| The term used to describe the study of means by which a manager can determine which long term investments to pursue, how to pay for those investments, and how to manage the daily finances of the firm: | Business finance |
| The top financial officer in a firm is commonly referred to as the: | Chief financial officer |
| The person who is in charge of cash management and capital expenditures is called: | Treasurer |
| The process of managing a firm’s long-term investments is called: | Capital budgeting |
| The amount of debt and equity used by a firm to finance its operations is called the firm’s: | Capital structure |
| Short-term assets and short-term liabilities are referred to as the firm’s: | Working capital |
| The management of a firm’s cash, inventory, and payables is referred to as: | Working capital management |
| A sole proprietorship is defined as a business: | That is owned by a single individual. |
| A business organization that is similar to a sole proprietorship but has two or more than owners is called a: | Partnership |
| The document which specifies how net profits and losses are to be divided among two or more individual owners, who are personally liable for the firm’s debts, is called: | A partnership agreement |
| A business entity which treated as a legal”person” is called a: | Corporation |
| The legal papers which designate a firm’s name, nature of business, and intended life are called the: | Articles of incorporation |
| The rules which outline how a corporation will regulate itself are referred to as the: | Bylaws |
| Any situation where a potential conflict can arise between the firm’s owners and its managers is referred to as a(n): | agency problem |
| Anyone other than the firm’s stockholders or creditors that might have a claim on the cash flows of a firm is called a: | Stakeholder |
| The primary market refers to: | The original sale of securities by the issuer. |
| The market for trading securities after the original sale is called the: | Secondary market |
| The sale of securities to the general public by the issuer is known as a: | Public offering |
| A negotiated sale of securities by an issuer to a specific buyer is called a(n): | Private placement |
| Over the counter markets are | Dealer markets |
| A securities market with a physical location that is designed to match buyers with sellers is called a(n) | Auction market |
| When a company qualifies to have its securities traded on a particular exchange the stock of the company is said to be : | Scheduled with the exchange. |
| Which of the following questions falls into the financial topic of investments? | What are the risks involved owning a particular security? |
| Which of the following are considered financial institutions: Bank, hospital, insurance company, or home builder? | Bank and insurance company |
| Which of the following are careers in finance: Insurance agent, security analyst, portfolio manager, corporate treasurer? | All. |
| Business finance addresses which one of the following questions? | Which long-term assets should a firm acquire? |
| Which of the following functions should be assigned to the controller rather than the treasurer? | Data processing |
| Which one of the following statements is correct concerning the organizational chart of a corporation? | The tax manager generally reports to the controller rather than the treasurer. |
| The purpose of capital budgeting is to: | Identify assets that produce value in excess of their cost. |
| Which one of the following statements is related to capital budgeting? | A firm should consider the size, risk, and timing of an asset’s cash flows before deciding to purchase that asset. |
| When a firm decides to borrow money rather than issue stock to raise funds for a new project, the company is making a (n): | Capital structure decision. |
| The capital structure of a firm refers to the firm’s: | Long-term debt and equity. |
| Working capital management includes which of the following; controlling the inventory level, determining when to pay suppliers, deciding how much long-term debt to assume, or controlling the amount of cash that is readily available: | Controlling the inventory level, determining when to pay suppliers, and controlling the amount of cash that is readily available. |
| The daily financial operations of a firm are primarily controlled by managing the | Working capital of the firm. |
| A sole proprietor: | Assumes personal liability for all of the debts of the business. |
| The most widely used form of business entity in the U.S. is the: | Sole proprietorship |
| Under a general partnership: | Each partner receives only a proportionate share of the profits but is responsible for 100% of the partnership debts. |
| In a general partnership, each general partner is personally liable for: | The total debts of the partnership, even if he or she was unaware that said debts were incurred. |
| The advantage of being a limited partner in a limited partnership is the ability to: | Invest in a partnership while limiting your losses to the amount you invested. |
| Which one of the following statements about a limited partnership is correct? | A limited partnership can sell his or her interest without the partnership dissolving. |
| A corporation: | May be considered a resident of an individual state. |
| The bylaws of a corporation include information such as the: | Method by which directors are elected. |
| The primary advantages of a limited liability company are the: | Means of taxation and the limits on the liabilities assumed by the owners. |
| The general purpose of a limited liability company is to: | Be taxed like a partnership and provide limited liability for the owners. |
| The primary goal of financial management is to maximize the: | Market value of the existing stock. |
| Which of the following actions best matches the primary goal of financial management? | Increasing the market value of the equity by improving the efficiency of operations. |
| Which of the following situations is most apt to create an agency problem? | A manager receives a bonus because he or she has hired the most new employees in the past year. |
| An agency problem frequently exists in situations where there is a separation of: | Company ownership and company management. |
| The control of a corporation ultimately lies with the: | Company stockholders |
| The Sarbanes Oxley act: | Makes the officers of a public corporation personally responsible for the firm’s financial statements. |
| Which of the following transactions occurs in the primary market? | POQ sells new shares of POQ to Frederico. |
| If you purchase 100 shares if GE stock on the NYSE today, the transaction is most likely occurring: | In the secondary market. |
| Which of the following statements is correct concerning the secondary market? | Secondary markets can be either dealer or auction markets. |
| Which of the following are characteristics of a dealer market? | Buyers purchase securities for themselves at their own risk and transactions are done electronically without there being a physical location. |
| NASDAQ is: | An over the counter market. |
| All large company stocks such as GE and Microsoft: | Can trade on the exchange of their choosing as long as they qualify for listing. |
| Which one of the following statements is correct concerning the financial markets in the U.S.? | The NYSE lists significantly less companies than does NASDAQ. |
| The financial markets in the U.S.: | Transact trades in both the primary and secondary markets. |
