Question 1

The most commonly accepted groups of asset classes include all of the following except

Accepted Answer

A) stocks. 
B) bonds. 
C) machinery and equipment. 
D) real estate. 
A) stocks. 
B) bonds. 
C) machinery and equipment. 
D) real estate. C

Question 2

The increase in oil production in the United States characterizes which of the following key financial concepts presented in this book?

Accepted Answer

A) the Rule of 72 
B) time value of money 
C) risk and return 
D) capital budgeting 
A) the Rule of 72 
B) time value of money 
C) risk and return 
D) capital budgeting D

Question 3

Restricted stock is

Accepted Answer

A) a special type of stock that is not transferable from the current holder to others until specific conditions are satisfied. 
B) a special type of stock that can be converted into corporate bonds after a specific amount of time has elapsed. 
C) a special type of stock that is a result of offering an employee stock ownership plan. 
A) a special type of stock that is not transferable from the current holder to others until specific conditions are satisfied. 
B) a special type of stock that can be converted into corporate bonds after a specific amount of time has elapsed. 
C) a special type of stock that is a result of offering an employee stock ownership plan. A

Question 4

Which of the following will help you make better personal financial decisions?

Accepted Answer

A) knowing finance theory 
B) applying financial tools 
C) auditors 
D) knowing finance theory and applying financial tools. 
A) knowing finance theory 
B) applying financial tools 
C) auditors 
D) knowing finance theory and applying financial tools.

Question 5

These individuals follow a firm, conduct their own evaluations of the company's business activities, and report to the investment community.

Accepted Answer

A) auditors 
B) investment analysts 
C) investment bankers 
D) credit analysts 
A) auditors 
B) investment analysts 
C) investment bankers 
D) credit analysts

Question 6

Which of the following is an example of aligning managers' personal interests with those of the owners?

Accepted Answer

A) allow the managers to have as many perks as they request 
B) pay the managers high salaries 
C) offer the managers an equity stake in the firm 
D) trust the managers' actions as they will always act in the owners' best interest 
A) allow the managers to have as many perks as they request 
B) pay the managers high salaries 
C) offer the managers an equity stake in the firm 
D) trust the managers' actions as they will always act in the owners' best interest

Question 7

These individuals help firms access capital markets and advise managers about how to interact with those capital markets.

Accepted Answer

A) auditors 
B) investment analysts 
C) investment bankers 
D) credit analysts 
A) auditors 
B) investment analysts 
C) investment bankers 
D) credit analysts

Question 8

All of the following are an example of a fiduciary relationship EXCEPT

Accepted Answer

A) a bank employee manages deposits. 
B) a financial advisor advises her clients. 
C) a CEO manages the firm. 
D) the shareholder elects a board member. 
A) a bank employee manages deposits. 
B) a financial advisor advises her clients. 
C) a CEO manages the firm. 
D) the shareholder elects a board member.

Question 9

From the perspective of ownership risk, the best form of business organization is the

Accepted Answer

A) sole proprietorship. 
B) corporation. 
C) partnership. 
D) S corporation. 
A) sole proprietorship. 
B) corporation. 
C) partnership. 
D) S corporation.

Question 10

Methods to minimize agency problem include all EXCEPT

Accepted Answer

A) offer the managers an equity stake in the firm. 
B) award the CEO stock options. 
C) allow the CEO to purchase stock via an employee stock option plan. 
D) allow the CEO to purchase bonds via an employee bond option plan. 
A) offer the managers an equity stake in the firm. 
B) award the CEO stock options. 
C) allow the CEO to purchase stock via an employee stock option plan. 
D) allow the CEO to purchase bonds via an employee bond option plan.

Question 11

The board of directors

Accepted Answer

A) are hired by the CEO. 
B) are elected by shareholders. 
C) have unlimited liability since they oversee the day-to-day operations of the firm. 
D) are employed by the Securities Exchange Commission to ensure its rules and regulations have been met. 
A) are hired by the CEO. 
B) are elected by shareholders. 
C) have unlimited liability since they oversee the day-to-day operations of the firm. 
D) are employed by the Securities Exchange Commission to ensure its rules and regulations have been met.

Question 12

Agency problems exist in which forms of business ownership?

Accepted Answer

A) sole proprietorship 
B) S corporation 
C) partnership 
D) corporation 
A) sole proprietorship 
B) S corporation 
C) partnership 
D) corporation

Question 13

When determining a form of business organization, all of the following are considered EXCEPT

Accepted Answer

A) who owns the firm. 
B) the owners' risks. 
C) the tax ramifications. 
D) the physical location of the business. 
A) who owns the firm. 
B) the owners' risks. 
C) the tax ramifications. 
D) the physical location of the business.

Question 14

From the perspective of control, the best form of business organization is the

Accepted Answer

A) sole proprietorship. 
B) corporation. 
C) partnership. 
D) S corporation. 
A) sole proprietorship. 
B) corporation. 
C) partnership. 
D) S corporation.

Question 15

Corporate stakeholders include all of the following EXCEPT

Accepted Answer

A) employees. 
B) shareholders. 
C) suppliers. 
D) auditors. 
A) employees. 
B) shareholders. 
C) suppliers. 
D) auditors.

Question 16

Which of the following personal decisions is NOT impacted by finance?

Accepted Answer

A) borrowing money to purchase cars or homes 
B) making credit card payments 
C) making retirement decisions 
D) all of these choices are correct. 
A) borrowing money to purchase cars or homes 
B) making credit card payments 
C) making retirement decisions 
D) all of these choices are correct.

Question 17

In order for an angel investor or venture capitalist to exchange capital for ownership in a business that is a sole proprietorship, which of these must happen?

Accepted Answer

A) The business must be re-formed as a partnership. 
B) The owner must give up some control. 
C) The owner must co sign on all loans. 
D) Both the business must be re-formed as a partnership and the owner must give up some control. 
A) The business must be re-formed as a partnership. 
B) The owner must give up some control. 
C) The owner must co sign on all loans. 
D) Both the business must be re-formed as a partnership and the owner must give up some control.

Question 18

An angel investor differs from a venture capitalist because of the

Accepted Answer

A) type of investment. 
B) investment time frame. 
C) size of investment. 
D) voting rights. 
A) type of investment. 
B) investment time frame. 
C) size of investment. 
D) voting rights.

Question 19

The most common type of business in the United States is the

Accepted Answer

A) corporation. 
B) partnership. 
C) sole proprietorship. 
D) hybrid organization such as a limited liability company. 
A) corporation. 
B) partnership. 
C) sole proprietorship. 
D) hybrid organization such as a limited liability company.

Question 20

From a taxation perspective, the form of business organization with the highest business level taxes is the

Accepted Answer

A) sole proprietorship. 
B) corporation. 
C) partnership. 
D) S corporation. 
A) sole proprietorship. 
B) corporation. 
C) partnership. 
D) S corporation.

The most commonly accepted groups of asset classes include all of the following except

The increase in oil production in the United States characterizes which of the following key financial concepts presented in this book?

Restricted stock is

Which of the following will help you make better personal financial decisions?

These individuals follow a firm, conduct their own evaluations of the company's business activities, and report to the investment community.

Which of the following is an example of aligning managers' personal interests with those of the owners?

These individuals help firms access capital markets and advise managers about how to interact with those capital markets.

All of the following are an example of a fiduciary relationship EXCEPT

From the perspective of ownership risk, the best form of business organization is the

Methods to minimize agency problem include all EXCEPT

The board of directors

Agency problems exist in which forms of business ownership?

When determining a form of business organization, all of the following are considered EXCEPT

From the perspective of control, the best form of business organization is the

Corporate stakeholders include all of the following EXCEPT

Which of the following personal decisions is NOT impacted by finance?

In order for an angel investor or venture capitalist to exchange capital for ownership in a business that is a sole proprietorship, which of these must happen?

An angel investor differs from a venture capitalist because of the

The most common type of business in the United States is the

From a taxation perspective, the form of business organization with the highest business level taxes is the

Reviewing Financial Statements

Analyzing Financial Statements

Time Value of Money 1: Analyzing Single Cash Flows

Time Value of Money 2: Analyzing Annuity Cash Flows

Understanding Financial Markets and Institutions

Valuing Bonds

Valuing Stocks

Characterizing Risk and Return

Estimating Risk and Return

Calculating the Cost of Capital

Estimating Cash Flows on Capital Budgeting Projects

Weighing Net Present Value and Other Capital Budgeting Criteria

Working Capital Management and Policies

Financial Planning and Forecasting

Assessing Long-Term Debt, Equity, and Capital Structure

Sharing Firm Wealth: Dividends, Share Repurchases, and Other Payouts

Issuing Capital and the Investment Banking Process

International Corporate Finance

Mergers and Acquisitions and Financial Distress

Filters

Exam 1: Introduction to Financial Management

The most commonly accepted groups of asset classes include all of the following except

The increase in oil production in the United States characterizes which of the following key financial concepts presented in this book?

Restricted stock is

Which of the following will help you make better personal financial decisions?

These individuals follow a firm, conduct their own evaluations of the company's business activities, and report to the investment community.

Which of the following is an example of aligning managers' personal interests with those of the owners?

These individuals help firms access capital markets and advise managers about how to interact with those capital markets.

All of the following are an example of a fiduciary relationship EXCEPT

From the perspective of ownership risk, the best form of business organization is the

Methods to minimize agency problem include all EXCEPT

The board of directors

Agency problems exist in which forms of business ownership?

When determining a form of business organization, all of the following are considered EXCEPT

From the perspective of control, the best form of business organization is the

Corporate stakeholders include all of the following EXCEPT

Which of the following personal decisions is NOT impacted by finance?

In order for an angel investor or venture capitalist to exchange capital for ownership in a business that is a sole proprietorship, which of these must happen?

An angel investor differs from a venture capitalist because of the

The most common type of business in the United States is the

From a taxation perspective, the form of business organization with the highest business level taxes is the

Reviewing Financial Statements

Analyzing Financial Statements

Time Value of Money 1: Analyzing Single Cash Flows

Time Value of Money 2: Analyzing Annuity Cash Flows

Understanding Financial Markets and Institutions

Valuing Bonds

Valuing Stocks

Characterizing Risk and Return

Estimating Risk and Return

Calculating the Cost of Capital

Estimating Cash Flows on Capital Budgeting Projects

Weighing Net Present Value and Other Capital Budgeting Criteria

Working Capital Management and Policies

Financial Planning and Forecasting

Assessing Long-Term Debt, Equity, and Capital Structure

Sharing Firm Wealth: Dividends, Share Repurchases, and Other Payouts

Issuing Capital and the Investment Banking Process

International Corporate Finance

Mergers and Acquisitions and Financial Distress

Filters