Question 1

Bruce is a security analyst working for Goldman Sachs JB Were.His job falls into which of the following areas of finance?

Accepted Answer

A) international finance 
B) financial institutions 
C) corporate finance 
D) capital management 
E) investments 
A) international finance 
B) financial institutions 
C) corporate finance 
D) capital management 
E) investments

Question 2

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 3

Which of the following are effective means of aligning management goals with shareholder interests?
I.employee share options
II.threat of a takeover
III.management bonuses tied to performance goals
IV.threat of a proxy fight

Accepted Answer

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

Question 4

Which of the following individuals commonly use finance in the course of their job?
I.chief financial officers
II.accountants
III.security analysts
IV.strategic managers

Accepted Answer

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

Question 5

Any situation where a conflict may arise between the firm's owners and its
Managers is referred to as a(n):

Accepted Answer

A) organisational problem 
B) personnel conflict 
C) agency problem 
D) control issue 
E) compensation issue 
A) organisational problem 
B) personnel conflict 
C) agency problem 
D) control issue 
E) compensation issue

Question 6

A primary financial market is:

Accepted Answer

A) one that involves the sale of existing securities 
B) one that offers securities with the highest expected return 
C) one that offers the greatest choice of shares and debentures 
D) one that offers only securities with the highest historical return 
E) one that involves the sale of securities for the first time 
A) one that involves the sale of existing securities 
B) one that offers securities with the highest expected return 
C) one that offers the greatest choice of shares and debentures 
D) one that offers only securities with the highest historical return 
E) one that involves the sale of securities for the first time

Question 7

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 8

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

Accepted Answer

A) organisational 
B) structural 
C) formation 
D) agency 
E) territorial 
A) organisational 
B) structural 
C) formation 
D) agency 
E) territorial

Question 9

Which one of the following applies to a general partnership?

Accepted Answer

A) The firm's operations must be controlled by a single partner. 
B) Any one of the partners can be held solely liable for all of the partnership's debt. 
C) The profits of the firm are taxed as a separate entity. 
D) Each partner's liability for the firm's debts is limited to each partner's investment in the firm. 
E) The profits of a general partnership are taxed the same as those of a corporation. 
A) The firm's operations must be controlled by a single partner. 
B) Any one of the partners can be held solely liable for all of the partnership's debt. 
C) The profits of the firm are taxed as a separate entity. 
D) Each partner's liability for the firm's debts is limited to each partner's investment in the firm. 
E) The profits of a general partnership are taxed the same as those of a corporation.

Question 10

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 11

Todd and Cathy created a firm that is a separate legal entity and will share ownership of that firm on a 50/50 basis.Which type of entity did they create if they have no personal liability for the firm's debts?

Accepted Answer

A) limited partnership 
B) corporation 
C) sole proprietorship 
D) general partnership 
E) public company 
A) limited partnership 
B) corporation 
C) sole proprietorship 
D) general partnership 
E) public company

Question 12

Which one of the following is most likely to align management's priorities with shareholders' interests?

Accepted Answer

A) increasing employee retirement benefits 
B) compensating managers with shares that must be held for 3 years before the shares can be sold 
C) allowing a manager to decorate his or her own office once he or she has been in that office for a period of 3 years or more 
D) increasing the number of paid holidays that long-term employees are entitled to receive 
E) allowing employees to retire early with full retirement benefits 
A) increasing employee retirement benefits 
B) compensating managers with shares that must be held for 3 years before the shares can be sold 
C) allowing a manager to decorate his or her own office once he or she has been in that office for a period of 3 years or more 
D) increasing the number of paid holidays that long-term employees are entitled to receive 
E) allowing employees to retire early with full retirement benefits

Question 13

Which of the following are advantages of the corporate form of organisation?
I.ability to raise large sums of equity capital
II.ease of ownership transfer
III.both profits and dividends are taxed
IV.limited liability for all owners

Accepted Answer

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

Question 14

A negotiated sale of securities by an issuer to a specific buyer is called a(n):

Accepted Answer

A) public offering 
B) secondary placement 
C) specialised sale 
D) independent placement 
E) private placement 
A) public offering 
B) secondary placement 
C) specialised sale 
D) independent placement 
E) private placement

Question 15

Which one of the following is a capital structure decision?

Accepted Answer

A) determining the optimal inventory level 
B) establishing the preferred debt-equity level 
C) selecting new equipment to purchase 
D) setting the terms of sale for credit sales 
E) determining when suppliers should be paid 
A) determining the optimal inventory level 
B) establishing the preferred debt-equity level 
C) selecting new equipment to purchase 
D) setting the terms of sale for credit sales 
E) determining when suppliers should be paid

Question 16

The person responsible for managing a firm's cash flow,credits and CAPEX (capital expenditure)is called:

Accepted Answer

A) a broker 
B) a stakeholder 
C) a chief accountant 
D) a controller 
E) a treasurer 
A) a broker 
B) a stakeholder 
C) a chief accountant 
D) a controller 
E) a treasurer

Question 17

Financial institutions are:

Accepted Answer

A) institutions that primarily invest in real estate 
B) institutions that primarily deal in financial matters 
C) institutions that deal in second-hand equipment 
D) institutions that engage in manufacturing 
E) None of these 
A) institutions that primarily invest in real estate 
B) institutions that primarily deal in financial matters 
C) institutions that deal in second-hand equipment 
D) institutions that engage in manufacturing 
E) None of these

Question 18

Elizabeth is employed as a loans officer for the Commonwealth Bank.Her job falls into which of the following areas of finance?

Accepted Answer

A) international finance 
B) financial institutions 
C) corporate finance 
D) capital management 
E) investments 
A) international finance 
B) financial institutions 
C) corporate finance 
D) capital management 
E) investments

Question 19

Which of the following is an example of a secondary market transaction?

Accepted Answer

A) ANZ bank issues new shares to a large funds manager in a private placement. 
B) The Government issues new long term bonds. 
C) Mary sells 1000 Qantas shares through her broker. 
D) BHP issues new bonds which will mature in ten years. 
E) None of these are secondary market transactions. 
A) ANZ bank issues new shares to a large funds manager in a private placement. 
B) The Government issues new long term bonds. 
C) Mary sells 1000 Qantas shares through her broker. 
D) BHP issues new bonds which will mature in ten years. 
E) None of these are secondary market transactions.

Question 20

The management of a firm's cash,inventory,and payables is referred to as:

Accepted Answer

A) cash-flow forecasting 
B) asset management 
C) capital management 
D) cash budgeting 
E) working capital management 
A) cash-flow forecasting 
B) asset management 
C) capital management 
D) cash budgeting 
E) working capital management

Bruce is a security analyst working for Goldman Sachs JB Were.His job falls into which of the following areas of finance?

A corporation:

Which of the following are effective means of aligning management goals with shareholder interests? I.employee share options II.threat of a takeover III.management bonuses tied to performance goals IV.threat of a proxy fight

Which of the following individuals commonly use finance in the course of their job? I.chief financial officers II.accountants III.security analysts IV.strategic managers

Any situation where a conflict may arise between the firm's owners and its Managers is referred to as a(n):

A primary financial market is:

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

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

Which one of the following applies to a general partnership?

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

Todd and Cathy created a firm that is a separate legal entity and will share ownership of that firm on a 50/50 basis.Which type of entity did they create if they have no personal liability for the firm's debts?

Which one of the following is most likely to align management's priorities with shareholders' interests?

Which of the following are advantages of the corporate form of organisation? I.ability to raise large sums of equity capital II.ease of ownership transfer III.both profits and dividends are taxed IV.limited liability for all owners

A negotiated sale of securities by an issuer to a specific buyer is called a(n):

Which one of the following is a capital structure decision?

The person responsible for managing a firm's cash flow,credits and CAPEX (capital expenditure)is called:

Financial institutions are:

Elizabeth is employed as a loans officer for the Commonwealth Bank.Her job falls into which of the following areas of finance?

Which of the following is an example of a secondary market transaction?

The management of a firm's cash,inventory,and payables is referred to as:

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

Long-Term Financing

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

Bruce is a security analyst working for Goldman Sachs JB Were.His job falls into which of the following areas of finance?

A corporation:

Which of the following are effective means of aligning management goals with shareholder interests? I.employee share options II.threat of a takeover III.management bonuses tied to performance goals IV.threat of a proxy fight

Which of the following individuals commonly use finance in the course of their job? I.chief financial officers II.accountants III.security analysts IV.strategic managers

Any situation where a conflict may arise between the firm's owners and its Managers is referred to as a(n):

A primary financial market is:

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

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

Which one of the following applies to a general partnership?

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

Todd and Cathy created a firm that is a separate legal entity and will share ownership of that firm on a 50/50 basis.Which type of entity did they create if they have no personal liability for the firm's debts?

Which one of the following is most likely to align management's priorities with shareholders' interests?

Which of the following are advantages of the corporate form of organisation? I.ability to raise large sums of equity capital II.ease of ownership transfer III.both profits and dividends are taxed IV.limited liability for all owners

A negotiated sale of securities by an issuer to a specific buyer is called a(n):

Which one of the following is a capital structure decision?

The person responsible for managing a firm's cash flow,credits and CAPEX (capital expenditure)is called:

Financial institutions are:

Elizabeth is employed as a loans officer for the Commonwealth Bank.Her job falls into which of the following areas of finance?

Which of the following is an example of a secondary market transaction?

The management of a firm's cash,inventory,and payables is referred to as:

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

Long-Term Financing

Leverage and Capital Structure

Dividends and Dividend Policy

Raising Capital

Short-Term Financial Planning

Working Capital Management

International Aspects of Financial Management

Filters