Question 1
Bonds are bought and sold in __________ markets.
A. equity
B. debt
C. derivatives
D. foreign exchange
Question 2
Stocks are bought and sold in __________ markets.
A. equity
B. debt
C. derivatives
D. foreign exchange
Question 3
________ is the typical title of the corporate executive charged with determining the best repayment structure for borrowed funds to ensure timely repayment and sufficient cash for daily operations.
A. Chief Executive Officer (CEO.
B. Chief Financial Officer (CFO.
C. Chairman
D. Chief Operating Officer (COO.
Question 4
In agency theory, the owners of the business are referred to as __________, and the managers are referred to as __________ .
A. bondholders, principals
B. stockholders, bondholders
C. agents, principals
D. principals, agents
Question 5
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
Question 6
The organized financial intermediaries and the forums that promote the cycle of money is a good definition of which of the following main areas of finance?
A. corporate finance
B. investments
C. financial institutions and markets
D. international finance
Question 7
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
Question 8
The problem of motivating one party to act in the best interest of another party is known as the __________ .
A. leadership directive
B. management priority
C. principal-agent problem
D. sigma six structure
Question 9
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 centered on the purchase and sale of financial assets.
D. are concerned only with the addition of a multinational element to all finance activities.
Question 10
Currencies are bought and sold in ________ markets.
A. equity
B. debt
C. derivatives
D. foreign exchange
Question 11
Options are bought and sold in ________ markets.
A. equity
B. debt
C. derivatives
D. foreign exchange
Question 12
__________ 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
Question 13
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
Question 14
The sale of "used" securities, where the financial asset is being traded from one individual to another and the proceeds do not go to the original issuer of the security, is said to take place in the __________ market.
A. primary
B. money
C. secondary
D. capital
Question 15
Of the following, which group would be considered EXTERNAL PLAYERS of the firm?
A. the loan officer at the firm's commercial bank
B. the shop foreman
C. the human resources manager
D. all of the above
Question 16
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
Question 17
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
Question 18
Managing the firm's short-term financing activities is known a(n. __________ .
A. capital budgeting
B. capital structure
C. accounts receivable management
D. working capital management
Question 19
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.
Question 20
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
