Q-1: Of the following, which is the most recent example of legislation passed by the federal government to deal with a major economic or highly visible corporate event? A) The Federal Deposit Insurance Corporation Improvement Act B) The Securities and Exchange Act C) The Sarbanes-Oxley Act D) The Securities Act Q-2: Financial institutions and markets _______ A) are the organized financial intermediaries and the forums that promote the cycle of money. B) compose the set of financial activities that support the operations of a business. C) are the activities centered on the purchase and sale of financial assets. D) are concerned only with the addition of a multinational element to all finance activities. Q-3: Sale of new common stock in the primary market is regulated by the ________, and sales of used common on the secondary market is regulated by the ________. A) SEC; FDIC B) SEC; SEC C) FDIC; Federal Reserve D) Federal Reserve; SEC Q-4: ________ is the name given to the processes surrounding recognition of the principal-agent problem and ways to align agents with the interests of the principals. A) Principal theory B) Interested party theory C) Agency theory D) Compensation process theory Q-5: Managing the firm's short-term financing activities is known as ________. A) capital budgeting B) capital structure C) accounts receivable management D) working Q-6: Which of the following is NOT an activity of a financial institution or market? A) Bringing together buyers and sellers of financial assets B) Providing a market for the transaction of financial assets C) Providing information to buyers and/or sellers of financial assets D) All are activities of financial institutions. Q-7: ________ are the forums where buyers and sellers of financial assets and commodities meet. A) Housing markets B) Federal Reserve banks C) Financial markets D) Automotive shows Q-8: Which of the following best identifies the four main areas of finance? A) Exchange rate management, investments, financial institutions and markets, international B) Corporate, investments, capital structure, international C) Corporate, investments, financial institutions and markets, international D) Corporate, capital budgeting, financial institutions and markets, regulation Q-9: Bonds are bought and sold in ________ markets. A) equity B) debt C) derivatives D) foreign exchange Q-10: "Concern with the multinational elements of financial activities" best describes which of the four main areas of finance? A) Investments B) International finance C) Corporate finance D) Financial institutions and markets Q-11: Which of the following is NOT an example of an agency cost? A) Paying an accounting firm to audit your financial statements B) Paying an insurance company to assure that building codes have been met for new construction C) Paying a landscaping firm to maintain your firm's grounds D) All of the above are agency costs. Q-12: Of the following activities, which is NOT likely to be an interaction between the financial manager and the marketing manager? A) Costing of products B) Setting credit policies C) Determining that there are a sufficient number of trained workers to develop the product D) Setting advertising budgets Q-13: The means by which a company is financed refers to the firm's ________. A) capital budgeting B) capital structure C) accounts receivable management D) working capital management Q-14: Of the following activities which is MOST likely to be an interaction between the financial manager and the information systems manager? A) Developing a system to bill customers, pay suppliers, and track inventory B) Costing of products C) Setting credit policies D) Determining the appropriate pricing of products Q-15: Financial markets can be classified by which of the following? A) Type of asset traded B) Maturity of the financial asset C) Owner of the financial asset D) All of the above can be classified as financial markets. Q-16: A firm's stock price most closely reflects which of the following? A) Current interest rates B) Expected future cash flows of the firm C) The amount of debt held by the firm D) None of the above Q-17: ________ is NOT a main category of financial management. A) Capital budgeting B) Capital structure C) Accounts receivable management D) Working capital management Q-18: The sale of "new" securities, where the financial asset is being traded for the very first time, is said to take place in the ________ market. A) primary B) money C) secondary D) capital Q-19: Which of the following is NOT an activity of working capital management? A) Establishing the firm's receivable policies B) Establishing the firm's payment policies C) Choosing the appropriate level of inventory D) All of the above are working capital management activities. Q-20: Of the following which group would be considered INTERNAL PLAYERS of the firm? A) The finance manager B) The shop foreman C) The human resources manager D) All of the above  |
