Question 1

Which of the following is NOT a concept that you need to understand to make rational financial decisions?

Accepted Answer

A)  More value is preferred to less value. 
B)  Less risky assets are preferred to riskier assets. 
C)  Current cash is more valuable than cash in the future. 
D)  Discount rate is a decreasing function of risk. 
E)  All of the above are needed. 
A)  More value is preferred to less value. 
B)  Less risky assets are preferred to riskier assets. 
C)  Current cash is more valuable than cash in the future. 
D)  Discount rate is a decreasing function of risk. 
E)  All of the above are needed.

Question 2

Which of the following statements are true?

Accepted Answer

A)  The value of any investment is based on the cash flows it is expected to generate in the future. 
B)  Investors are not generally risk averse. 
C)  Uncertain cash flows are preferred to certain cash flows. 
D)  All of the above are true. 
E)  None of the above are true. 
A)  The value of any investment is based on the cash flows it is expected to generate in the future. 
B)  Investors are not generally risk averse. 
C)  Uncertain cash flows are preferred to certain cash flows. 
D)  All of the above are true. 
E)  None of the above are true.

Question 3

The study of finance consists of three areas⎯financial markets,investments,and managerial finance⎯that are basically independent of each other,because you can be an expert in one area without having knowledge of the other two.

Accepted Answer

A) True 
 B)False

Question 4

The finance function is fairly independent of most other corporate functions.Marketing decisions,for example,might affect the firm's need for funds but are not affected by conditions in financial markets or other financing issues.

Accepted Answer

A) True 
 B)False

Question 5

At the beginning of the twentieth century,for the most part,the only investments available to individual investors were corporate stocks and bonds;but,today,there are a significantly greater number of investment choices because investors' demands have changed.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements is not correct?

Accepted Answer

A)  Prior to the late 1950s and early 1960s,finance was taught primarily as a descriptive,institutional subject viewed more from the standpoint of an outsider than from that of the management of the firm. 
B)  History has shown that the types of investments and methods used to analyze investment opportunities have changed as the attitudes of both investors and regulators have changed. 
C)  When managerial finance emerged as a separate field of study in the early 1900s,the emphasis was on evaluation and analysis of investments because the economy was in excellent condition at the time,so most individuals had large sums of funds to invest in corporate securities. 
D)  One of the responsibilities of the financial manager is to help determine which assets the firm should acquire and the best way to finance those assets. 
E)  Sustainability is a long-run concept that focuses on improving the quality of life of all stakeholders,both current and future. 
A)  Prior to the late 1950s and early 1960s,finance was taught primarily as a descriptive,institutional subject viewed more from the standpoint of an outsider than from that of the management of the firm. 
B)  History has shown that the types of investments and methods used to analyze investment opportunities have changed as the attitudes of both investors and regulators have changed. 
C)  When managerial finance emerged as a separate field of study in the early 1900s,the emphasis was on evaluation and analysis of investments because the economy was in excellent condition at the time,so most individuals had large sums of funds to invest in corporate securities. 
D)  One of the responsibilities of the financial manager is to help determine which assets the firm should acquire and the best way to finance those assets. 
E)  Sustainability is a long-run concept that focuses on improving the quality of life of all stakeholders,both current and future.

Question 7

Which of the following factors is not a mandate toward globalization for many U.S.businesses?

Accepted Answer

A)  Improvements in transportation and shipping have lowered shipping costs worldwide. 
B)  Political clout of consumers has tended to erode barriers designed to protect inefficient manufacturing in other countries. 
C)  With development costs rising,firms must increase unit sales outside the United States to remain competitive. 
D)  Firms must be able to produce where costs are lowest. 
E)  All of the above are factors. 
A)  Improvements in transportation and shipping have lowered shipping costs worldwide. 
B)  Political clout of consumers has tended to erode barriers designed to protect inefficient manufacturing in other countries. 
C)  With development costs rising,firms must increase unit sales outside the United States to remain competitive. 
D)  Firms must be able to produce where costs are lowest. 
E)  All of the above are factors.

Question 8

Which of the following is NOT an example of a firm becoming more of a "lean thinker" in its operations?

Accepted Answer

A)  simplifying financial reporting to avoid providing redundant or useless information 
B)  developing products in the most efficient manner 
C)  reducing scrap material being generated in the production process 
D)  all of the above are examples of "lean thinking" 
E)  none of the above are examples of "lean thinking" 
A)  simplifying financial reporting to avoid providing redundant or useless information 
B)  developing products in the most efficient manner 
C)  reducing scrap material being generated in the production process 
D)  all of the above are examples of "lean thinking" 
E)  none of the above are examples of "lean thinking"

Question 9

The well-developed financial markets that exist in the United States have allowed us to achieve a higher standard of living than would otherwise be possible.

Accepted Answer

A) True 
 B)False

Question 10

Coordination of the finance function and the marketing function is critical to the success of newly formed companies which must generate enough cash to survive

Accepted Answer

A) True 
 B)False

Question 11

Much of the recent legislation enacted by the government has focused on the regulating of previously unregulated industries such as financial services and utilities.

Accepted Answer

A) True 
 B)False

Question 12

The history of banking in the United States is one of continuous regulation to ensure the safety of our banking institution.For this reason,little deregulation has taken place.

Accepted Answer

A) True 
 B)False

Question 13

A major reason there has been a great deal of deregulation in the banking industry since the 1970s is due to the emergence of nonbank organizations and the need to increase competitiveness of U.S.banks and other financial institutions.

Accepted Answer

A) True 
 B)False

Question 14

Why is it important for persons in marketing,accounting,production,and other areas in the firm to understand finance?

Accepted Answer

A)  Funds availability affects the firm's ability to increase inventory,change plant capacity,and so forth. 
B)  Financial decisions are based on data provided by other functional areas of the firm;thus,it is in the best interests of such areas to provide the most optimistic information possible so that their projects seem most favorable. 
C)  There is a good chance persons in marketing,accounting,production,and other areas will have to work in the finance area someday if they want to move up the corporate ladder. 
D)  Payments of salaries and other expenses always pass through the finance area of the firm. 
E)  All of the above are correct answers. 
A)  Funds availability affects the firm's ability to increase inventory,change plant capacity,and so forth. 
B)  Financial decisions are based on data provided by other functional areas of the firm;thus,it is in the best interests of such areas to provide the most optimistic information possible so that their projects seem most favorable. 
C)  There is a good chance persons in marketing,accounting,production,and other areas will have to work in the finance area someday if they want to move up the corporate ladder. 
D)  Payments of salaries and other expenses always pass through the finance area of the firm. 
E)  All of the above are correct answers.

Question 15

The major areas included in the study of finance are financial markets,investments,financial services,and managerial finance.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is consistent with maximizing the value of a firm?

Accepted Answer

A)  increasing the amount and complexity of financial data reported by the firm 
B)  increasing the riskiness of firm 
C)  spending large amounts of money perquisites for the managers 
D)  following sound sustainable business practices 
E)  None of the above 
A)  increasing the amount and complexity of financial data reported by the firm 
B)  increasing the riskiness of firm 
C)  spending large amounts of money perquisites for the managers 
D)  following sound sustainable business practices 
E)  None of the above

Question 17

During the 1930s,investment experts suggested that stock value should be determined by computing the present value of the future cash flows associated with the stock.

Accepted Answer

A) True 
 B)False

Question 18

Historically,in the United States,after the country has experienced economic or financial tragedy,cries for new,tougher regulations become abundant,and politicians are generally quick to enact new legislation to take what they think are corrective actions.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is NOT one of the most important trends in managerial finance from the 1990s that continued into the twenty-first century?

Accepted Answer

A)  Regulatory attitude of government 
B)  Ongoing adaptation of electronic technology 
C)  Focus on corporate liquidity 
D)  Continued globalization of business 
E)  All of the above 
A)  Regulatory attitude of government 
B)  Ongoing adaptation of electronic technology 
C)  Focus on corporate liquidity 
D)  Continued globalization of business 
E)  All of the above

Question 20

Throughout the twentieth century,the banking industry has often been the subject of a great deal of regulation,much of which has placed banks at a competitive disadvantage compared with other financial institutions in the United States and other banks throughout the world.

Accepted Answer

A) True 
 B)False

Which of the following is NOT a concept that you need to understand to make rational financial decisions?

Which of the following statements are true?

The study of finance consists of three areas⎯financial markets,investments,and managerial finance⎯that are basically independent of each other,because you can be an expert in one area without having knowledge of the other two.

The finance function is fairly independent of most other corporate functions.Marketing decisions,for example,might affect the firm's need for funds but are not affected by conditions in financial markets or other financing issues.

At the beginning of the twentieth century,for the most part,the only investments available to individual investors were corporate stocks and bonds;but,today,there are a significantly greater number of investment choices because investors' demands have changed.

Which of the following statements is not correct?

Which of the following factors is not a mandate toward globalization for many U.S.businesses?

Which of the following is NOT an example of a firm becoming more of a "lean thinker" in its operations?

The well-developed financial markets that exist in the United States have allowed us to achieve a higher standard of living than would otherwise be possible.

Coordination of the finance function and the marketing function is critical to the success of newly formed companies which must generate enough cash to survive

Much of the recent legislation enacted by the government has focused on the regulating of previously unregulated industries such as financial services and utilities.

The history of banking in the United States is one of continuous regulation to ensure the safety of our banking institution.For this reason,little deregulation has taken place.

A major reason there has been a great deal of deregulation in the banking industry since the 1970s is due to the emergence of nonbank organizations and the need to increase competitiveness of U.S.banks and other financial institutions.

Why is it important for persons in marketing,accounting,production,and other areas in the firm to understand finance?

The major areas included in the study of finance are financial markets,investments,financial services,and managerial finance.

Which of the following is consistent with maximizing the value of a firm?

During the 1930s,investment experts suggested that stock value should be determined by computing the present value of the future cash flows associated with the stock.

Historically,in the United States,after the country has experienced economic or financial tragedy,cries for new,tougher regulations become abundant,and politicians are generally quick to enact new legislation to take what they think are corrective actions.

Which of the following is NOT one of the most important trends in managerial finance from the 1990s that continued into the twenty-first century?

Throughout the twentieth century,the banking industry has often been the subject of a great deal of regulation,much of which has placed banks at a competitive disadvantage compared with other financial institutions in the United States and other banks throughout the world.

Financial Assets Instruments

Financial Markets and the Investment Banking Process

Financial Intermediaries and the Banking System

The Cost of Money Interest Rates

Business Organizations and the Tax Environment

Analysis of Financial Statements

Financial Planning and Control

Time Value of Money

Valuation Concepts

Risk and Rates of Return

The Cost of Capital

Capital Budgeting

Capital Structure and Dividend Policy Decisions

Working Capital Management

Investment and Securities

Investment Analysis and Valuation Techniques

Filters

Exam 1: An Overview of Finance

Which of the following is NOT a concept that you need to understand to make rational financial decisions?

Which of the following statements are true?

The study of finance consists of three areas⎯financial markets,investments,and managerial finance⎯that are basically independent of each other,because you can be an expert in one area without having knowledge of the other two.

The finance function is fairly independent of most other corporate functions.Marketing decisions,for example,might affect the firm's need for funds but are not affected by conditions in financial markets or other financing issues.

At the beginning of the twentieth century,for the most part,the only investments available to individual investors were corporate stocks and bonds;but,today,there are a significantly greater number of investment choices because investors' demands have changed.

Which of the following statements is not correct?

Which of the following factors is not a mandate toward globalization for many U.S.businesses?

Which of the following is NOT an example of a firm becoming more of a "lean thinker" in its operations?

The well-developed financial markets that exist in the United States have allowed us to achieve a higher standard of living than would otherwise be possible.

Coordination of the finance function and the marketing function is critical to the success of newly formed companies which must generate enough cash to survive

Much of the recent legislation enacted by the government has focused on the regulating of previously unregulated industries such as financial services and utilities.

The history of banking in the United States is one of continuous regulation to ensure the safety of our banking institution.For this reason,little deregulation has taken place.

A major reason there has been a great deal of deregulation in the banking industry since the 1970s is due to the emergence of nonbank organizations and the need to increase competitiveness of U.S.banks and other financial institutions.

Why is it important for persons in marketing,accounting,production,and other areas in the firm to understand finance?

The major areas included in the study of finance are financial markets,investments,financial services,and managerial finance.

Which of the following is consistent with maximizing the value of a firm?

During the 1930s,investment experts suggested that stock value should be determined by computing the present value of the future cash flows associated with the stock.

Historically,in the United States,after the country has experienced economic or financial tragedy,cries for new,tougher regulations become abundant,and politicians are generally quick to enact new legislation to take what they think are corrective actions.

Which of the following is NOT one of the most important trends in managerial finance from the 1990s that continued into the twenty-first century?

Throughout the twentieth century,the banking industry has often been the subject of a great deal of regulation,much of which has placed banks at a competitive disadvantage compared with other financial institutions in the United States and other banks throughout the world.

Financial Assets Instruments

Financial Markets and the Investment Banking Process

Financial Intermediaries and the Banking System

The Cost of Money Interest Rates

Business Organizations and the Tax Environment

Analysis of Financial Statements

Financial Planning and Control

Time Value of Money

Valuation Concepts

Risk and Rates of Return

The Cost of Capital

Capital Budgeting

Capital Structure and Dividend Policy Decisions

Working Capital Management

Investment and Securities

Investment Analysis and Valuation Techniques

Filters