FIN 335 CORRECT EXAMS ANSWERS AND
QUESTIONS SET A+
✔✔The management of the firms short term assets and liabilities is called - ✔✔Working
capital management
✔✔A business entity operated and taxed like a partnership but with the limited liability
feature for owners is called a - ✔✔Limited liability corporation
✔✔The possibility of conflict of interest between the stockholders and managemnt of
the firm is - ✔✔The agency problem
✔✔Agency costs - ✔✔The costs of the conflict of interest between the stockholders and
management
✔✔A stakeholder is - ✔✔A person or entity other than a stockholder or creditor who
potentially had a claim on the cash flows of the firm
✔✔The origional sale of securities by governments and corporations occurs in the -
✔✔Primary market
✔✔The purchase and sale of securities after the origional issuance occurs in the -
✔✔Secondary market
✔✔What does not offer limited liability - ✔✔Sole proprietorship
✔✔You are purchhasing 100 shares of stock in a small technology firm that trades in
the US, you would most likely purchase shares in - ✔✔A secondary market operated as
a dealer market
✔✔If you are concerned with the risk a business poses to your accumulated personal
wealth you should start a ... - ✔✔Corporation
QUESTIONS SET A+
✔✔The management of the firms short term assets and liabilities is called - ✔✔Working
capital management
✔✔A business entity operated and taxed like a partnership but with the limited liability
feature for owners is called a - ✔✔Limited liability corporation
✔✔The possibility of conflict of interest between the stockholders and managemnt of
the firm is - ✔✔The agency problem
✔✔Agency costs - ✔✔The costs of the conflict of interest between the stockholders and
management
✔✔A stakeholder is - ✔✔A person or entity other than a stockholder or creditor who
potentially had a claim on the cash flows of the firm
✔✔The origional sale of securities by governments and corporations occurs in the -
✔✔Primary market
✔✔The purchase and sale of securities after the origional issuance occurs in the -
✔✔Secondary market
✔✔What does not offer limited liability - ✔✔Sole proprietorship
✔✔You are purchhasing 100 shares of stock in a small technology firm that trades in
the US, you would most likely purchase shares in - ✔✔A secondary market operated as
a dealer market
✔✔If you are concerned with the risk a business poses to your accumulated personal
wealth you should start a ... - ✔✔Corporation
