Question 1

Before its IPO,Facebook was an example of a private firm.As a private firm,Facebook was

Accepted Answer

A)  not subject to government regulations and taxation. 
B)  run by stockholders and a board of directors. 
C)  run by its founder, Mark Zuckerberg. 
D)  not legally allowed to raise funds through venture capital firms. 
A)  not subject to government regulations and taxation. 
B)  run by stockholders and a board of directors. 
C)  run by its founder, Mark Zuckerberg. 
D)  not legally allowed to raise funds through venture capital firms. C

Question 2

If the personal assets of the owners cannot be claimed if the business is bankrupt,the owners are said to have

Accepted Answer

A)  unlimited liability. 
B)  a proprietorship type of business. 
C)  limited liability. 
D)  a partnership type of business. 
A)  unlimited liability. 
B)  a proprietorship type of business. 
C)  limited liability. 
D)  a partnership type of business. C

Question 3

Mutual funds give individual investors a low-cost way to diversify.

Accepted Answer

A) True 
 B)False  True

Question 4

From the highest to the lowest,the percentage of firms by business type in the United States is represented by which of the following?

Accepted Answer

A)  sole proprietorships, corporations, partnerships 
B)  sole proprietorships, partnerships, corporations 
C)  corporations, partnerships, sole proprietorships 
D)  corporations, sole proprietorships, partnerships 
A)  sole proprietorships, corporations, partnerships 
B)  sole proprietorships, partnerships, corporations 
C)  corporations, partnerships, sole proprietorships 
D)  corporations, sole proprietorships, partnerships

Question 5

In a corporation,what are "inside directors" and "outside directors"?

Accepted Answer

Inside directors are members of manageme

Question 6

Damian wants to start a business where he is the only owner and the company does not issue stock.The type of business Damian wants to start is a

Accepted Answer

A)  sole proprietorship. 
B)  partnership. 
C)  corporation. 
D)  Any of the above could be correct. 
A)  sole proprietorship. 
B)  partnership. 
C)  corporation. 
D)  Any of the above could be correct.

Question 7

Snap became the first firm in the history of U.S.financial markets to have an IPO that consisted entirely of non-voting shares.

Accepted Answer

A) True 
 B)False

Question 8

The person hired by a corporation's board of directors to run the day-to-day operations of the corporation is known as the

Accepted Answer

A)  chairman of the board. 
B)  chief executive officer. 
C)  owner-manager. 
D)  corporate governor. 
A)  chairman of the board. 
B)  chief executive officer. 
C)  owner-manager. 
D)  corporate governor.

Question 9

Which of the following can only be sold back to the firm that issued them?

Accepted Answer

A)  stocks 
B)  bonds 
C)  mutual funds 
D)  exchange-traded funds 
A)  stocks 
B)  bonds 
C)  mutual funds 
D)  exchange-traded funds

Question 10

When an investor buys a corporate bond,the ________ the bond is a loan to the corporation.

Accepted Answer

A)  interest on 
B)  face value of 
C)  coupon payment on 
D)  dividend payment on 
A)  interest on 
B)  face value of 
C)  coupon payment on 
D)  dividend payment on

Question 11

What is a secondary market?

Accepted Answer

A)  a market where factory seconds and damaged merchandise are sold 
B)  a market where newly issued bonds are sold to initial buyers by the borrowing firm 
C)  a market where a newly issued stocks are sold to initial buyers by the borrowing firm 
D)  a market where you can sell any stocks you own as a private investor 
A)  a market where factory seconds and damaged merchandise are sold 
B)  a market where newly issued bonds are sold to initial buyers by the borrowing firm 
C)  a market where a newly issued stocks are sold to initial buyers by the borrowing firm 
D)  a market where you can sell any stocks you own as a private investor

Question 12

A firm's net income is also its

Accepted Answer

A)  economic profit. 
B)  balance sheet. 
C)  accounting profit. 
D)  opportunity cost. 
A)  economic profit. 
B)  balance sheet. 
C)  accounting profit. 
D)  opportunity cost.

Question 13

What is corporate governance?

Accepted Answer

Corporate governance refers to

Question 14

In August 2011,Standard & Poor's (S&P)changed its rating on U.S.Treasury bonds from "AAA" to "AA+" based on the state of the federal government's budget deficit.This was the ________ a rating agency had given Treasury bonds less than a rating of "AAA."

Accepted Answer

A)  first time ever 
B)  second time since the year 2000 
C)  first time since the Great Depression 
D)  fifth time in history 
A)  first time ever 
B)  second time since the year 2000 
C)  first time since the Great Depression 
D)  fifth time in history

Question 15

What is an outside director?

Accepted Answer

A)  a member of the board of directors who does not have a direct management role in the firm 
B)  a member of a corporate board of directors that is also a manager of the business 
C)  the CEO that is selected by the corporation's board of directors 
D)  a board of director chair who has been in the job for less than one year 
A)  a member of the board of directors who does not have a direct management role in the firm 
B)  a member of a corporate board of directors that is also a manager of the business 
C)  the CEO that is selected by the corporation's board of directors 
D)  a board of director chair who has been in the job for less than one year

Question 16

Tanesha sells homemade candles over the Internet.Her annual revenue is $64,000 per year,the explicit costs of her business are $17,000,and the opportunity costs of her business are $22,000.What are the implicit costs of her business?

Accepted Answer

A)  $17,000 
B)  $22,000 
C)  $39,000 
D)  $47,000 
A)  $17,000 
B)  $22,000 
C)  $39,000 
D)  $47,000

Question 17

What is the difference between retained earnings and dividends?

Accepted Answer

Retained earnings are profits

Question 18

A nonmonetary opportunity cost is

Accepted Answer

A)  an implicit cost. 
B)  an explicit cost. 
C)  a direct cost. 
D)  an accounting cost. 
A)  an implicit cost. 
B)  an explicit cost. 
C)  a direct cost. 
D)  an accounting cost.

Question 19

Corporate managers and shareholders do not always have the same goals.

Accepted Answer

A) True 
 B)False

Question 20

Corporate governance involves the way in which

Accepted Answer

A)  the government nationalizes corporations. 
B)  the government licenses corporations. 
C)  a corporation is subject to government regulations. 
D)  a corporation is structured. 
A)  the government nationalizes corporations. 
B)  the government licenses corporations. 
C)  a corporation is subject to government regulations. 
D)  a corporation is structured.

Before its IPO,Facebook was an example of a private firm.As a private firm,Facebook was

If the personal assets of the owners cannot be claimed if the business is bankrupt,the owners are said to have

Mutual funds give individual investors a low-cost way to diversify.

From the highest to the lowest,the percentage of firms by business type in the United States is represented by which of the following?

In a corporation,what are "inside directors" and "outside directors"?

Damian wants to start a business where he is the only owner and the company does not issue stock.The type of business Damian wants to start is a

Snap became the first firm in the history of U.S.financial markets to have an IPO that consisted entirely of non-voting shares.

The person hired by a corporation's board of directors to run the day-to-day operations of the corporation is known as the

Which of the following can only be sold back to the firm that issued them?

When an investor buys a corporate bond,the ________ the bond is a loan to the corporation.

What is a secondary market?

A firm's net income is also its

What is corporate governance?

In August 2011,Standard & Poor's (S&P)changed its rating on U.S.Treasury bonds from "AAA" to "AA+" based on the state of the federal government's budget deficit.This was the ________ a rating agency had given Treasury bonds less than a rating of "AAA."

What is an outside director?

Tanesha sells homemade candles over the Internet.Her annual revenue is $64,000 per year,the explicit costs of her business are $17,000,and the opportunity costs of her business are $22,000.What are the implicit costs of her business?

What is the difference between retained earnings and dividends?

A nonmonetary opportunity cost is

Corporate managers and shareholders do not always have the same goals.

Corporate governance involves the way in which

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Consumer Choice and Elasticity

Technology,Production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, The Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, International Trade, and Exchange Rates

Filters

Exam 6: Firms, The Stock Market, and Corporate Governance

Before its IPO,Facebook was an example of a private firm.As a private firm,Facebook was

If the personal assets of the owners cannot be claimed if the business is bankrupt,the owners are said to have

Mutual funds give individual investors a low-cost way to diversify.

From the highest to the lowest,the percentage of firms by business type in the United States is represented by which of the following?

In a corporation,what are "inside directors" and "outside directors"?

Damian wants to start a business where he is the only owner and the company does not issue stock.The type of business Damian wants to start is a

Snap became the first firm in the history of U.S.financial markets to have an IPO that consisted entirely of non-voting shares.

The person hired by a corporation's board of directors to run the day-to-day operations of the corporation is known as the

Which of the following can only be sold back to the firm that issued them?

When an investor buys a corporate bond,the ________ the bond is a loan to the corporation.

What is a secondary market?

A firm's net income is also its

What is corporate governance?

In August 2011,Standard & Poor's (S&P)changed its rating on U.S.Treasury bonds from "AAA" to "AA+" based on the state of the federal government's budget deficit.This was the ________ a rating agency had given Treasury bonds less than a rating of "AAA."

What is an outside director?

Tanesha sells homemade candles over the Internet.Her annual revenue is $64,000 per year,the explicit costs of her business are $17,000,and the opportunity costs of her business are $22,000.What are the implicit costs of her business?

What is the difference between retained earnings and dividends?

A nonmonetary opportunity cost is

Corporate managers and shareholders do not always have the same goals.

Corporate governance involves the way in which

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Consumer Choice and Elasticity

Technology,Production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, The Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, International Trade, and Exchange Rates

Filters