Question 1

Which one of the following correctly defines the upward chain of command in a typical corporate organizational structure?

Accepted Answer

A)   The vice president of finance reports to the chairman of the board.
B)   The chief executive officer reports to president.
C)   The controller reports to the president.
D)   The treasurer reports to the vice president of finance.
E)   The chief operations officer reports to the vice president of production.F) B) and E)
G) None of the above

Question 2

Which one of the following statements concerning NASDAQ is FALSE?

Accepted Answer

A)   It is easier to be listed on NASDAQ than on the NYSE.
B)   NASDAQ is an electronic market.
C)   NASDAQ is a dealer market.
D)   NASDAQ is an OTC market.
E)   NASDAQ is an auction market.F) B) and E)
G) B) and D)

Question 3

Which one of the following parties has ultimate control of a corporation?

Accepted Answer

A)   chairman of the Board
B)   board of directors
C)   chief executive officer
D)   chief operating office
E)   shareholdersF) C) and D)
G) A) and E)

Question 4

Shareholder A sold 500 shares of ABC stock on the New York Stock Exchange.This transaction:

Accepted Answer

A)   took place in the primary market.
B)   occurred in a dealer market.
C)   was facilitated in the secondary market.
D)   involved a proxy.
E)   was a private placement.F) B) and C)
G) A) and D)

Question 5

Which one of the following statements is correct?

Accepted Answer

A)   A general partnership is legally the same as a corporation.
B)   Both sole proprietorship and partnership income is taxed as individual income.
C)   Partnerships are the most complicated type of business to form.
D)   All business organizations have bylaws.
E)   Only firms organized as sole proprietorships have limited lives.F) A) and E)
G) B) and E)

Question 6

Which one of the following terms is defined as the management of a firm's long-term investments?

Accepted Answer

A)   working capital management
B)   financial allocation
C)   agency cost analysis
D)   capital budgeting
E)   capital structureF) C) and D)
G) A) and E)

Question 7

Which of the following questions are addressed by financial managers?
I.How should a product be marketed?
II.Should customers be given 30 or 45 days to pay for their credit purchases?
III.Should the firm borrow more money?
IV.Should the firm acquire new equipment?

Accepted Answer

A)   I and IV only
B)   II and III only
C)   I,II,and III only
D)   II,III,and IV only
E)   I,II,III,and IVF) B) and E)
G) All of the above

Question 8

From a liability point of view,what is the difference between investing in a sole proprietorship and a general partnership?

Accepted Answer

Both a sole proprietor and a general par...

Question 9

Describe the key advantages associated with the corporate form of organization.

Accepted Answer

The advantages of the corporate form of ...

Question 10

Which one of the following best illustrates that the management of a firm is adhering to the goal of financial management?

Accepted Answer

A)   increase in the amount of the quarterly dividend
B)   decrease in the per unit production costs
C)   increase in the number of shares outstanding
D)   decrease in the net working capital
E)   increase in the market value per shareF) A) and B)
G) All of the above

Question 11

Which one of the following terms is defined as a conflict of interest between the corporate shareholders and the corporate managers?

Accepted Answer

A)   articles of incorporation
B)   corporate breakdown
C)   agency problem
D)   bylaws
E)   legal liabilityF) All of the above
G) B) and C)

Question 12

Which of the following represent cash outflows from a corporation?
I.issuance of securities
II.payment of dividends
III.new loan proceeds
IV.payment of government taxes

Accepted Answer

A)   I and III only
B)   II and IV only
C)   I and IV only
D)   I,II,and IV only
E)   II,III,and IV onlyF) All of the above
G) A) and B)

Question 13

Which one of the following actions by a financial manager is most apt to create an agency problem?

Accepted Answer

A)   refusing to borrow money when doing so will create losses for the firm
B)   refusing to lower selling prices if doing so will reduce the net profits
C)   refusing to expand the company if doing so will lower the value of the equity
D)   agreeing to pay bonuses based on the market value of the company stock rather than on the firm's level of sales
E)   increasing current profits when doing so lowers the value of the firm's equityF) B) and E)
G) B) and C)

Question 14

Which one of the following statements is correct concerning the NYSE?

Accepted Answer

A)   The publicly traded shares of a NYSE-listed firm must be worth at least $250 million.
B)   The NYSE is the largest dealer market for listed securities in the United States.
C)   The listing requirements for the NYSE are more stringent than those of NASDAQ.
D)   Any corporation desiring to be listed on the NYSE can do so for a fee.
E)   The NYSE is an OTC market functioning as both a primary and a secondary market.F) B) and C)
G) A) and E)

Question 15

Sam,Alfredo,and Juan want to start a small U.S.business.Juan will fund the venture but wants to limit his liability to his initial investment and has no interest in the daily operations.Sam will contribute his full efforts on a daily basis but has limited funds to invest in the business.Alfredo will be involved as an active consultant and manager and will also contribute funds.Sam and Alfredo are willing to accept liability for the firm's debts as they feel they have nothing to lose by doing so.All three individuals will share in the firm's profits and wish to keep the initial organizational costs of the business to a minimum.Which form of business entity should these individuals adopt?

Accepted Answer

A)   sole proprietorship
B)   joint stock company
C)   limited partnership
D)   general partnership
E)   corporationF) D) and E)
G) A) and B)

Question 16

The Sarbanes-Oxley Act of 2002 is a governmental response to:

Accepted Answer

A)   decreasing corporate profits.
B)   the terrorists attacks on 9/11/2001.
C)   a weakening economy.
D)   deregulation of the stock exchanges.
E)   management greed and abuses.F) C) and E)
G) B) and E)

Question 17

Which type of business organization has all the respective rights and privileges of a legal person?

Accepted Answer

A)   sole proprietorship
B)   general partnership
C)   limited partnership
D)   corporation
E)   limited liability companyF) B) and E)
G) C) and E)

Question 18

List and briefly describe the three general areas of responsibility for a financial manager.

Accepted Answer

The three basic areas are:
1.capital bud...

Question 19

Which one of the following statements concerning stock exchanges is correct?

Accepted Answer

A)   NASDAQ is a broker market.
B)   The NYSE is a dealer market.
C)   The exchange with the strictest listing requirements is NASDAQ.
D)   Some large companies are listed on NASDAQ.
E)   Most debt securities are traded on the NYSE.F) A) and C)
G) B) and E)

Question 20

Which of the following parties are considered stakeholders of a firm?
I.employee
II.long-term creditor
III.government
IV.common stockholder

Accepted Answer

A)   I only
B)   IV only
C)   I and III only
D)   II and IV only
E)   II,III,and IV onlyF) A) and B)
G) D) and E)

Exam 1: Introduction to Corporate Finance

Which of the following represent cash outflows from a corporation? I.issuance of securities II.payment of dividends III.new loan proceeds IV.payment of government taxes

Correct Answer
verified

Which one of the following actions by a financial manager is most apt to create an agency problem?

Correct Answer
verified

Describe the key advantages associated with the corporate form of organization.

Correct Answer
verified
The advantages of the corporate form of ...
View Answer

Which one of the following correctly defines the upward chain of command in a typical corporate organizational structure?

Correct Answer
verified

Shareholder A sold 500 shares of ABC stock on the New York Stock Exchange.This transaction:

Correct Answer
verified

Which one of the following terms is defined as the management of a firm's long-term investments?

Correct Answer
verified

Which of the following questions are addressed by financial managers? I.How should a product be marketed? II.Should customers be given 30 or 45 days to pay for their credit purchases? III.Should the firm borrow more money? IV.Should the firm acquire new equipment?

Correct Answer
verified

The Sarbanes-Oxley Act of 2002 is a governmental response to:

Correct Answer
verified

Which of the following parties are considered stakeholders of a firm? I.employee II.long-term creditor III.government IV.common stockholder

Correct Answer
verified

Which type of business organization has all the respective rights and privileges of a legal person?

Correct Answer
verified

List and briefly describe the three general areas of responsibility for a financial manager.

Correct Answer
verified
The three basic areas are:
1.capital bud...
View Answer

Which one of the following statements is correct?

Correct Answer
verified

Which one of the following statements concerning stock exchanges is correct?

Correct Answer
verified

From a liability point of view,what is the difference between investing in a sole proprietorship and a general partnership?

Correct Answer
verified
Both a sole proprietor and a general par...
View Answer

Which one of the following parties has ultimate control of a corporation?

Correct Answer
verified

Which one of the following terms is defined as a conflict of interest between the corporate shareholders and the corporate managers?

Correct Answer
verified

Which one of the following best illustrates that the management of a firm is adhering to the goal of financial management?

Correct Answer
verified

Which one of the following statements is correct concerning the NYSE?

Correct Answer
verified

Correct Answer
verified

Which one of the following statements concerning NASDAQ is FALSE?

Correct Answer
verified

Exam 1: Introduction to Corporate Finance

Which of the following represent cash outflows from a corporation? I.issuance of securities II.payment of dividends III.new loan proceeds IV.payment of government taxes

Correct AnswerverifiedShow Answer

Which one of the following actions by a financial manager is most apt to create an agency problem?

Correct AnswerverifiedShow Answer

Describe the key advantages associated with the corporate form of organization.

Correct AnswerverifiedThe advantages of the corporate form of ...View AnswerShow Answer

Which one of the following correctly defines the upward chain of command in a typical corporate organizational structure?

Correct AnswerverifiedShow Answer

Shareholder A sold 500 shares of ABC stock on the New York Stock Exchange.This transaction:

Correct AnswerverifiedShow Answer

Which one of the following terms is defined as the management of a firm's long-term investments?

Correct AnswerverifiedShow Answer

Which of the following questions are addressed by financial managers? I.How should a product be marketed? II.Should customers be given 30 or 45 days to pay for their credit purchases? III.Should the firm borrow more money? IV.Should the firm acquire new equipment?

Correct AnswerverifiedShow Answer

The Sarbanes-Oxley Act of 2002 is a governmental response to:

Correct AnswerverifiedShow Answer

Which of the following parties are considered stakeholders of a firm? I.employee II.long-term creditor III.government IV.common stockholder

Correct AnswerverifiedShow Answer

Which type of business organization has all the respective rights and privileges of a legal person?

Correct AnswerverifiedShow Answer

List and briefly describe the three general areas of responsibility for a financial manager.

Correct AnswerverifiedThe three basic areas are:1.capital bud...View AnswerShow Answer

Which one of the following statements is correct?

Correct AnswerverifiedShow Answer

Which one of the following statements concerning stock exchanges is correct?

Correct AnswerverifiedShow Answer

From a liability point of view,what is the difference between investing in a sole proprietorship and a general partnership?

Correct AnswerverifiedBoth a sole proprietor and a general par...View AnswerShow Answer

Which one of the following parties has ultimate control of a corporation?

Correct AnswerverifiedShow Answer

Which one of the following terms is defined as a conflict of interest between the corporate shareholders and the corporate managers?

Correct AnswerverifiedShow Answer

Which one of the following best illustrates that the management of a firm is adhering to the goal of financial management?

Correct AnswerverifiedShow Answer

Which one of the following statements is correct concerning the NYSE?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which one of the following statements concerning NASDAQ is FALSE?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The advantages of the corporate form of ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The three basic areas are:
1.capital bud...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Both a sole proprietor and a general par...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified