Question 1

For financial transactions to occur, money must _____.

Accepted Answer

A)  be manufactured 
B)  change hands 
C)  be saved 
D)  be privately held 
A)  be manufactured 
B)  change hands 
C)  be saved 
D)  be privately held

Question 2

Finance companies can be characterized as deposit institutions because they provide traditional banking services.

Accepted Answer

A) True 
 B)False

Question 3

SCENARIO-BASED
You and a friend want to open new pet grooming and pet services shop. Once established, you intend to open a second store in a larger town 20 miles away. If store number two is a success, you plan to start franchising your company.
-Your first business loan will probably entail pledging personal or business assets in the form of _____.

Accepted Answer

A)  owner's equity 
B)  collateral 
C)  a current account 
D)  private insurance 
A)  owner's equity 
B)  collateral 
C)  a current account 
D)  private insurance

Question 4

As founder and CEO of a growing public company, you are considering issuing shares of stock to finance an expansion. All of the following statements about stock are true except:

Accepted Answer

A)  money obtained from the sale of stock does not have to be paid back. 
B)  if you issue stock instead of incurring debt to finance your expansion, you avoid paying interest. 
C)  if you issue stock to the public, your percentage ownership of the company will not change. 
D)  if the company does well, you could distribute some of its earnings by paying dividends. 
A)  money obtained from the sale of stock does not have to be paid back. 
B)  if you issue stock instead of incurring debt to finance your expansion, you avoid paying interest. 
C)  if you issue stock to the public, your percentage ownership of the company will not change. 
D)  if the company does well, you could distribute some of its earnings by paying dividends.

Question 5

_____ stock gives its owner the option of exchanging it for common stock.

Accepted Answer

A)  Convertible preferred 
B)  Dividend payable 
C)  Cumulative preferred 
D)  Bonded 
A)  Convertible preferred 
B)  Dividend payable 
C)  Cumulative preferred 
D)  Bonded

Question 6

If a bank issues you a line of credit, you can borrow:

Accepted Answer

A)  money for less than a year. 
B)  up to a specified amount as the need arises. 
C)  capital for one to five years. 
D)  on a personal account for five years or more. 
A)  money for less than a year. 
B)  up to a specified amount as the need arises. 
C)  capital for one to five years. 
D)  on a personal account for five years or more.

Question 7

What is a budget and how is it used by the owner of a new business

Accepted Answer

A budget is a preliminary financial plan

Question 8

Thrift institutions were originally set up to encourage personal savings.

Accepted Answer

A) True 
 B)False

Question 9

_____ stock requires a corporation to pay all current and missed preferred dividends before paying any common stock dividends.

Accepted Answer

A)  Convertible preferred 
B)  Cumulative preferred 
C)  Couched convertible 
D)  Prospectus launched 
A)  Convertible preferred 
B)  Cumulative preferred 
C)  Couched convertible 
D)  Prospectus launched

Question 10

A market index is a written offer to sell securities that describes the business and operations of the issuer.

Accepted Answer

A) True 
 B)False

Question 11

You're the president of a savings bank that just took in a deposit of $100. Your bank's reserve requirement is 10 percent. Using the concept of the money multiplier, the deposit will generate how much in loans

Accepted Answer

A)  $90 
B)  $1,000 
C)  $900 
D)  $10 
A)  $90 
B)  $1,000 
C)  $900 
D)  $10

Question 12

_____is the process of monitoring cash inflows and outflows to ensure that a company has sufficient cash on hand.

Accepted Answer

A)  Capital budgeting 
B)  Cash budgeting 
C)  Capital management 
D)  Cash-flow management 
A)  Capital budgeting 
B)  Cash budgeting 
C)  Capital management 
D)  Cash-flow management

Question 13

The _____ rate is the rate of interest that the Fed charges member banks.

Accepted Answer

A)  carryover 
B)  FDIC (Federal Deposit Insurance Corporation) 
C)  discount 
D)  operations 
A)  carryover 
B)  FDIC (Federal Deposit Insurance Corporation) 
C)  discount 
D)  operations

Question 14

A finance professional may advance from the position of _____ analyst to a managerial position.

Accepted Answer

A)  lead 
B)  junior 
C)  primary 
D)  senior 
A)  lead 
B)  junior 
C)  primary 
D)  senior

Question 15

What is cumulative preferred stock

Accepted Answer

Cumulative preferred stock is

Question 16

In conducting open market operations, the Fed sells and purchases U.S. government bonds on the open market.

Accepted Answer

A) True 
 B)False

Question 17

If your company does well, stockholders may benefit either through appreciation in the value of their stock or through distributed earnings called _____.

Accepted Answer

A)  Preferred payouts 
B)  Dividends 
C)  Bonds 
D)  Stock conversions 
A)  Preferred payouts 
B)  Dividends 
C)  Bonds 
D)  Stock conversions

Question 18

Money market mutual funds pay interest to investors who have pooled funds to make short-term loans to businesses and government bodies.

Accepted Answer

A) True 
 B)False

Question 19

What is a savings bank

Accepted Answer

A savings bank is a financial

Question 20

SCENARIO-BASED
Privately held for 18 years, Superior Chemicals Inc. has finally decided to go public. The owners are in the process of deciding whether to use debt or equity financing to finance growth after the initial public offering.
-If Superior sells stock, it will be opting for debt financing.

Accepted Answer

A) True 
 B)False

For financial transactions to occur, money must _____.

Finance companies can be characterized as deposit institutions because they provide traditional banking services.

As founder and CEO of a growing public company, you are considering issuing shares of stock to finance an expansion. All of the following statements about stock are true except:

_____ stock gives its owner the option of exchanging it for common stock.

If a bank issues you a line of credit, you can borrow:

What is a budget and how is it used by the owner of a new business

Thrift institutions were originally set up to encourage personal savings.

_____ stock requires a corporation to pay all current and missed preferred dividends before paying any common stock dividends.

A market index is a written offer to sell securities that describes the business and operations of the issuer.

You're the president of a savings bank that just took in a deposit of $100. Your bank's reserve requirement is 10 percent. Using the concept of the money multiplier, the deposit will generate how much in loans

_____is the process of monitoring cash inflows and outflows to ensure that a company has sufficient cash on hand.

The _____ rate is the rate of interest that the Fed charges member banks.

A finance professional may advance from the position of _____ analyst to a managerial position.

What is cumulative preferred stock

In conducting open market operations, the Fed sells and purchases U.S. government bonds on the open market.

If your company does well, stockholders may benefit either through appreciation in the value of their stock or through distributed earnings called _____.

Money market mutual funds pay interest to investors who have pooled funds to make short-term loans to businesses and government bodies.

What is a savings bank

SCENARIO-BASED Privately held for 18 years, Superior Chemicals Inc. has finally decided to go public. The owners are in the process of deciding whether to use debt or equity financing to finance growth after the initial public offering. -If Superior sells stock, it will be opting for debt financing.

The Foundations of Business

Business Ethics and Social Responsibility

Business in a Global Environment

Selecting a Form of Business Ownership

The Challenges of Starting a Business

Managing for Business Success

Recruiting, Motivating, and Keeping Quality Employees

Teamwork and Communications

Marketing: Providing Value to Customers

Product Design and Development

Operations Management in Manufacturing and Service Industries

The Role of Accounting in Business

Personal Finances

Managing Information and Technology

The Legal and Regulatory Environment of Business

Filters

Exam 13: Managing Financial Resources

For financial transactions to occur, money must _____.

Finance companies can be characterized as deposit institutions because they provide traditional banking services.

As founder and CEO of a growing public company, you are considering issuing shares of stock to finance an expansion. All of the following statements about stock are true except:

_____ stock gives its owner the option of exchanging it for common stock.

If a bank issues you a line of credit, you can borrow:

What is a budget and how is it used by the owner of a new business

Thrift institutions were originally set up to encourage personal savings.

_____ stock requires a corporation to pay all current and missed preferred dividends before paying any common stock dividends.

A market index is a written offer to sell securities that describes the business and operations of the issuer.

You're the president of a savings bank that just took in a deposit of $100. Your bank's reserve requirement is 10 percent. Using the concept of the money multiplier, the deposit will generate how much in loans

_____is the process of monitoring cash inflows and outflows to ensure that a company has sufficient cash on hand.

The _____ rate is the rate of interest that the Fed charges member banks.

A finance professional may advance from the position of _____ analyst to a managerial position.

What is cumulative preferred stock

In conducting open market operations, the Fed sells and purchases U.S. government bonds on the open market.

If your company does well, stockholders may benefit either through appreciation in the value of their stock or through distributed earnings called _____.

Money market mutual funds pay interest to investors who have pooled funds to make short-term loans to businesses and government bodies.

What is a savings bank

The Foundations of Business

Business Ethics and Social Responsibility

Business in a Global Environment

Selecting a Form of Business Ownership

The Challenges of Starting a Business

Managing for Business Success

Recruiting, Motivating, and Keeping Quality Employees

Teamwork and Communications

Marketing: Providing Value to Customers

Product Design and Development

Operations Management in Manufacturing and Service Industries

The Role of Accounting in Business

Personal Finances

Managing Information and Technology

The Legal and Regulatory Environment of Business

Filters