BCOR 2204 FINANCE QUIZ 1 - CU BOULDER UPDATED
ACTUAL QUESTIONS AND CORRECT ANSWERS
Question:
1. Finance
Answer:
measurement and study of an organization's cash flows
Question:
2. Present Value
Answer:
mathematical method of creating equivalence across time and risk for cash flows
Question:
3. Stakeholders
Answer:
groups such as employees, customers, suppliers, creditors, owners, and others
who have a direct economic link to the firm
Question:
4. Business ethics
Answer:
standards of conduct or moral judgment that apply to persons engaged in
commerce
Question:
5. Goal of the Firm
Answer:
Maximizing shareholder wealth
Question:
6. Corporate Governance
Answer:
the rules, processes, and laws by which companies are operated, controlled, and
regulated
Question:
7. principal-agent relationship
Answer:
An arrangement in which an agent acts on the behalf of a principal
, Question:
8. Agency Problems
Answer:
occurs when managers place personal goals ahead of the shareholders
Question:
9. Agency Costs
Answer:
arise from agency problems that are born by shareholders and represent a loss
Question:
10. Incentive Plans
Answer:
management compensation plans that tie management compensation to share
price; one example involves the granting of stock options
Question:
11. Performance Plans
Answer:
tie management compensation to measures such as EPS or growth in EPS.
Performance shares and/or cash bonuses are used as compensation under these
plans
Question:
12. Sole Proprietorship
Answer:
a business owned and managed by a single individual
Question:
13. General Partnership
Answer:
partnership in which partners share equally in both responsibility and liability
Question:
14. limited partnership
Answer:
partnership in which only one partner is required to be a general partner and
offers limited liability
ACTUAL QUESTIONS AND CORRECT ANSWERS
Question:
1. Finance
Answer:
measurement and study of an organization's cash flows
Question:
2. Present Value
Answer:
mathematical method of creating equivalence across time and risk for cash flows
Question:
3. Stakeholders
Answer:
groups such as employees, customers, suppliers, creditors, owners, and others
who have a direct economic link to the firm
Question:
4. Business ethics
Answer:
standards of conduct or moral judgment that apply to persons engaged in
commerce
Question:
5. Goal of the Firm
Answer:
Maximizing shareholder wealth
Question:
6. Corporate Governance
Answer:
the rules, processes, and laws by which companies are operated, controlled, and
regulated
Question:
7. principal-agent relationship
Answer:
An arrangement in which an agent acts on the behalf of a principal
, Question:
8. Agency Problems
Answer:
occurs when managers place personal goals ahead of the shareholders
Question:
9. Agency Costs
Answer:
arise from agency problems that are born by shareholders and represent a loss
Question:
10. Incentive Plans
Answer:
management compensation plans that tie management compensation to share
price; one example involves the granting of stock options
Question:
11. Performance Plans
Answer:
tie management compensation to measures such as EPS or growth in EPS.
Performance shares and/or cash bonuses are used as compensation under these
plans
Question:
12. Sole Proprietorship
Answer:
a business owned and managed by a single individual
Question:
13. General Partnership
Answer:
partnership in which partners share equally in both responsibility and liability
Question:
14. limited partnership
Answer:
partnership in which only one partner is required to be a general partner and
offers limited liability
