FINANCE 301 Practice Questions Solved 100%
Correct | Verified Answers
Which of the following is a stakeholder? - ANSWER anyone who has claim to the
company; an employee, a lender, the IRS
The cash remaining with the firm after paying its operating expenses, making payments
to creditors, and taxes is called - ANSWER residual cash flows
The capital budgeting decision process addresses - ANSWER which productive assets a
firm should purchase
which productive assets a firm should purchase - ANSWER Both Sole proprietorship and
General partnership
Which of the following owners is protected by limited liability? - ANSWER Owner of a
corporation
Which of the following reports directly to the owners of a firm? (Assume that the firm is
a public corporation.) - ANSWER Board of directors
One reason for the existence of agency problems between managers and stockholders is
that - ANSWER there is a significant degree of separation between management and
ownership
Who among the following is the principal in the agency relationship of a corporation? -
ANSWER stockholders
, A director who is not an employee of the firm is called - ANSWER an independent
director
Corruption in business - ANSWER creates inefficiencies in an economy,inhibits growth in
an economy,slows the rate of economic growth in a country
Which of the following is considered a hybrid organizational form? - ANSWER Limited
liability partnership
Which of the following is the advantage of the corporate form of organization? -
ANSWER Greater access to capital markets
Which of the following cannot be engaged in managing the business? - ANSWER A
limited partner
A financial system's primary concern is funneling money from - ANSWER lender-savers
to borrower-spenders
Which of the following is a process by which investment bankers purchase new
securities directly from the issuing company and resell them to the investors? - ANSWER
Underwriting
Stocks that are traded in the _____ are typically those of smaller and lesser known
firms. - ANSWER over-the-counter
Secondary financial markets are similar to: - ANSWER used-car markets
The ease with which a security can be sold and converted into cash is called - ANSWER
marketability
Correct | Verified Answers
Which of the following is a stakeholder? - ANSWER anyone who has claim to the
company; an employee, a lender, the IRS
The cash remaining with the firm after paying its operating expenses, making payments
to creditors, and taxes is called - ANSWER residual cash flows
The capital budgeting decision process addresses - ANSWER which productive assets a
firm should purchase
which productive assets a firm should purchase - ANSWER Both Sole proprietorship and
General partnership
Which of the following owners is protected by limited liability? - ANSWER Owner of a
corporation
Which of the following reports directly to the owners of a firm? (Assume that the firm is
a public corporation.) - ANSWER Board of directors
One reason for the existence of agency problems between managers and stockholders is
that - ANSWER there is a significant degree of separation between management and
ownership
Who among the following is the principal in the agency relationship of a corporation? -
ANSWER stockholders
, A director who is not an employee of the firm is called - ANSWER an independent
director
Corruption in business - ANSWER creates inefficiencies in an economy,inhibits growth in
an economy,slows the rate of economic growth in a country
Which of the following is considered a hybrid organizational form? - ANSWER Limited
liability partnership
Which of the following is the advantage of the corporate form of organization? -
ANSWER Greater access to capital markets
Which of the following cannot be engaged in managing the business? - ANSWER A
limited partner
A financial system's primary concern is funneling money from - ANSWER lender-savers
to borrower-spenders
Which of the following is a process by which investment bankers purchase new
securities directly from the issuing company and resell them to the investors? - ANSWER
Underwriting
Stocks that are traded in the _____ are typically those of smaller and lesser known
firms. - ANSWER over-the-counter
Secondary financial markets are similar to: - ANSWER used-car markets
The ease with which a security can be sold and converted into cash is called - ANSWER
marketability
