Question 1

Nonwage compensation that might actually enhance owner value,in that such items may boost managers' productivity.

Accepted Answer

A) Agency theory 
B) Angel investor 
C) Invisible hand 
D) Perks or perquisites 
A) Agency theory 
B) Angel investor 
C) Invisible hand 
D) Perks or perquisites

Question 2

The most commonly accepted groups of asset classes include all of the following except:

Accepted Answer

A) Stocks 
B) Bonds 
C) Machinery and equipment 
D) Real estate 
A) Stocks 
B) Bonds 
C) Machinery and equipment 
D) Real estate

Question 3

Which of the following statements is correct?

Accepted Answer

A) Accountants are focused on what happened in the past. 
B) Financial managers are focused on what happened in the past. 
C) Both accountants and financial managers use total quality management systems to standardize data. 
D) Financial managers double-check the accountant's statements. 
A) Accountants are focused on what happened in the past. 
B) Financial managers are focused on what happened in the past. 
C) Both accountants and financial managers use total quality management systems to standardize data. 
D) Financial managers double-check the accountant's statements.

Question 4

The agency relationship in corporate finance refers to:

Accepted Answer

A) when the shareholders hire a manager to run their company. 
B) when the corporate hires an advertising agency to market their new product or service. 
C) when the board of directors are elected to staggered terms. 
D) when the board of directors oversee the CEO. 
A) when the shareholders hire a manager to run their company. 
B) when the corporate hires an advertising agency to market their new product or service. 
C) when the board of directors are elected to staggered terms. 
D) when the board of directors oversee the CEO.

Question 5

The practice generally known as double taxation is due to:

Accepted Answer

A) shareholders' dividends being taxed at both the federal and state levels. 
B) corporate income being taxed at both the federal and state levels. 
C) interest on shareholders' dividends being taxed as income. 
D) corporate incomes being taxed at the corporate level, then again at the shareholder level when corporate profits are paid out as dividends. 
A) shareholders' dividends being taxed at both the federal and state levels. 
B) corporate income being taxed at both the federal and state levels. 
C) interest on shareholders' dividends being taxed as income. 
D) corporate incomes being taxed at the corporate level, then again at the shareholder level when corporate profits are paid out as dividends.

Question 6

When determining a form of business organization,all of the following are considered EXCEPT:

Accepted Answer

A) who owns the firm. 
B) the owners' risks. 
C) the tax ramifications. 
D) the physical location of the business. 
A) who owns the firm. 
B) the owners' risks. 
C) the tax ramifications. 
D) the physical location of the business.

Question 7

From a taxation perspective,the form of business organization with the highest business level taxes is the:

Accepted Answer

A) sole proprietorship. 
B) corporation. 
C) partnership. 
D) S corporation. 
A) sole proprietorship. 
B) corporation. 
C) partnership. 
D) S corporation.

Question 8

Which of the following is legal duty between two parties where one party must act in the interest of the other party?

Accepted Answer

A) Agency theory 
B) Angel investor 
C) Fiduciary 
D) Investment banker 
A) Agency theory 
B) Angel investor 
C) Fiduciary 
D) Investment banker

Question 9

A metaphor used to illustrate how an individual pursuing his own interests also tends to promote the good of the community.

Accepted Answer

A) Agency theory 
B) Angel investor 
C) Invisible hand 
D) Perks or perquisites 
A) Agency theory 
B) Angel investor 
C) Invisible hand 
D) Perks or perquisites

Question 10

For corporations,maximizing the value of owner's equity can also be stated as:

Accepted Answer

A) maximizing retained earnings. 
B) maximizing earnings per share. 
C) maximizing net income. 
D) maximizing the stock price. 
A) maximizing retained earnings. 
B) maximizing earnings per share. 
C) maximizing net income. 
D) maximizing the stock price.

Question 11

In order for an angel investor or venture capitalist to exchange capital for ownership in a business that is a sole proprietorship,which of these must happen?

Accepted Answer

A) The business must be re-formed as a partnership 
B) The owner must give up some control 
C) The owner must co-sign on all loans 
D) Both A and B 
A) The business must be re-formed as a partnership 
B) The owner must give up some control 
C) The owner must co-sign on all loans 
D) Both A and B

Question 12

The board of directors:

Accepted Answer

A) are hired by the CEO. 
B) are elected by shareholders. 
C) have unlimited liability since they oversee the day-to-day operations of the firm. 
D) are employed by the Securities Exchange Commission to ensure its rules and regulations have been met. 
A) are hired by the CEO. 
B) are elected by shareholders. 
C) have unlimited liability since they oversee the day-to-day operations of the firm. 
D) are employed by the Securities Exchange Commission to ensure its rules and regulations have been met.

Question 13

Explain Adam Smith's argument regarding the invisible hand of the market.

Accepted Answer

Acting through competition and the free

Question 14

This should be the primary objective of a firm as it may actually be the most beneficial for society in the long run.

Accepted Answer

A) Minimizing layoffs 
B) Maximizing market share 
C) Minimizing costs 
D) Maximizing shareholder value 
A) Minimizing layoffs 
B) Maximizing market share 
C) Minimizing costs 
D) Maximizing shareholder value

Question 15

This is a general term for securities like stocks,bonds,and other assets that represent ownership in a cash flow.

Accepted Answer

A) Investment 
B) Financial asset 
C) Real asset 
D) Financial markets 
A) Investment 
B) Financial asset 
C) Real asset 
D) Financial markets

Question 16

This group is elected by stockholders to oversee management in a corporation.

Accepted Answer

A) Chief counselors 
B) Chief executives 
C) Board of directors 
D) Auditors 
A) Chief counselors 
B) Chief executives 
C) Board of directors 
D) Auditors

Question 17

These individuals help firms access capital markets and advise managers about how to interact with those capital markets.

Accepted Answer

A) Auditors 
B) Investment analysts 
C) Investment bankers 
D) Credit analysts 
A) Auditors 
B) Investment analysts 
C) Investment bankers 
D) Credit analysts

Question 18

The portion of a company's profits that are kept by the company rather than distributed to the stockholders as cash dividends is referred to as:

Accepted Answer

A) restricted earnings. 
B) venture capital. 
C) retained earnings. 
D) institutional investment. 
A) restricted earnings. 
B) venture capital. 
C) retained earnings. 
D) institutional investment.

Question 19

The overall goal of the financial manager is to:

Accepted Answer

A) minimize total costs. 
B) maximize net income. 
C) maximize earnings per share. 
D) maximize shareholder wealth. 
A) minimize total costs. 
B) maximize net income. 
C) maximize earnings per share. 
D) maximize shareholder wealth.

Question 20

As individual legal entities,corporations assume liability for their own debts,so the shareholders hold:

Accepted Answer

A) only limited liability. 
B) unlimited liability. 
C) shared liability. 
D) joint liability. 
A) only limited liability. 
B) unlimited liability. 
C) shared liability. 
D) joint liability.

Nonwage compensation that might actually enhance owner value,in that such items may boost managers' productivity.

The most commonly accepted groups of asset classes include all of the following except:

Which of the following statements is correct?

The agency relationship in corporate finance refers to:

The practice generally known as double taxation is due to:

When determining a form of business organization,all of the following are considered EXCEPT:

From a taxation perspective,the form of business organization with the highest business level taxes is the:

Which of the following is legal duty between two parties where one party must act in the interest of the other party?

A metaphor used to illustrate how an individual pursuing his own interests also tends to promote the good of the community.

For corporations,maximizing the value of owner's equity can also be stated as:

In order for an angel investor or venture capitalist to exchange capital for ownership in a business that is a sole proprietorship,which of these must happen?

The board of directors:

Explain Adam Smith's argument regarding the invisible hand of the market.

This should be the primary objective of a firm as it may actually be the most beneficial for society in the long run.

This is a general term for securities like stocks,bonds,and other assets that represent ownership in a cash flow.

This group is elected by stockholders to oversee management in a corporation.

These individuals help firms access capital markets and advise managers about how to interact with those capital markets.

The portion of a company's profits that are kept by the company rather than distributed to the stockholders as cash dividends is referred to as:

The overall goal of the financial manager is to:

As individual legal entities,corporations assume liability for their own debts,so the shareholders hold:

Reviewing Financial Statements

Analyzing Financial Statements

Time Value of Money

Time Value of Money

Valuing Bonds

Valuing Stockspart

Characterizing Risk and Return

Estimating Risk and Return

Calculating the Cost of Capital

Estimating Cash Flows on Capital Budgeting Projects

Weighing Net Present Value and Other Capital Budgeting Criteria

Working Capital and Policies

Financial Planning and Forecasting

Assessing Long-Term Debt, equity, and Capital Structure

Sharing Firm Wealth: Dividends, share Repurchases and Other Payouts

Issuing Capital and the Investment Banking Process

International Corporate Finance

Mergers and Acquisitions and Financial Distress

Filters

Exam 1: Introduction to Financial Management

Nonwage compensation that might actually enhance owner value,in that such items may boost managers' productivity.

The most commonly accepted groups of asset classes include all of the following except:

Which of the following statements is correct?

The agency relationship in corporate finance refers to:

The practice generally known as double taxation is due to:

When determining a form of business organization,all of the following are considered EXCEPT:

From a taxation perspective,the form of business organization with the highest business level taxes is the:

Which of the following is legal duty between two parties where one party must act in the interest of the other party?

A metaphor used to illustrate how an individual pursuing his own interests also tends to promote the good of the community.

For corporations,maximizing the value of owner's equity can also be stated as:

In order for an angel investor or venture capitalist to exchange capital for ownership in a business that is a sole proprietorship,which of these must happen?

The board of directors:

Explain Adam Smith's argument regarding the invisible hand of the market.

This should be the primary objective of a firm as it may actually be the most beneficial for society in the long run.

This is a general term for securities like stocks,bonds,and other assets that represent ownership in a cash flow.

This group is elected by stockholders to oversee management in a corporation.

These individuals help firms access capital markets and advise managers about how to interact with those capital markets.

The portion of a company's profits that are kept by the company rather than distributed to the stockholders as cash dividends is referred to as:

The overall goal of the financial manager is to:

As individual legal entities,corporations assume liability for their own debts,so the shareholders hold:

Reviewing Financial Statements

Analyzing Financial Statements

Time Value of Money

Time Value of Money

Valuing Bonds

Valuing Stockspart

Characterizing Risk and Return

Estimating Risk and Return

Calculating the Cost of Capital

Estimating Cash Flows on Capital Budgeting Projects

Weighing Net Present Value and Other Capital Budgeting Criteria

Working Capital and Policies

Financial Planning and Forecasting

Assessing Long-Term Debt, equity, and Capital Structure

Sharing Firm Wealth: Dividends, share Repurchases and Other Payouts

Issuing Capital and the Investment Banking Process

International Corporate Finance

Mergers and Acquisitions and Financial Distress

Filters