals the number of shares outstanding times the market price per share.

In a limited partnership, the limited partners may limit their _____.

The ____ has a goal of serving as a bridge between academic study of finance and the application of financial principles by financial managers.

What one of the following is a function of the CFO?

Shareholder wealth is measured by the ____.

The Domestic and International Financial Marketplace

Evaluation of Financial Performance

Financial Planning and Forecasting

The Time Value of Money

Continuous Compounding and Discounting

Fixed Income Securities: Characteristics and Valuation

Common Stock: Characteristics, Valuation, and Issuance

Analysis of Risk and Return

Capital Budgeting and Cash Flow Analysis

Mutually Exclusive Investments Having Unequal Lives

Capital Budgeting: Decision Criteria and Real Option Considerations

Capital Budgeting and Risk

The Cost of Capital

Capital Structure Concepts

Breakeven Analysis

Capital Structure Management in Practice

Dividend Policy

Working Capital Policy and Short-Term Financing

The Management of Cash and Marketable Securities

The Management of Accounts Receivable and Inventories

Lease and Intermediate Term Financing

Financing With Derivatives

Bond Refunding Analysis

Risk Management

International Financial Management

Corporate Restructuring

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