Question 1

Risk, the magnitude and timing of cash flows are the key determinants of share price, which represent the wealth of the owners in the firm.

Accepted Answer

A) True 
 B)False

Question 2

The agency problem may result from a manager's concerns about ________.

Accepted Answer

A)  job security 
B)  maximizing shareholder value 
C)  corporate goals 
D)  increasing credit worthiness 
A)  job security 
B)  maximizing shareholder value 
C)  corporate goals 
D)  increasing credit worthiness

Question 3

Under which of the following legal forms of organization is ownership readily transferable?

Accepted Answer

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

Question 4

________ is one of the solution to the agency problem in publicly-held corporations.

Accepted Answer

A)  Stock options 
B)  Stock split 
C)  Demotion of employee designation 
D)  Distribution of dividends 
A)  Stock options 
B)  Stock split 
C)  Demotion of employee designation 
D)  Distribution of dividends

Question 5

The board of directors is typically responsible for ________.

Accepted Answer

A)  approving strategic goals and plans 
B)  managing day-to-day operations 
C)  arranging finance for approved long-term investments 
D)  maintaining and controlling the firm's daily cash balances 
A)  approving strategic goals and plans 
B)  managing day-to-day operations 
C)  arranging finance for approved long-term investments 
D)  maintaining and controlling the firm's daily cash balances

Question 6

As the risk of a stock investment increases, investors' ________.

Accepted Answer

A)  return will increase 
B)  return will decrease 
C)  required rate of return will decrease 
D)  required rate of return will increase 
A)  return will increase 
B)  return will decrease 
C)  required rate of return will decrease 
D)  required rate of return will increase

Question 7

Wealth maximization as the goal of a firm implies enhancing the wealth of ________.

Accepted Answer

A)  the auditors 
B)  the creditors 
C)  the federal reserve 
D)  the firm's stockholders 
A)  the auditors 
B)  the creditors 
C)  the federal reserve 
D)  the firm's stockholders

Question 8

The implementation of a pro-active ethics program is expected to result in ________.

Accepted Answer

A)  a positive corporate image and increased respect, but is not expected to affect cash flows 
B)  an increased share price resulting from a decrease in risk, but is not expected to affect cash flows 
C)  a positive corporate image and increased respect, but is not expected to affect share price 
D)  a positive corporate image and increased respect, a reduction in risk, and enhanced cash flow resulting in an increase in share price 
A)  a positive corporate image and increased respect, but is not expected to affect cash flows 
B)  an increased share price resulting from a decrease in risk, but is not expected to affect cash flows 
C)  a positive corporate image and increased respect, but is not expected to affect share price 
D)  a positive corporate image and increased respect, a reduction in risk, and enhanced cash flow resulting in an increase in share price

Question 9

A controller typically handles the accounting activities, such as tax management, data processing, financial accounting, and cost accounting.

Accepted Answer

A) True 
 B)False

Question 10

Finance is concerned with the process institutions, markets, and instruments involved in the transfer of money among and between individuals, businesses, and government.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is considered as a violation of business ethics?

Accepted Answer

A)  earnings management 
B)  repurchase of shares 
C)  using the call option on a callable bond when the interest rate is low 
D)  paying a high amount of dividends every year 
A)  earnings management 
B)  repurchase of shares 
C)  using the call option on a callable bond when the interest rate is low 
D)  paying a high amount of dividends every year

Question 12

Making investment decisions includes ________.

Accepted Answer

A)  inventory 
B)  fixed assets 
C)  accounts receivable 
D)  notes payable 
A)  inventory 
B)  fixed assets 
C)  accounts receivable 
D)  notes payable

Question 13

The responsibility for managing day-to-day operations and carrying out corporate policies belongs to the ________.

Accepted Answer

A)  board of directors 
B)  chief executive officer 
C)  stockholders 
D)  creditors 
A)  board of directors 
B)  chief executive officer 
C)  stockholders 
D)  creditors

Question 14

Corporate ethics policies typically apply to ________ in dealing with ________.

Accepted Answer

A)  employee actions; customers and creditors 
B)  employee actions; customers, vendors, and regulators 
C)  management actions; all corporate constituents 
D)  employee actions; all corporate constituents 
A)  employee actions; customers and creditors 
B)  employee actions; customers, vendors, and regulators 
C)  management actions; all corporate constituents 
D)  employee actions; all corporate constituents

Risk, the magnitude and timing of cash flows are the key determinants of share price, which represent the wealth of the owners in the firm.

The agency problem may result from a manager's concerns about ________.

Under which of the following legal forms of organization is ownership readily transferable?

________ is one of the solution to the agency problem in publicly-held corporations.

The board of directors is typically responsible for ________.

As the risk of a stock investment increases, investors' ________.

Wealth maximization as the goal of a firm implies enhancing the wealth of ________.

The implementation of a pro-active ethics program is expected to result in ________.

A controller typically handles the accounting activities, such as tax management, data processing, financial accounting, and cost accounting.

Finance is concerned with the process institutions, markets, and instruments involved in the transfer of money among and between individuals, businesses, and government.

Which of the following is considered as a violation of business ethics?

Making investment decisions includes ________.

The responsibility for managing day-to-day operations and carrying out corporate policies belongs to the ________.

Corporate ethics policies typically apply to in dealing with .

The Financial Market Environment

Financial Statements and Ratio Analysis

Cash Flow and Financial Planning

Time Value of Money

Interest Rates and Bond Valuation

Stock Valuation

Risk and Return

The Cost of Capital

Capital Budgeting Techniques

Capital Budgeting Cash Flows

Risk and Refinements in Capital Budgeting

Leverage and Capital Structure

Payout Policy

Working Capital and Current Assets Management

Current Liabilities Management

Hybrid and Derivative Securities

Mergers, Lbos, Divestitures, and Business Failure

International Managerial Finance

Filters

Exam 1: The Role of Managerial Finance

Risk, the magnitude and timing of cash flows are the key determinants of share price, which represent the wealth of the owners in the firm.

The agency problem may result from a manager's concerns about ________.

Under which of the following legal forms of organization is ownership readily transferable?

________ is one of the solution to the agency problem in publicly-held corporations.

The board of directors is typically responsible for ________.

As the risk of a stock investment increases, investors' ________.

Wealth maximization as the goal of a firm implies enhancing the wealth of ________.

The implementation of a pro-active ethics program is expected to result in ________.

A controller typically handles the accounting activities, such as tax management, data processing, financial accounting, and cost accounting.

Finance is concerned with the process institutions, markets, and instruments involved in the transfer of money among and between individuals, businesses, and government.

Which of the following is considered as a violation of business ethics?

Making investment decisions includes ________.

The responsibility for managing day-to-day operations and carrying out corporate policies belongs to the ________.

Corporate ethics policies typically apply to ________ in dealing with ________.

The Financial Market Environment

Financial Statements and Ratio Analysis

Cash Flow and Financial Planning

Time Value of Money

Interest Rates and Bond Valuation

Stock Valuation

Risk and Return

The Cost of Capital

Capital Budgeting Techniques

Capital Budgeting Cash Flows

Risk and Refinements in Capital Budgeting

Leverage and Capital Structure

Payout Policy

Working Capital and Current Assets Management

Current Liabilities Management

Hybrid and Derivative Securities

Mergers, Lbos, Divestitures, and Business Failure

International Managerial Finance

Filters

Corporate ethics policies typically apply to in dealing with .