CORPORATE FINANCE EXAM
PRACTICE QUESTIONS AND
ANSWERS (QUICK REVISION 2026
The Sarbanes-Oxley Act of 2002 was passed in response to
A) the agency issue B) false disclosures in financial reporting C) insider trading
activities D) the decline in technology stocks - CORRECT ANSWER (S) -B) false
disclosures in financial reporting
A financial manager must choose between four alternative Assets: 1, 2, 3, and 4.
Each asset costs $35,000 and is expected to provide earnings over a three-year
period as described below.
Based on the wealth maximization goal, the financial manager would choose
________.
A) Asset 1 B) Asset 2 C) Asset 3 D) Asset 4 - CORRECT ANSWER (S) -A) Asset 1
, Which of the following is one of the key activities of a financial manager? A)
managing cost accounting B) making legal policy decisions C) managing financial
accounting D) making financing decisions - CORRECT ANSWER (S) -D) making
financing decisions
Corporate owners receive return ________. A) through capital appreciation and
retained earnings B) by realizing gains through increases in share price and
interest earnings C) by realizing gains through increases in share price and cash
dividends D) through interest earnings and earnings per share - CORRECT ANSWER
(S) -C) by realizing gains through increases in share price and cash dividends
Financial managers evaluating decision alternatives or potential actions must
consider ________.
A) only risk B) only return C) risk, return, and the impact on share price D) either
risk or return - CORRECT ANSWER (S) -C) risk, return, and the impact on share
price
PRACTICE QUESTIONS AND
ANSWERS (QUICK REVISION 2026
The Sarbanes-Oxley Act of 2002 was passed in response to
A) the agency issue B) false disclosures in financial reporting C) insider trading
activities D) the decline in technology stocks - CORRECT ANSWER (S) -B) false
disclosures in financial reporting
A financial manager must choose between four alternative Assets: 1, 2, 3, and 4.
Each asset costs $35,000 and is expected to provide earnings over a three-year
period as described below.
Based on the wealth maximization goal, the financial manager would choose
________.
A) Asset 1 B) Asset 2 C) Asset 3 D) Asset 4 - CORRECT ANSWER (S) -A) Asset 1
, Which of the following is one of the key activities of a financial manager? A)
managing cost accounting B) making legal policy decisions C) managing financial
accounting D) making financing decisions - CORRECT ANSWER (S) -D) making
financing decisions
Corporate owners receive return ________. A) through capital appreciation and
retained earnings B) by realizing gains through increases in share price and
interest earnings C) by realizing gains through increases in share price and cash
dividends D) through interest earnings and earnings per share - CORRECT ANSWER
(S) -C) by realizing gains through increases in share price and cash dividends
Financial managers evaluating decision alternatives or potential actions must
consider ________.
A) only risk B) only return C) risk, return, and the impact on share price D) either
risk or return - CORRECT ANSWER (S) -C) risk, return, and the impact on share
price
