Question 1

Money markets are markets where equity securities and debt securities with maturities of greater than one year are traded.

Accepted Answer

A) True 
 B)False

Question 2

Successful businesses typically progress through a series of life-cycle stages-from the idea stage to exiting the business; these five stages include the:

Accepted Answer

A) development stage, startup stage, survival stage, rapid growth stage, and maturity stage. 
B) idea stage, design stage, operating stage, rebuilding stage, and decline stage 
C) development stage, operating stage, rebuilding stage, rapid growth stage, and maturity stage 
D) idea stage, startup stage, rapid growth stage, survival stage, and decline stage 
A) development stage, startup stage, survival stage, rapid growth stage, and maturity stage. 
B) idea stage, design stage, operating stage, rebuilding stage, and decline stage 
C) development stage, operating stage, rebuilding stage, rapid growth stage, and maturity stage 
D) idea stage, startup stage, rapid growth stage, survival stage, and decline stage

Question 3

The secondary securities markets are involved in creating and issuing new securities, mortgages, and other claims to wealth.

Accepted Answer

A) True 
 B)False

Question 4

An effective financial system needs:

Accepted Answer

A) an efficient monetary system 
B) to be able to create capital by channeling savings into investment 
C) markets in which to buy and sell claims to wealth 
D) all of the above 
A) an efficient monetary system 
B) to be able to create capital by channeling savings into investment 
C) markets in which to buy and sell claims to wealth 
D) all of the above

Question 5

While the financial press chooses to highlight examples of unethical behavior, most individuals exhibit sound ethical behavior in their personal and business dealings and practices.

Accepted Answer

A) True 
 B)False

Question 6

The six principles of finance include (1) Money has a time value, (2) Higher returns are expected for taking on more risk, (3) Diversification of investments can reduce risk, (4) Financial markets are efficient in pricing securities, (5) Manager and stockholder objectives may differ, and (6) Reputation matters.

Accepted Answer

A) True 
 B)False

Question 7

The ______________ is a term used to describe the financial system, institutions, markets, businesses, individuals, and global interactions that help the economy operate efficiently

Accepted Answer

A) financial environment 
B) regulatory environment 
C) international environment 
D) operating environment 
E) none of the above 
A) financial environment 
B) regulatory environment 
C) international environment 
D) operating environment 
E) none of the above

Question 8

Three financial system components are the U.S.Treasury, financial institutions, and financial markets.

Accepted Answer

A) True 
 B)False

Question 9

Individuals and businesses hold money for purchases or payments they expect to make in the near future.

Accepted Answer

A) True 
 B)False

Question 10

One of the most significant functions of the financial system is the creation of money, which serves as a medium of exchange.

Accepted Answer

A) True 
 B)False

Question 11

The possible conflict between managers and owners is sometimes called the

Accepted Answer

A) principal-subordinate problem 
B) principal-agent problem 
C) boss-subordinate problem 
D) boss-agent problem 
E) none of the above 
A) principal-subordinate problem 
B) principal-agent problem 
C) boss-subordinate problem 
D) boss-agent problem 
E) none of the above

Question 12

The basic requirements for an effective financial system in a developed economy include:

Accepted Answer

A) a monetary system 
B) a savings-investment process 
C) markets for the transfer of financial assets 
D) all of the above 
A) a monetary system 
B) a savings-investment process 
C) markets for the transfer of financial assets 
D) all of the above

Question 13

_______________ is the study of how individuals prepare for financial emergencies, protect against premature death and the loss of property, and accumulate wealth over time.

Accepted Answer

A) Personal finance 
B) Corporate finance 
C) Entrepreneurial finance 
D) Investment banking 
E) none of the above 
A) Personal finance 
B) Corporate finance 
C) Entrepreneurial finance 
D) Investment banking 
E) none of the above

Question 14

An efficient ______________ that is comprised of a central bank and a banking system that is able to create and transfer a stable medium of exchange called money.

Accepted Answer

A) allocation system 
B) banking system 
C) monetary system 
D) market system 
E) none of the above 
A) allocation system 
B) banking system 
C) monetary system 
D) market system 
E) none of the above

Question 15

The principle of finance that "management objectives may differ from owner objectives" implies that owner returns may suffer as a result of manager objectives.

Accepted Answer

A) True 
 B)False

Question 16

Securitization is the process of pooling and packaging mortgage loans into debt securities.

Accepted Answer

A) True 
 B)False

Question 17

The saving-investment process involves which of the following financial functions:

Accepted Answer

A) creating and transferring money 
B) accumulating savings and lending and investing money 
C) marketing and transferring financial assets 
D) all of the above 
A) creating and transferring money 
B) accumulating savings and lending and investing money 
C) marketing and transferring financial assets 
D) all of the above

Question 18

Because of the financial crisis that began in 2008, by the end of 2009:

Accepted Answer

A) unemployment was in excess of 15 percent 
B) many homeowners owed more money on their mortgage loans than the their homes were worth 
C) home mortgage foreclosure rates and personal and business bankruptcies were rapidly declining as the recovery accelerated and strengthened 
D) over 500 banks in the U.S.had already failed with over 2,000 more being considered financially weak 
E) all of the above are true 
A) unemployment was in excess of 15 percent 
B) many homeowners owed more money on their mortgage loans than the their homes were worth 
C) home mortgage foreclosure rates and personal and business bankruptcies were rapidly declining as the recovery accelerated and strengthened 
D) over 500 banks in the U.S.had already failed with over 2,000 more being considered financially weak 
E) all of the above are true

Question 19

A basic requirement for an effective financial system is a monetary system that performs which of the following financial functions?

Accepted Answer

A) formation and transferring of money 
B) storing gold and silver to back up money 
C) creating jobs 
D) transferring real assets 
A) formation and transferring of money 
B) storing gold and silver to back up money 
C) creating jobs 
D) transferring real assets

Question 20

The Economic Stabilization Act of 2008 was passed in response to the financial crisis.

Accepted Answer

A) True 
 B)False

Money markets are markets where equity securities and debt securities with maturities of greater than one year are traded.

Successful businesses typically progress through a series of life-cycle stages-from the idea stage to exiting the business; these five stages include the:

The secondary securities markets are involved in creating and issuing new securities, mortgages, and other claims to wealth.

An effective financial system needs:

While the financial press chooses to highlight examples of unethical behavior, most individuals exhibit sound ethical behavior in their personal and business dealings and practices.

The ______________ is a term used to describe the financial system, institutions, markets, businesses, individuals, and global interactions that help the economy operate efficiently

Three financial system components are the U.S.Treasury, financial institutions, and financial markets.

Individuals and businesses hold money for purchases or payments they expect to make in the near future.

One of the most significant functions of the financial system is the creation of money, which serves as a medium of exchange.

The possible conflict between managers and owners is sometimes called the

The basic requirements for an effective financial system in a developed economy include:

_______________ is the study of how individuals prepare for financial emergencies, protect against premature death and the loss of property, and accumulate wealth over time.

An efficient ______________ that is comprised of a central bank and a banking system that is able to create and transfer a stable medium of exchange called money.

The principle of finance that "management objectives may differ from owner objectives" implies that owner returns may suffer as a result of manager objectives.

Securitization is the process of pooling and packaging mortgage loans into debt securities.

The saving-investment process involves which of the following financial functions:

Because of the financial crisis that began in 2008, by the end of 2009:

A basic requirement for an effective financial system is a monetary system that performs which of the following financial functions?

The Economic Stabilization Act of 2008 was passed in response to the financial crisis.

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuation

Securities Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters

Exam 1: The Financial Environment

Money markets are markets where equity securities and debt securities with maturities of greater than one year are traded.

Successful businesses typically progress through a series of life-cycle stages-from the idea stage to exiting the business; these five stages include the:

The secondary securities markets are involved in creating and issuing new securities, mortgages, and other claims to wealth.

An effective financial system needs:

While the financial press chooses to highlight examples of unethical behavior, most individuals exhibit sound ethical behavior in their personal and business dealings and practices.

The ______________ is a term used to describe the financial system, institutions, markets, businesses, individuals, and global interactions that help the economy operate efficiently

Three financial system components are the U.S.Treasury, financial institutions, and financial markets.

Individuals and businesses hold money for purchases or payments they expect to make in the near future.

One of the most significant functions of the financial system is the creation of money, which serves as a medium of exchange.

The possible conflict between managers and owners is sometimes called the

The basic requirements for an effective financial system in a developed economy include:

_______________ is the study of how individuals prepare for financial emergencies, protect against premature death and the loss of property, and accumulate wealth over time.

An efficient ______________ that is comprised of a central bank and a banking system that is able to create and transfer a stable medium of exchange called money.

The principle of finance that "management objectives may differ from owner objectives" implies that owner returns may suffer as a result of manager objectives.

Securitization is the process of pooling and packaging mortgage loans into debt securities.

The saving-investment process involves which of the following financial functions:

Because of the financial crisis that began in 2008, by the end of 2009:

A basic requirement for an effective financial system is a monetary system that performs which of the following financial functions?

The Economic Stabilization Act of 2008 was passed in response to the financial crisis.

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuation

Securities Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters