Question 1

Investments that promise the highest returns tend to involve the most risk.

Accepted Answer

A) True 
 B)False

Question 2

Increasing leverage decreases management's flexibility in future financing decisions.

Accepted Answer

A) True 
 B)False

Question 3

Explain the concept of risk-return trade-off.

Accepted Answer

Financial managers strive to m

Question 4

Mitch raises money from wealthy individuals and institutional investors for a variety of promising new companies.In exchange,he will become part owner of those businesses.Mitch is a(n)________.

Accepted Answer

A)  underwriter 
B)  venture capitalist 
C)  entrepreneur 
D)  angel investor 
A)  underwriter 
B)  venture capitalist 
C)  entrepreneur 
D)  angel investor

Question 5

Unlike private equity funds,which tend to focus on small,start-up companies,venture capital funds invest in all types of businesses,including mature ones.

Accepted Answer

A) True 
 B)False

Question 6

A(n)________ is a document that specifies the funds a firm will need for a period of time,the time of inflows and outflows,and the most appropriate uses of funds.

Accepted Answer

A) venture capitalists 
B) private placements 
C) factoring 
D) capital investment analysis 
E) debt capital
F)equity capital
G)financial plan
H)leverage buyout
I)private equity funds
J)divesture
K)marketable securities
L)financial manager
M)tender offer
N)trade credit
O)leverage
P)capital structure
Q)asset intensity
R)bonds 
A) venture capitalists 
B) private placements 
C) factoring 
D) capital investment analysis 
E) debt capital
F)equity capital
G)financial plan
H)leverage buyout
I)private equity funds
J)divesture
K)marketable securities
L)financial manager
M)tender offer
N)trade credit
O)leverage
P)capital structure
Q)asset intensity
R)bonds

Question 7

_____ are low-risk securities that either have short maturities or can easily be sold in secondary markets.

Accepted Answer

A) venture capitalists 
B) private placements 
C) factoring 
D) capital investment analysis 
E) debt capital
F)equity capital
G)financial plan
H)leverage buyout
I)private equity funds
J)divesture
K)marketable securities
L)financial manager
M)tender offer
N)trade credit
O)leverage
P)capital structure
Q)asset intensity
R)bonds 
A) venture capitalists 
B) private placements 
C) factoring 
D) capital investment analysis 
E) debt capital
F)equity capital
G)financial plan
H)leverage buyout
I)private equity funds
J)divesture
K)marketable securities
L)financial manager
M)tender offer
N)trade credit
O)leverage
P)capital structure
Q)asset intensity
R)bonds

Question 8

Certificates of indebtedness sold to raise long-term funds for a corporation or government agency are known as _____.

Accepted Answer

A) venture capitalists 
B) private placements 
C) factoring 
D) capital investment analysis 
E) debt capital
F)equity capital
G)financial plan
H)leverage buyout
I)private equity funds
J)divesture
K)marketable securities
L)financial manager
M)tender offer
N)trade credit
O)leverage
P)capital structure
Q)asset intensity
R)bonds 
A) venture capitalists 
B) private placements 
C) factoring 
D) capital investment analysis 
E) debt capital
F)equity capital
G)financial plan
H)leverage buyout
I)private equity funds
J)divesture
K)marketable securities
L)financial manager
M)tender offer
N)trade credit
O)leverage
P)capital structure
Q)asset intensity
R)bonds

Question 9

Short-term sources of funds are loans that are repaid within one year.

Accepted Answer

A) True 
 B)False

Question 10

Why do firms divest assets?

Accepted Answer

Sometimes divestitures result from prior

Question 11

The senior financial manager has the title of ________.

Accepted Answer

A)  chief financial officer 
B)  chief operations officer 
C)  treasurer 
D)  controller 
A)  chief financial officer 
B)  chief operations officer 
C)  treasurer 
D)  controller

Question 12

Differentiate among the roles of vice president for financial management,treasurer,and controller.

Accepted Answer

The vice president for financial managem

Question 13

Which of the following is the best definition of financial risk?

Accepted Answer

A)  Risk is the possibility that an investment will lose money. 
B)  Risk is the possibility that an investment will earn a negative return. 
C)  Risk is the possibility that an investment's actual return will be less than its expected return. 
D)  Risk is the uncertainty regarding the gain or loss from an investment. 
A)  Risk is the possibility that an investment will lose money. 
B)  Risk is the possibility that an investment will earn a negative return. 
C)  Risk is the possibility that an investment's actual return will be less than its expected return. 
D)  Risk is the uncertainty regarding the gain or loss from an investment.

Question 14

What is an important determinant of a firm's dividend policy?

Accepted Answer

The main determinant of a firm's dividen

Question 15

_____ consists of funds provided by the firm's owners when they reinvest earnings,make additional contributions,liquidate assets,issue stock,or raise capital.

Accepted Answer

A) venture capitalists 
B) private placements 
C) factoring 
D) capital investment analysis 
E) debt capital
F)equity capital
G)financial plan
H)leverage buyout
I)private equity funds
J)divesture
K)marketable securities
L)financial manager
M)tender offer
N)trade credit
O)leverage
P)capital structure
Q)asset intensity
R)bonds 
A) venture capitalists 
B) private placements 
C) factoring 
D) capital investment analysis 
E) debt capital
F)equity capital
G)financial plan
H)leverage buyout
I)private equity funds
J)divesture
K)marketable securities
L)financial manager
M)tender offer
N)trade credit
O)leverage
P)capital structure
Q)asset intensity
R)bonds

Question 16

Which of the following individuals has the direct responsibility for shareholder relations?

Accepted Answer

A)  Controller 
B)  Chief financial officer 
C)  Chief executive officer 
D)  Treasurer 
A)  Controller 
B)  Chief financial officer 
C)  Chief executive officer 
D)  Treasurer

Question 17

_____ are investment companies that raise funds from wealthy individuals and institutional investors and use the funds to make investments in both public and private companies.

Accepted Answer

A)  Venture capitalists 
B)  Private placements 
C)  Hedge funds 
D)  Private equity funds 
A)  Venture capitalists 
B)  Private placements 
C)  Hedge funds 
D)  Private equity funds

Question 18

Similar to venture capitalist funds,these companies raise money to invest in all types of promising companies,including mature firms.

Accepted Answer

A) venture capitalists 
B) private placements 
C) factoring 
D) capital investment analysis 
E) debt capital
F)equity capital
G)financial plan
H)leverage buyout
I)private equity funds
J)divesture
K)marketable securities
L)financial manager
M)tender offer
N)trade credit
O)leverage
P)capital structure
Q)asset intensity
R)bonds 
A) venture capitalists 
B) private placements 
C) factoring 
D) capital investment analysis 
E) debt capital
F)equity capital
G)financial plan
H)leverage buyout
I)private equity funds
J)divesture
K)marketable securities
L)financial manager
M)tender offer
N)trade credit
O)leverage
P)capital structure
Q)asset intensity
R)bonds

Question 19

Short-term assets are expected to be converted into cash within _____.

Accepted Answer

A)  a week 
B)  six months 
C)  a month 
D)  a year 
A)  a week 
B)  six months 
C)  a month 
D)  a year

Question 20

Interest rates on short-term move up and down frequently.

Accepted Answer

A) True 
 B)False

Investments that promise the highest returns tend to involve the most risk.

Increasing leverage decreases management's flexibility in future financing decisions.

Explain the concept of risk-return trade-off.

Mitch raises money from wealthy individuals and institutional investors for a variety of promising new companies.In exchange,he will become part owner of those businesses.Mitch is a(n)________.

Unlike private equity funds,which tend to focus on small,start-up companies,venture capital funds invest in all types of businesses,including mature ones.

A(n)________ is a document that specifies the funds a firm will need for a period of time,the time of inflows and outflows,and the most appropriate uses of funds.

_____ are low-risk securities that either have short maturities or can easily be sold in secondary markets.

Certificates of indebtedness sold to raise long-term funds for a corporation or government agency are known as _____.

Short-term sources of funds are loans that are repaid within one year.

Why do firms divest assets?

The senior financial manager has the title of ________.

Differentiate among the roles of vice president for financial management,treasurer,and controller.

Which of the following is the best definition of financial risk?

What is an important determinant of a firm's dividend policy?

_____ consists of funds provided by the firm's owners when they reinvest earnings,make additional contributions,liquidate assets,issue stock,or raise capital.

Which of the following individuals has the direct responsibility for shareholder relations?

_____ are investment companies that raise funds from wealthy individuals and institutional investors and use the funds to make investments in both public and private companies.

Similar to venture capitalist funds,these companies raise money to invest in all types of promising companies,including mature firms.

Short-term assets are expected to be converted into cash within _____.

Interest rates on short-term move up and down frequently.

The Changing Face of Business

Business Ethics and Social Responsibility

Economic Challenges Facing Contemporary Business

Competing in World Markets

Forms of Business Ownership and Organization

Starting Your Own Business: The Entrepreneurship Alternative

Management, Leadership, and the Internal Organization

Human Resource Management: From Recruitment to Labour Relations

Top Performance through Empowerment, Teamwork, and Communication

Production and Operations Management

Customer-Driven Marketing

Product and Distribution Strategies

Promotion and Pricing Strategies

Using Technology to Manage Information

Understanding Accounting and Financial Statements

The Financial System

Filters

Exam 17: Financial Management

Investments that promise the highest returns tend to involve the most risk.

Increasing leverage decreases management's flexibility in future financing decisions.

Explain the concept of risk-return trade-off.

Mitch raises money from wealthy individuals and institutional investors for a variety of promising new companies.In exchange,he will become part owner of those businesses.Mitch is a(n)________.

Unlike private equity funds,which tend to focus on small,start-up companies,venture capital funds invest in all types of businesses,including mature ones.

A(n)________ is a document that specifies the funds a firm will need for a period of time,the time of inflows and outflows,and the most appropriate uses of funds.

_____ are low-risk securities that either have short maturities or can easily be sold in secondary markets.

Certificates of indebtedness sold to raise long-term funds for a corporation or government agency are known as _____.

Short-term sources of funds are loans that are repaid within one year.

Why do firms divest assets?

The senior financial manager has the title of ________.

Differentiate among the roles of vice president for financial management,treasurer,and controller.

Which of the following is the best definition of financial risk?

What is an important determinant of a firm's dividend policy?

_____ consists of funds provided by the firm's owners when they reinvest earnings,make additional contributions,liquidate assets,issue stock,or raise capital.

Which of the following individuals has the direct responsibility for shareholder relations?

_____ are investment companies that raise funds from wealthy individuals and institutional investors and use the funds to make investments in both public and private companies.

Similar to venture capitalist funds,these companies raise money to invest in all types of promising companies,including mature firms.

Short-term assets are expected to be converted into cash within _____.

Interest rates on short-term move up and down frequently.

The Changing Face of Business

Business Ethics and Social Responsibility

Economic Challenges Facing Contemporary Business

Competing in World Markets

Forms of Business Ownership and Organization

Starting Your Own Business: The Entrepreneurship Alternative

Management, Leadership, and the Internal Organization

Human Resource Management: From Recruitment to Labour Relations

Top Performance through Empowerment, Teamwork, and Communication

Production and Operations Management

Customer-Driven Marketing

Product and Distribution Strategies

Promotion and Pricing Strategies

Using Technology to Manage Information

Understanding Accounting and Financial Statements

The Financial System

Filters