Question 1

If a commercial bank in which funds you have deposited fails (goes out of business), the FDIC would give you back your money.

Accepted Answer

A) True 
 B)False  False

Question 2

A bond is a form of earnings distributed to a firm's stockholders.

Accepted Answer

A) True 
 B)False  False

Question 3

Preferred stockholders bear the ultimate rewards and risks of ownership.

Accepted Answer

A) True 
 B)False  False

Question 4

_____ were originally set up to encourage personal savings and provide mortgages to local home buyers.

Accepted Answer

A)  Commercial banks 
B)  Savings banks 
C)  Credit unions 
D)  Brokerage firms 
A)  Commercial banks 
B)  Savings banks 
C)  Credit unions 
D)  Brokerage firms

Question 5

_____ 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 6

Because of the money-multiplier effect, the Fed changes reserve requirements _____.

Accepted Answer

A)  only rarely 
B)  often 
C)  every month 
D)  every six months 
A)  only rarely 
B)  often 
C)  every month 
D)  every six months

Question 7

About 10 years ago you founded an energy company that operates as a privately-held corporation with only limited stock ownership. You are considering selling stock to the public for the first time through an initial public offering. All of the following are disadvantages for taking a company public except:

Accepted Answer

A)  going public is costly. 
B)  financial reports would have to be made available to the public. 
C)  you would get an influx of cash that doesn't have to be paid back. 
D)  you would be responsible to shareholders who would expect favorable short-term performance. 
A)  going public is costly. 
B)  financial reports would have to be made available to the public. 
C)  you would get an influx of cash that doesn't have to be paid back. 
D)  you would be responsible to shareholders who would expect favorable short-term performance.

Question 8

A(n) _____ market deals in new financial assets.

Accepted Answer

A)  initial 
B)  primary 
C)  opening 
D)  key 
A)  initial 
B)  primary 
C)  opening 
D)  key

Question 9

You own a share of stock in Hershey Foods. In reviewing the stock information in the Wall Street Journal, you note that Hershey's PE ratio is 19. The PE ratio indicates:

Accepted Answer

A)  the price Hershey Foods stock is trading at now. 
B)  the amount investors are willing to pay for every $1 of Hershey Food's earnings. 
C)  the percentage of Hershey Food's earnings paid out in dividends. 
D)  the amount you can expect to earn on the stock. 
A)  the price Hershey Foods stock is trading at now. 
B)  the amount investors are willing to pay for every $1 of Hershey Food's earnings. 
C)  the percentage of Hershey Food's earnings paid out in dividends. 
D)  the amount you can expect to earn on the stock.

Question 10

If you're a farmer who needs help clearing his fields and has plenty of food to spare, you might enter into a _____ transaction with a laborer who has time to clear fields but not enough food.

Accepted Answer

A)  sharecropping 
B)  barter 
C)  tenant farming 
D)  bargaining 
A)  sharecropping 
B)  barter 
C)  tenant farming 
D)  bargaining

Question 11

Stockholders' equity is also called owner's equity.

Accepted Answer

A) True 
 B)False

Question 12

_____, which lists the stocks of 500 large U.S. companies, is a broad measure of stock performance.

Accepted Answer

A)  The Dow Jones Industrial Average 
B)  The Commodities Board 
C)  Standard & Poor's Composite Index 
D)  Moody's Highs and Lows 
A)  The Dow Jones Industrial Average 
B)  The Commodities Board 
C)  Standard & Poor's Composite Index 
D)  Moody's Highs and Lows

Question 13

______ employ finance professionals as loan officers to work with clients requesting personal or business loans.

Accepted Answer

A)  Corporations 
B)  Commercial banks 
C)  Investment houses 
D)  Accounting firms 
A)  Corporations 
B)  Commercial banks 
C)  Investment houses 
D)  Accounting firms

Question 14

What is cumulative preferred stock?

Accepted Answer

Cumulative preferred stock is

Question 15

Thrift institutions were originally set up to encourage personal savings.

Accepted Answer

A) True 
 B)False

Question 16

The government tracks the money supply by calculating _____, which includes the most liquid forms of money.

Accepted Answer

A)  M-1 
B)  M-2 
C)  M-10 
D)  M-15 
A)  M-1 
B)  M-2 
C)  M-10 
D)  M-15

Question 17

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.
-During the first year of operation, _____ will be among your most valuable financial skills.

Accepted Answer

A)  managing cash 
B)  following a budget 
C)  managing accounts receivable and payable 
D)  all of these 
A)  managing cash 
B)  following a budget 
C)  managing accounts receivable and payable 
D)  all of these

Question 18

_____ deposits are checking accounts that pay given sums to "payees" when they're ordered.

Accepted Answer

A)  Order 
B)  Demand 
C)  Command 
D)  Payout 
A)  Order 
B)  Demand 
C)  Command 
D)  Payout

Question 19

When investors look at the overall quality of a company, all of the following are among the basic questions that they ask except.

Accepted Answer

A)  How well is it managed 
B)  What is the future of its industry 
C)  How much capital does it take in each year 
D)  How is it doing relative to competitors 
A)  How well is it managed 
B)  What is the future of its industry 
C)  How much capital does it take in each year 
D)  How is it doing relative to competitors

Question 20

The best-known stock market is the American Stock Exchange.

Accepted Answer

A) True 
 B)False

If a commercial bank in which funds you have deposited fails (goes out of business), the FDIC would give you back your money.

A bond is a form of earnings distributed to a firm's stockholders.

Preferred stockholders bear the ultimate rewards and risks of ownership.

_____ were originally set up to encourage personal savings and provide mortgages to local home buyers.

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

Because of the money-multiplier effect, the Fed changes reserve requirements _____.

A(n) _____ market deals in new financial assets.

You own a share of stock in Hershey Foods. In reviewing the stock information in the Wall Street Journal, you note that Hershey's PE ratio is 19. The PE ratio indicates:

If you're a farmer who needs help clearing his fields and has plenty of food to spare, you might enter into a _____ transaction with a laborer who has time to clear fields but not enough food.

Stockholders' equity is also called owner's equity.

_____, which lists the stocks of 500 large U.S. companies, is a broad measure of stock performance.

______ employ finance professionals as loan officers to work with clients requesting personal or business loans.

What is cumulative preferred stock?

Thrift institutions were originally set up to encourage personal savings.

The government tracks the money supply by calculating _____, which includes the most liquid forms of money.

_____ deposits are checking accounts that pay given sums to "payees" when they're ordered.

When investors look at the overall quality of a company, all of the following are among the basic questions that they ask except.

The best-known stock market is the American Stock Exchange.

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

If a commercial bank in which funds you have deposited fails (goes out of business), the FDIC would give you back your money.

A bond is a form of earnings distributed to a firm's stockholders.

Preferred stockholders bear the ultimate rewards and risks of ownership.

_____ were originally set up to encourage personal savings and provide mortgages to local home buyers.

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

Because of the money-multiplier effect, the Fed changes reserve requirements _____.

A(n) _____ market deals in new financial assets.

You own a share of stock in Hershey Foods. In reviewing the stock information in the Wall Street Journal, you note that Hershey's PE ratio is 19. The PE ratio indicates:

If you're a farmer who needs help clearing his fields and has plenty of food to spare, you might enter into a _____ transaction with a laborer who has time to clear fields but not enough food.

Stockholders' equity is also called owner's equity.

_____, which lists the stocks of 500 large U.S. companies, is a broad measure of stock performance.

______ employ finance professionals as loan officers to work with clients requesting personal or business loans.

What is cumulative preferred stock?

Thrift institutions were originally set up to encourage personal savings.

The government tracks the money supply by calculating _____, which includes the most liquid forms of money.

_____ deposits are checking accounts that pay given sums to "payees" when they're ordered.

When investors look at the overall quality of a company, all of the following are among the basic questions that they ask except.

The best-known stock market is the American Stock Exchange.

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