Question 1

Mutual funds that invest in new companies or even troubled companies and other high-risk securities are emphasizing

Accepted Answer

A)  aggressive growth. 
B)  stability. 
C)  high current income. 
D)  growth. 
E)  safety. 
A)  aggressive growth. 
B)  stability. 
C)  high current income. 
D)  growth. 
E)  safety.

Question 2

What is a bond?

Accepted Answer

A bond is an IOU, that is, a w

Question 3

Which of the following is correct with respect to retained earnings?

Accepted Answer

A)  Retained earnings represent debt financing. 
B)  Retained earnings equal the profits that have been paid out as dividends. 
C)  Using retained earnings means that the firm will have to borrow money and pay interest on loans or bonds. 
D)  The smaller dividends that may be paid to shareholders as a result of retaining earnings may decrease the demand for, and thus the price of, the company's stock. 
E)  None of these are correct. 
A)  Retained earnings represent debt financing. 
B)  Retained earnings equal the profits that have been paid out as dividends. 
C)  Using retained earnings means that the firm will have to borrow money and pay interest on loans or bonds. 
D)  The smaller dividends that may be paid to shareholders as a result of retaining earnings may decrease the demand for, and thus the price of, the company's stock. 
E)  None of these are correct.

Question 4

In a highly seasonal business, cash flow planning is less critical than in a year-round business.

Accepted Answer

A) True 
 B)False

Question 5

What is a mutual fund?

Accepted Answer

A mutual fund is a company tha

Question 6

What is risk? What is the difference between speculative risk and pure risk? What is risk management?

Accepted Answer

- Risk: uncertainty about future events

Question 7

Scott just called his broker to place an order to buy 200 shares of IBM at the best price the broker could get. Which of the terms below describe his order?

Accepted Answer

A)  Stop order, round lot 
B)  Round lot, limit order 
C)  Limit order, odd lot 
D)  Odd lot, stop order 
E)  Market order, round lot 
A)  Stop order, round lot 
B)  Round lot, limit order 
C)  Limit order, odd lot 
D)  Odd lot, stop order 
E)  Market order, round lot

Question 8

In what way is accounts receivable a short-term (operating) expenditure?

Accepted Answer

Accounts receivable refers to funds due

Question 9

Work-in-process inventory consists of goods partway through the production process that are damaged and have to be written off.

Accepted Answer

A) True 
 B)False

Question 10

Samantha is planning to start a new business. The bank has requested she complete ________ so that her cash flow projections can be more understandable.

Accepted Answer

A)  a statement of cash flows 
B)  a business plan 
C)  a consumer analysis 
D)  a sales forecast 
E)  a risk-return analysis 
A)  a statement of cash flows 
B)  a business plan 
C)  a consumer analysis 
D)  a sales forecast 
E)  a risk-return analysis

Question 11

Explain the strategies that are used by business firms to cope with risk. Give an example of each strategy.

Accepted Answer

There are four basic strategies. Risk av

Question 12

Manitoba Hydro has steady, predictable profits and cash flow patterns. Its best choice for long-term funding is most likely

Accepted Answer

A)  factoring accounts receivable. 
B)  common stock. 
C)  either common or preferred stock but not bonds. 
D)  preferred stock. 
E)  bonds. 
A)  factoring accounts receivable. 
B)  common stock. 
C)  either common or preferred stock but not bonds. 
D)  preferred stock. 
E)  bonds.

Question 13

Samantha should prepare a cash flow requirements projection because

Accepted Answer

A)  she can see how much anticipated taxes she will have to pay. 
B)  by anticipating shortfalls, she can seek funds in advance and minimize their cost, and by anticipating excess cash she can plan to put funds to work in short-term, interest-bearing investments. 
C)  she will be able to plan her vacation. 
D)  she will know when to hire extra staff for peak periods. 
E)  she will need this information when she is planning for an initial public offering of her company's stock. 
A)  she can see how much anticipated taxes she will have to pay. 
B)  by anticipating shortfalls, she can seek funds in advance and minimize their cost, and by anticipating excess cash she can plan to put funds to work in short-term, interest-bearing investments. 
C)  she will be able to plan her vacation. 
D)  she will know when to hire extra staff for peak periods. 
E)  she will need this information when she is planning for an initial public offering of her company's stock.

Question 14

What should an investor consider when selecting an investment broker?

Accepted Answer

Determine what assistance one needs in b

Question 15

All of the following are features of debt financing except

Accepted Answer

A)  it must be repaid by a deadline. 
B)  it makes regular and fixed claims on income. 
C)  it may lead to challenge for control of company. 
D)  its interest is tax deductible. 
E)  it constrains management flexibility. 
A)  it must be repaid by a deadline. 
B)  it makes regular and fixed claims on income. 
C)  it may lead to challenge for control of company. 
D)  its interest is tax deductible. 
E)  it constrains management flexibility.

Question 16

John has bought into a mutual fund that includes long-term municipal bonds, corporate bonds, and common stocks with good dividend-paying records. This mutual fund is emphasizing

Accepted Answer

A)  stability. 
B)  safety. 
C)  high current income. 
D)  aggressive growth. 
E)  growth. 
A)  stability. 
B)  safety. 
C)  high current income. 
D)  aggressive growth. 
E)  growth.

Question 17

High-grade corporate bonds rate low in terms of risk and high in terms of expected returns.

Accepted Answer

A) True 
 B)False

Question 18

Mega Computer issued stock with a face value of one cent and then sold the shares to the public for $20.00 each. Ted bought 10 shares at that price. Today, Ted sold his shares to David for $25.00 each. What are Ted's capital gains?

Accepted Answer

A)  $19.99 
B)  $20.00 
C)  $25.00 
D)  $50.00 
E)  $0.01 
A)  $19.99 
B)  $20.00 
C)  $25.00 
D)  $50.00 
E)  $0.01

Question 19

A credit policy of "2/10, net 30" means that the selling company offers a 2 percent discount if the customer pays within 10 days.

Accepted Answer

A) True 
 B)False

Question 20

Previously owned stocks and bonds are bought and sold in the

Accepted Answer

A)  primary securities market. 
B)  securities and exchange commission. 
C)  private placement market. 
D)  investment bank. 
E)  secondary securities market. 
A)  primary securities market. 
B)  securities and exchange commission. 
C)  private placement market. 
D)  investment bank. 
E)  secondary securities market.

Mutual funds that invest in new companies or even troubled companies and other high-risk securities are emphasizing

What is a bond?

Which of the following is correct with respect to retained earnings?

In a highly seasonal business, cash flow planning is less critical than in a year-round business.

What is a mutual fund?

What is risk? What is the difference between speculative risk and pure risk? What is risk management?

Scott just called his broker to place an order to buy 200 shares of IBM at the best price the broker could get. Which of the terms below describe his order?

In what way is accounts receivable a short-term (operating) expenditure?

Work-in-process inventory consists of goods partway through the production process that are damaged and have to be written off.

Samantha is planning to start a new business. The bank has requested she complete ________ so that her cash flow projections can be more understandable.

Explain the strategies that are used by business firms to cope with risk. Give an example of each strategy.

Manitoba Hydro has steady, predictable profits and cash flow patterns. Its best choice for long-term funding is most likely

Samantha should prepare a cash flow requirements projection because

What should an investor consider when selecting an investment broker?

All of the following are features of debt financing except

John has bought into a mutual fund that includes long-term municipal bonds, corporate bonds, and common stocks with good dividend-paying records. This mutual fund is emphasizing

High-grade corporate bonds rate low in terms of risk and high in terms of expected returns.

Mega Computer issued stock with a face value of one cent and then sold the shares to the public for $20.00 each. Ted bought 10 shares at that price. Today, Ted sold his shares to David for $25.00 each. What are Ted's capital gains?

A credit policy of "2/10, net 30" means that the selling company offers a 2 percent discount if the customer pays within 10 days.

Previously owned stocks and bonds are bought and sold in the

Understanding the Canadian Business System

The Environment of Business

Conducting Business Ethically and Responsibly

Entrepreneurship, Small Business, and New Venture Creation

The Global Context of Business

Managing the Business Enterprise

Organizing the Business Enterprise

Managing Human Resources and Labour Relations

Motivating, Satisfying, and Leading Employees

Operations Management, Productivity, and Quality

Understanding Accounting

Understanding Marketing Principles and Developing Products

Pricing, Promotion, and Distributing Products

Money and Banking

Filters

Exam 15: Finacial Decisions and Risk Management

Mutual funds that invest in new companies or even troubled companies and other high-risk securities are emphasizing

What is a bond?

Which of the following is correct with respect to retained earnings?

In a highly seasonal business, cash flow planning is less critical than in a year-round business.

What is a mutual fund?

What is risk? What is the difference between speculative risk and pure risk? What is risk management?

Scott just called his broker to place an order to buy 200 shares of IBM at the best price the broker could get. Which of the terms below describe his order?

In what way is accounts receivable a short-term (operating) expenditure?

Work-in-process inventory consists of goods partway through the production process that are damaged and have to be written off.

Samantha is planning to start a new business. The bank has requested she complete ________ so that her cash flow projections can be more understandable.

Explain the strategies that are used by business firms to cope with risk. Give an example of each strategy.

Manitoba Hydro has steady, predictable profits and cash flow patterns. Its best choice for long-term funding is most likely

Samantha should prepare a cash flow requirements projection because

What should an investor consider when selecting an investment broker?

All of the following are features of debt financing except

John has bought into a mutual fund that includes long-term municipal bonds, corporate bonds, and common stocks with good dividend-paying records. This mutual fund is emphasizing

High-grade corporate bonds rate low in terms of risk and high in terms of expected returns.

Mega Computer issued stock with a face value of one cent and then sold the shares to the public for $20.00 each. Ted bought 10 shares at that price. Today, Ted sold his shares to David for $25.00 each. What are Ted's capital gains?

A credit policy of "2/10, net 30" means that the selling company offers a 2 percent discount if the customer pays within 10 days.

Previously owned stocks and bonds are bought and sold in the

Understanding the Canadian Business System

The Environment of Business

Conducting Business Ethically and Responsibly

Entrepreneurship, Small Business, and New Venture Creation

The Global Context of Business

Managing the Business Enterprise

Organizing the Business Enterprise

Managing Human Resources and Labour Relations

Motivating, Satisfying, and Leading Employees

Operations Management, Productivity, and Quality

Understanding Accounting

Understanding Marketing Principles and Developing Products

Pricing, Promotion, and Distributing Products

Money and Banking

Filters