FINANCE 301 Exam Study set | 250 Practice
Questions Solved 100% Correct | Verified
Answers
the management of money - ANSWER finance
involves how companies raise and invest money and manage their financial resources -
ANSWER corporate finance
financial markets where issuers and investors buy and sell debt and equity securities -
ANSWER capital markets
1. Which of the following concerning the relationship between risk and return is
correct?
A. A risk averse investor would prefer a stock with an expected 10% return and a
standard deviation of 20% to a stock with an expected return of 10% with a standard
deviation of 10%
B. Investors generally demand higher return for less risky investments
C. Riskier investments tend to have higher returns
D. Safer investments historically provide the highest returns
E. A risk taking investor would prefer a stock with an expected 10% return and a
standard deviation of 10% to a stock with an expected return of 10% with a standard
deviation of 20% - ANSWER Riskier investments tend to have higher returns
Which of the following concerning the relationship between risk and return is correct?
A. A risk averse investor would prefer a stock with an expected 10% return and a
standard deviation of 10% to a stock with an expected return of 10% with a standard
deviation of 20%
B. Investors generally require a lower return as they take on more risk
,C. Safer investments tend to have higher returns
D. Higher risk investments historically provided lower returns
E. A risk taking investor would prefer a stock with an expected 10% return and a
standard deviation of 10% to a stock with an expected return of 10% with a standard
deviation of 20% - ANSWER A risk averse investor would prefer a stock with an expected
10% return and a standard deviation of 10% to a stock with an expected return of 10%
with a standard deviation of 20%
what is the equation for calculating stock return? - ANSWER (initial stock price-ending
stock price) + dividends / initial stock price
what is the goal of working capital management? - ANSWER minimize the use of short
term capital
what is the goal of capital budgeting? - ANSWER make long-term investments that offer
the highest risk-adjusted returns
Which of the following is one of the three primary areas of finance?
A. Tax
B. Institutions & Markets
C. Audit & Assurance
D. Financial Accounting
E. International Finance - ANSWER B. Institutions & Markets
Which of the following is one of the three primary areas of finance?
A. Global Finance
B. Corporate Governance
C. Audit & Assurance
,D. Financial Accounting
E. Investments - ANSWER E. Investments
According to the Theory of Efficient Capital Markets:
A. Stock prices are not affected by new information
B. Current stock prices reflect all publicly available information
C. Stock prices adjust to new information slowly over time
D. Stock prices only react instantly to positive financial information
E. Investors can easily beat the market - ANSWER Current stock prices reflect all publicly
available information
According to the Theory of Efficient Capital Markets:
A. Stock prices do not reflect all publicly available information
B. Stock prices take a long time to capture new information
C. Stock prices react instantaneously to new information
D. Stock prices react positively to all new information
E. Investors can easily predict exact stock prices - ANSWER C. Stock prices react
instantaneously to new information
Which of the following statements regarding business organizational forms is true?
A. Partnerships are the easiest business organizational form to establish
B. It is more difficult to raise capital in a corporation than in a sole proprietorship
C. Liability of owners is limited to their investment in a corporation
D. The greatest advantage of a corporation is double taxation
E. Corporations have always been the dominant form of business organization -
ANSWER C. Liability of owners is limited to their investment in a corporation
, Which of the following statements regarding business organizational forms is true?
A. Liability of owners is limited to their investment in a Partnership
B. Owners of corporations are taxed on their share of profits, but there are no taxes on
the business
C. Corporations are easier to form than partnerships
D. The primary advantage of a corporation is that it is relatively easy to raise capital
E. Corporations have always been the dominant form of business organization -
ANSWER D. The primary advantage of a corporation is that it is relatively easy to raise
capital
the time value of money implies that - ANSWER a dollar today is worth more than a
dollar tomorrow
. Which of the following is a tenet of good management according to Gordon Gekko?
A. Managerial efficiency is not important
B. Management is not accountable to shareholders
C. Management should have ownership in the company
D. Shareholder activism hurts a company's stock price
E. Managers that have a stake in the company create a greater potential for the agency
problem - ANSWER C. Management should have ownership in the company
Which of the following is a principle held by Gordon Gekko?
A. Management must be accountable to the shareholders
B. Management should not have a stake in the company
C. Managers that have a stake in the company create a greater potential for the agency
problem
D. Managerial efficiency is not important
Questions Solved 100% Correct | Verified
Answers
the management of money - ANSWER finance
involves how companies raise and invest money and manage their financial resources -
ANSWER corporate finance
financial markets where issuers and investors buy and sell debt and equity securities -
ANSWER capital markets
1. Which of the following concerning the relationship between risk and return is
correct?
A. A risk averse investor would prefer a stock with an expected 10% return and a
standard deviation of 20% to a stock with an expected return of 10% with a standard
deviation of 10%
B. Investors generally demand higher return for less risky investments
C. Riskier investments tend to have higher returns
D. Safer investments historically provide the highest returns
E. A risk taking investor would prefer a stock with an expected 10% return and a
standard deviation of 10% to a stock with an expected return of 10% with a standard
deviation of 20% - ANSWER Riskier investments tend to have higher returns
Which of the following concerning the relationship between risk and return is correct?
A. A risk averse investor would prefer a stock with an expected 10% return and a
standard deviation of 10% to a stock with an expected return of 10% with a standard
deviation of 20%
B. Investors generally require a lower return as they take on more risk
,C. Safer investments tend to have higher returns
D. Higher risk investments historically provided lower returns
E. A risk taking investor would prefer a stock with an expected 10% return and a
standard deviation of 10% to a stock with an expected return of 10% with a standard
deviation of 20% - ANSWER A risk averse investor would prefer a stock with an expected
10% return and a standard deviation of 10% to a stock with an expected return of 10%
with a standard deviation of 20%
what is the equation for calculating stock return? - ANSWER (initial stock price-ending
stock price) + dividends / initial stock price
what is the goal of working capital management? - ANSWER minimize the use of short
term capital
what is the goal of capital budgeting? - ANSWER make long-term investments that offer
the highest risk-adjusted returns
Which of the following is one of the three primary areas of finance?
A. Tax
B. Institutions & Markets
C. Audit & Assurance
D. Financial Accounting
E. International Finance - ANSWER B. Institutions & Markets
Which of the following is one of the three primary areas of finance?
A. Global Finance
B. Corporate Governance
C. Audit & Assurance
,D. Financial Accounting
E. Investments - ANSWER E. Investments
According to the Theory of Efficient Capital Markets:
A. Stock prices are not affected by new information
B. Current stock prices reflect all publicly available information
C. Stock prices adjust to new information slowly over time
D. Stock prices only react instantly to positive financial information
E. Investors can easily beat the market - ANSWER Current stock prices reflect all publicly
available information
According to the Theory of Efficient Capital Markets:
A. Stock prices do not reflect all publicly available information
B. Stock prices take a long time to capture new information
C. Stock prices react instantaneously to new information
D. Stock prices react positively to all new information
E. Investors can easily predict exact stock prices - ANSWER C. Stock prices react
instantaneously to new information
Which of the following statements regarding business organizational forms is true?
A. Partnerships are the easiest business organizational form to establish
B. It is more difficult to raise capital in a corporation than in a sole proprietorship
C. Liability of owners is limited to their investment in a corporation
D. The greatest advantage of a corporation is double taxation
E. Corporations have always been the dominant form of business organization -
ANSWER C. Liability of owners is limited to their investment in a corporation
, Which of the following statements regarding business organizational forms is true?
A. Liability of owners is limited to their investment in a Partnership
B. Owners of corporations are taxed on their share of profits, but there are no taxes on
the business
C. Corporations are easier to form than partnerships
D. The primary advantage of a corporation is that it is relatively easy to raise capital
E. Corporations have always been the dominant form of business organization -
ANSWER D. The primary advantage of a corporation is that it is relatively easy to raise
capital
the time value of money implies that - ANSWER a dollar today is worth more than a
dollar tomorrow
. Which of the following is a tenet of good management according to Gordon Gekko?
A. Managerial efficiency is not important
B. Management is not accountable to shareholders
C. Management should have ownership in the company
D. Shareholder activism hurts a company's stock price
E. Managers that have a stake in the company create a greater potential for the agency
problem - ANSWER C. Management should have ownership in the company
Which of the following is a principle held by Gordon Gekko?
A. Management must be accountable to the shareholders
B. Management should not have a stake in the company
C. Managers that have a stake in the company create a greater potential for the agency
problem
D. Managerial efficiency is not important
