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. |