FINA 3332: Exam 1 Practice Questions
and All Solved Solutions Graded A+||
LATEST UPDATE 2026
finance -CORRECTANSWER - study of methods of acquiring funds and of how money
is managed
- originally grew from accounting
- incorporates accounting, math, statistics, economics
areas of finance -CORRECTANSWER - financial management (corporate)
- investments (personal)
- financial markets and institutions (public)
financial management (corporate) -CORRECTANSWER business finance, managerial
finance, corporate finance
financial markets and institutions (public) -CORRECTANSWER money and banking
risk vs. expected return -CORRECTANSWER E(r) and risk positively related
four types of firms -CORRECTANSWER (1) sole proprietorships
(2) partnerships
(3) limited liability companies (LLC)
, (4) corporations
sole proprietorships -CORRECTANSWER - straightforward
- many new businesses use this organizational form
- principal limitation: no separation between firm and owner (firm can only have 1
owner)
- owner has unlimited personal liability for any of the firm's debt
- life is limited to life of owner
- difficult to transfer ownership
partnerships -CORRECTANSWER - more than one owner
- all are liable for the firm's debt (a lender can require any partner to repay all the firm's
outstanding debts)
- ends on death/withdrawal of any single partner
- can avoid liquidation if the partnership agreement provides for alternatives such as a
buyout of a deceased/withdrawn partner
limited partnerships -CORRECTANSWER partnership with two kinds of owners:
- general partners
- limited partners
general partners -CORRECTANSWER - have same rights and privileges as partners in
any general partnership
and All Solved Solutions Graded A+||
LATEST UPDATE 2026
finance -CORRECTANSWER - study of methods of acquiring funds and of how money
is managed
- originally grew from accounting
- incorporates accounting, math, statistics, economics
areas of finance -CORRECTANSWER - financial management (corporate)
- investments (personal)
- financial markets and institutions (public)
financial management (corporate) -CORRECTANSWER business finance, managerial
finance, corporate finance
financial markets and institutions (public) -CORRECTANSWER money and banking
risk vs. expected return -CORRECTANSWER E(r) and risk positively related
four types of firms -CORRECTANSWER (1) sole proprietorships
(2) partnerships
(3) limited liability companies (LLC)
, (4) corporations
sole proprietorships -CORRECTANSWER - straightforward
- many new businesses use this organizational form
- principal limitation: no separation between firm and owner (firm can only have 1
owner)
- owner has unlimited personal liability for any of the firm's debt
- life is limited to life of owner
- difficult to transfer ownership
partnerships -CORRECTANSWER - more than one owner
- all are liable for the firm's debt (a lender can require any partner to repay all the firm's
outstanding debts)
- ends on death/withdrawal of any single partner
- can avoid liquidation if the partnership agreement provides for alternatives such as a
buyout of a deceased/withdrawn partner
limited partnerships -CORRECTANSWER partnership with two kinds of owners:
- general partners
- limited partners
general partners -CORRECTANSWER - have same rights and privileges as partners in
any general partnership
