Question 1

In a general partnership,each partner is personally liable for:

Accepted Answer

A) the partnership debts that he or she created. 
B) his or her proportionate share of all partnership debts regardless of which partner incurred that debt. 
C) the total debts of the partnership, even if he or she was unaware of those debts. 
D) the debts of the partnership up to the amount he or she invested in the firm. 
E) all personal and partnership debts incurred by any partner, even if he or she was unaware of those debts. 
A) the partnership debts that he or she created. 
B) his or her proportionate share of all partnership debts regardless of which partner incurred that debt. 
C) the total debts of the partnership, even if he or she was unaware of those debts. 
D) the debts of the partnership up to the amount he or she invested in the firm. 
E) all personal and partnership debts incurred by any partner, even if he or she was unaware of those debts.

Question 2

Valerie bought 200 shares of Able stock today.Able stock has been trading for some time on the NYSE.Valerie's purchase occurred in which market?

Accepted Answer

A) Dealer market 
B) Over-the-counter market 
C) Secondary market 
D) Primary market 
E) Tertiary market 
A) Dealer market 
B) Over-the-counter market 
C) Secondary market 
D) Primary market 
E) Tertiary market

Question 3

Which one of the following is a general characteristic of a securities broker?

Accepted Answer

A) Trades from his or her own inventory 
B) Trades only foreign securities 
C) Trades listed securities in an auction market 
D) Trades electronically from any geographic location 
E) Is the principal trader of debt securities 
A) Trades from his or her own inventory 
B) Trades only foreign securities 
C) Trades listed securities in an auction market 
D) Trades electronically from any geographic location 
E) Is the principal trader of debt securities

Question 4

Which one of the following is a working capital decision?

Accepted Answer

A) How should the firm raise additional capital to fund its expansion? 
B) What debt-equity ratio is best suited to the firm? 
C) What is the cost of debt financing? 
D) Which type of debt is best suited to finance the inventory? 
E) How much cash should the firm keep in reserve? 
A) How should the firm raise additional capital to fund its expansion? 
B) What debt-equity ratio is best suited to the firm? 
C) What is the cost of debt financing? 
D) Which type of debt is best suited to finance the inventory? 
E) How much cash should the firm keep in reserve?

Question 5

Limited liability companies are primarily designed to:

Accepted Answer

A) allow a portion of their owners to enjoy limited liability while granting the other portion of their owners control over the entity. 
B) provide the benefits of the corporate structure to foreign-based entities. 
C) spin off a wholly owned subsidiary. 
D) allow companies to reorganize themselves through the bankruptcy process. 
E) provide limited liability while avoiding double taxation. 
A) allow a portion of their owners to enjoy limited liability while granting the other portion of their owners control over the entity. 
B) provide the benefits of the corporate structure to foreign-based entities. 
C) spin off a wholly owned subsidiary. 
D) allow companies to reorganize themselves through the bankruptcy process. 
E) provide limited liability while avoiding double taxation.

Question 6

The primary goal of financial management is to maximize which one of the following for a corporation?

Accepted Answer

A) Current profits 
B) Market share 
C) Number of shares outstanding 
D) Market value of existing stock 
E) Revenue growth 
A) Current profits 
B) Market share 
C) Number of shares outstanding 
D) Market value of existing stock 
E) Revenue growth

Question 7

If you accept a job as a domestic security analyst for a brokerage firm,you are most likely working in which one of the following financial areas?

Accepted Answer

A) International finance 
B) Private placements 
C) Corporate finance 
D) Capital management 
E) Investments 
A) International finance 
B) Private placements 
C) Corporate finance 
D) Capital management 
E) Investments

Question 8

Maria is the sole proprietor of an antique store that she has operated at the same location for the past 16 years.The store rents the space in which it is located but does own all of the inventory and fixtures.The store has an outstanding loan with the local bank but no other debt obligations.There are no specific loan covenants or assets pledged as security for the loan.Due to a sudden and unexpected downturn in the economy,the store is unable to generate sufficient funds to pay the loan payments due to the bank.Which of the following options does the bank have to collect the money it is owed?
I.Sell the inventory and use the cash raised to apply to the debt
II.Sell the store fixtures and use the cash raised to apply to the debt
III.Take funds from Maria's personal account at the bank to pay the store's debt
IV.Sell any assets Maria personally owns and apply the proceeds to the store's debt

Accepted Answer

A) I only 
B) III only 
C) I and II only 
D) I, II, and III only 
E) I, II, III, and IV 
A) I only 
B) III only 
C) I and II only 
D) I, II, and III only 
E) I, II, III, and IV

Question 9

The Sarbanes-Oxley Act in 2002 was prompted by which one of the following from the 1990s?

Accepted Answer

A) Increased stock market volatility 
B) Corporate accounting and financial fraud 
C) Increased executive compensation 
D) Increased foreign investment in U.S. stock markets 
E) Increased use of tax loopholes 
A) Increased stock market volatility 
B) Corporate accounting and financial fraud 
C) Increased executive compensation 
D) Increased foreign investment in U.S. stock markets 
E) Increased use of tax loopholes

Question 10

Which type of financial market,dealer or auction,is best suited to expanding internationally and why?

Accepted Answer

A dealer market is best suited

Question 11

The daily financial operations of a firm are primarily controlled by managing the:

Accepted Answer

A) total debt level. 
B) working capital. 
C) capital structure. 
D) capital budget. 
E) long-term liabilities. 
A) total debt level. 
B) working capital. 
C) capital structure. 
D) capital budget. 
E) long-term liabilities.

Question 12

Which one of the following is most apt to create a situation where an agency conflict could arise?

Accepted Answer

A) Increasing the size of a firm's operations 
B) Downsizing a firm 
C) Separating management from ownership 
D) Decreasing employee turnover 
E) Reducing both management and nonmanagement salaries 
A) Increasing the size of a firm's operations 
B) Downsizing a firm 
C) Separating management from ownership 
D) Decreasing employee turnover 
E) Reducing both management and nonmanagement salaries

Question 13

Which one of the following best matches the primary goal of financial management?

Accepted Answer

A) Increasing the dollar amount of each sale 
B) Increasing traffic flow within the firm's stores 
C) Transforming fixed costs into variable costs 
D) Increasing the firm's liquidity 
E) Increasing the market value of the firm 
A) Increasing the dollar amount of each sale 
B) Increasing traffic flow within the firm's stores 
C) Transforming fixed costs into variable costs 
D) Increasing the firm's liquidity 
E) Increasing the market value of the firm

Question 14

Which one of the following occupations best fits into the international area of finance?

Accepted Answer

A) Bank teller 
B) Treasury bill analyst 
C) Currency trader 
D) Insurance risk manager 
E) Local bank manager 
A) Bank teller 
B) Treasury bill analyst 
C) Currency trader 
D) Insurance risk manager 
E) Local bank manager

Question 15

The potential conflict of interest between a firm's owners and its managers is referred to as which type of conflict?

Accepted Answer

A) Organizational 
B) Structural 
C) Formation 
D) Agency 
E) Territorial 
A) Organizational 
B) Structural 
C) Formation 
D) Agency 
E) Territorial

Question 16

Explain the primary goal of the Sarbanes-Oxley Act in 2002 and discuss whether or not this act appears to be effectively meeting that goal.

Accepted Answer

The primary goal of the Sarbanes-Oxley A

Question 17

Assume a firm has both a controller and a treasurer.Identify the types of responsibilities each should have and explain why their duties should be separated as you suggest.

Accepted Answer

The key point that students need to incl

Question 18

Corporate shareholders:

Accepted Answer

A) are proportionately liable for the firm's debts. 
B) are protected from all losses. 
C) have the ability to change the corporation's bylaws. 
D) receive tax-free distributions since all profits are taxed at the corporate level. 
E) have basically no control over the actual corporation. 
A) are proportionately liable for the firm's debts. 
B) are protected from all losses. 
C) have the ability to change the corporation's bylaws. 
D) receive tax-free distributions since all profits are taxed at the corporate level. 
E) have basically no control over the actual corporation.

Question 19

A corporation:

Accepted Answer

A) is ultimately controlled by its board of directors. 
B) is a legal entity separate from its owners. 
C) is prohibited from entering into contractual agreements. 
D) has its identity defined by its bylaws. 
E) has its existence regulated by the rules set forth in its charter. 
A) is ultimately controlled by its board of directors. 
B) is a legal entity separate from its owners. 
C) is prohibited from entering into contractual agreements. 
D) has its identity defined by its bylaws. 
E) has its existence regulated by the rules set forth in its charter.

Question 20

What is the goal of financial management for a sole proprietorship?

Accepted Answer

A) Maximize net income given the current resources of the firm 
B) Decrease long-term debt to reduce the risk to the owner 
C) Minimize the tax impact on the proprietor 
D) Maximize the market value of the equity 
E) Minimize the reliance on fixed costs 
A) Maximize net income given the current resources of the firm 
B) Decrease long-term debt to reduce the risk to the owner 
C) Minimize the tax impact on the proprietor 
D) Maximize the market value of the equity 
E) Minimize the reliance on fixed costs

In a general partnership,each partner is personally liable for:

Valerie bought 200 shares of Able stock today.Able stock has been trading for some time on the NYSE.Valerie's purchase occurred in which market?

Which one of the following is a general characteristic of a securities broker?

Which one of the following is a working capital decision?

Limited liability companies are primarily designed to:

The primary goal of financial management is to maximize which one of the following for a corporation?

If you accept a job as a domestic security analyst for a brokerage firm,you are most likely working in which one of the following financial areas?

The Sarbanes-Oxley Act in 2002 was prompted by which one of the following from the 1990s?

Which type of financial market,dealer or auction,is best suited to expanding internationally and why?

The daily financial operations of a firm are primarily controlled by managing the:

Which one of the following is most apt to create a situation where an agency conflict could arise?

Which one of the following best matches the primary goal of financial management?

Which one of the following occupations best fits into the international area of finance?

The potential conflict of interest between a firm's owners and its managers is referred to as which type of conflict?

Explain the primary goal of the Sarbanes-Oxley Act in 2002 and discuss whether or not this act appears to be effectively meeting that goal.

Assume a firm has both a controller and a treasurer.Identify the types of responsibilities each should have and explain why their duties should be separated as you suggest.

Corporate shareholders:

A corporation:

What is the goal of financial management for a sole proprietorship?

Financial Statements, Taxes, and Cash Flow

Working With Financial Statements

Introduction to Valuation: The Time Value of Money

Discounted Cash Flow Valuation

Interest Rates and Bond Valuation

Equity Markets and Stock Valuation

Net Present Value and Other Investment Criteria

Making Capital Investment Decisions

Some Lessons From Capital Market History

Risk and Return

Cost of Capital

Leverage and Capital Structure

Dividends and Dividend Policy

Raising Capital

Short-Term Financial Planning

Working Capital Management

International Aspects of Financial Management

Filters

Exam 1: Introduction to Financial Management

In a general partnership,each partner is personally liable for:

Valerie bought 200 shares of Able stock today.Able stock has been trading for some time on the NYSE.Valerie's purchase occurred in which market?

Which one of the following is a general characteristic of a securities broker?

Which one of the following is a working capital decision?

Limited liability companies are primarily designed to:

The primary goal of financial management is to maximize which one of the following for a corporation?

If you accept a job as a domestic security analyst for a brokerage firm,you are most likely working in which one of the following financial areas?

The Sarbanes-Oxley Act in 2002 was prompted by which one of the following from the 1990s?

Which type of financial market,dealer or auction,is best suited to expanding internationally and why?

The daily financial operations of a firm are primarily controlled by managing the:

Which one of the following is most apt to create a situation where an agency conflict could arise?

Which one of the following best matches the primary goal of financial management?

Which one of the following occupations best fits into the international area of finance?

The potential conflict of interest between a firm's owners and its managers is referred to as which type of conflict?

Explain the primary goal of the Sarbanes-Oxley Act in 2002 and discuss whether or not this act appears to be effectively meeting that goal.

Assume a firm has both a controller and a treasurer.Identify the types of responsibilities each should have and explain why their duties should be separated as you suggest.

Corporate shareholders:

A corporation:

What is the goal of financial management for a sole proprietorship?

Financial Statements, Taxes, and Cash Flow

Working With Financial Statements

Introduction to Valuation: The Time Value of Money

Discounted Cash Flow Valuation

Interest Rates and Bond Valuation

Equity Markets and Stock Valuation

Net Present Value and Other Investment Criteria

Making Capital Investment Decisions

Some Lessons From Capital Market History

Risk and Return

Cost of Capital

Leverage and Capital Structure

Dividends and Dividend Policy

Raising Capital

Short-Term Financial Planning

Working Capital Management

International Aspects of Financial Management

Filters