FI 302 Exam (Parisi) Questions and All
Correct Answers 2026-2027 Updated.
1) Which of the following statements best represents what finance is about?
A) How political, social, and economic forces affect corporations
B) Maximizing profits
C) The study of how people and businesses make investment decisions and how to finance
those decisions
D) Reducing risk - Answer C) The study of how people and businesses make investment
decisions and how to finance those decisions
2) From a financial point of view, a company that decides to develop new product is making
A) a financing decision.
B) an investment decision.
C) a capital structure decision.
D) a cash flow decision. - Answer B) an investment decision.
3) Working capital management refers to
A) long-term financing decisions.
B) the management of cash flows.
C) investing in product development.
D) capital structure. - Answer B) the management of cash flows.
4) Finance managers need to interact constantly with
A) marketing managers.
B) accounting staff.
C) management information systems staff.
D) all of the above. - Answer D) all of the above.
5) The personal decision to obtain a college degree in business is primarily a(n) ________
decision.
A) social
B) investment
C) ethical
D) financing - Answer B) investment
, 6) The area of finance that deals with long-term investment decisions is known as
A) capital structure.
B) working capital management.
C) financial strategy.
D) capital budgeting. - Answer D) capital budgeting.
1) Maximization of shareholder wealth as a goal is superior to accounting profit maximization
because
A) it considers the time value of the money.
B) following the shareholder wealth maximization goal will ensure high stock prices.
C) accounting profits are not the same as cash flows.
D) A and C. - Answer D) A and C.
2) Which of the following best describes the goal of the firm?
A) The maximization of the total market value of the firm's common stock
B) Profit maximization
C) Risk minimization
D) None of the above - Answer A) The maximization of the total market value of the firm's
common stock
3) Profit maximization does not adequately describe the goal of the firm because
A) profit maximization does not require the consideration of risk.
B) profit maximization ignores the timing of a project's return.
C) maximization of dividend payout ratio is a better description of the goal of the firm.
D) A and B. - Answer D) A and B.
4) Which of the following goals of the firm is equivalent to the maximization of shareholder
wealth?
A) Profit maximization
B) Risk minimization
C) Maximization of the total market value of the firm's common stock
D) None of the above - Answer C) Maximization of the total market value of the firm's
common stock
Correct Answers 2026-2027 Updated.
1) Which of the following statements best represents what finance is about?
A) How political, social, and economic forces affect corporations
B) Maximizing profits
C) The study of how people and businesses make investment decisions and how to finance
those decisions
D) Reducing risk - Answer C) The study of how people and businesses make investment
decisions and how to finance those decisions
2) From a financial point of view, a company that decides to develop new product is making
A) a financing decision.
B) an investment decision.
C) a capital structure decision.
D) a cash flow decision. - Answer B) an investment decision.
3) Working capital management refers to
A) long-term financing decisions.
B) the management of cash flows.
C) investing in product development.
D) capital structure. - Answer B) the management of cash flows.
4) Finance managers need to interact constantly with
A) marketing managers.
B) accounting staff.
C) management information systems staff.
D) all of the above. - Answer D) all of the above.
5) The personal decision to obtain a college degree in business is primarily a(n) ________
decision.
A) social
B) investment
C) ethical
D) financing - Answer B) investment
, 6) The area of finance that deals with long-term investment decisions is known as
A) capital structure.
B) working capital management.
C) financial strategy.
D) capital budgeting. - Answer D) capital budgeting.
1) Maximization of shareholder wealth as a goal is superior to accounting profit maximization
because
A) it considers the time value of the money.
B) following the shareholder wealth maximization goal will ensure high stock prices.
C) accounting profits are not the same as cash flows.
D) A and C. - Answer D) A and C.
2) Which of the following best describes the goal of the firm?
A) The maximization of the total market value of the firm's common stock
B) Profit maximization
C) Risk minimization
D) None of the above - Answer A) The maximization of the total market value of the firm's
common stock
3) Profit maximization does not adequately describe the goal of the firm because
A) profit maximization does not require the consideration of risk.
B) profit maximization ignores the timing of a project's return.
C) maximization of dividend payout ratio is a better description of the goal of the firm.
D) A and B. - Answer D) A and B.
4) Which of the following goals of the firm is equivalent to the maximization of shareholder
wealth?
A) Profit maximization
B) Risk minimization
C) Maximization of the total market value of the firm's common stock
D) None of the above - Answer C) Maximization of the total market value of the firm's
common stock
