TESTBANK
TEST BANK For Foundations of Financial Management,
18th Edition by Stanley Block, Geoffrey Hirt, Bartley
Danielsen| Verified Chapter's 1 - 21 | Complete Newest
Version
,TESTBANK
Foundations of Financial Management, 18e (Block)
Chapter 1 The Goals and Activities of Financial Management
1) As finance emerged as a new field, much emphasis was placed on mergers and acquisitions.
Answer: TRUE Difficulty: 1 Easy
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
Bloom's: Remember AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
2) Inflation is assumed to be a temporary problem that does not affect financial decisions.
Answer: FALSE Difficulty: 1 Easy
Topic: Financial management decisions
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
Bloom's: Remember AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
3) Financial capital is composed of long-term plant and equipment, as well as other tangible investments.
Answer: FALSE Difficulty: 1 Easy
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
Bloom's: Remember AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
,TESTBANK
4) Real capital is composed of long-term plant and equipment.
Answer: TRUE Difficulty: 1 Easy
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
Bloom's: Remember
AACSB: Reflective Thinking Accessibility: Keyboard Navigation
5) During the 1930s, financial practice revolved around such topics as the preservation of capital,
maintenance of liquidity, the reorganization of financially troubled corporations, and bankruptcy.
Answer: TRUE Difficulty: 1 Easy
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
Bloom's: Remember AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
6) In the mid 1950s, finance began to change to a more analytical, decision-oriented approach.
Answer: TRUE Difficulty: 1 Easy
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
Bloom's: Remember AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
7) Recently, the emphasis of financial management has been on the relationship between risk and return.
, TESTBANK
Answer: TRUE Difficulty: 1 Easy
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a number of
other areas.; 01-03 The relationship of risk to return is a central focus of finance. Bloom's: Understand
AACSB: Analytical Thinking Accessibility: Keyboard Navigation
8) The first Nobel Prizes given to finance professors were for their contributions to capital structure theory
and portfolio theories of risk and return.
Answer: TRUE Difficulty: 1 Easy
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
Bloom's: Remember
AACSB: Reflective Thinking Accessibility: Keyboard Navigation
9) How investors handle risk is an important topic that usually only economists observe.
Answer: FALSE
Explanation: Behavioral finance is something that the finance industry puts heavy emphasis on. Difficulty: 1
Easy
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
Bloom's: Remember AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
10) Mortgage-backed securities were devalued by accounting standards because of the high credit ratings
(AAA).
TEST BANK For Foundations of Financial Management,
18th Edition by Stanley Block, Geoffrey Hirt, Bartley
Danielsen| Verified Chapter's 1 - 21 | Complete Newest
Version
,TESTBANK
Foundations of Financial Management, 18e (Block)
Chapter 1 The Goals and Activities of Financial Management
1) As finance emerged as a new field, much emphasis was placed on mergers and acquisitions.
Answer: TRUE Difficulty: 1 Easy
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
Bloom's: Remember AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
2) Inflation is assumed to be a temporary problem that does not affect financial decisions.
Answer: FALSE Difficulty: 1 Easy
Topic: Financial management decisions
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
Bloom's: Remember AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
3) Financial capital is composed of long-term plant and equipment, as well as other tangible investments.
Answer: FALSE Difficulty: 1 Easy
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
Bloom's: Remember AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
,TESTBANK
4) Real capital is composed of long-term plant and equipment.
Answer: TRUE Difficulty: 1 Easy
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
Bloom's: Remember
AACSB: Reflective Thinking Accessibility: Keyboard Navigation
5) During the 1930s, financial practice revolved around such topics as the preservation of capital,
maintenance of liquidity, the reorganization of financially troubled corporations, and bankruptcy.
Answer: TRUE Difficulty: 1 Easy
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
Bloom's: Remember AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
6) In the mid 1950s, finance began to change to a more analytical, decision-oriented approach.
Answer: TRUE Difficulty: 1 Easy
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
Bloom's: Remember AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
7) Recently, the emphasis of financial management has been on the relationship between risk and return.
, TESTBANK
Answer: TRUE Difficulty: 1 Easy
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a number of
other areas.; 01-03 The relationship of risk to return is a central focus of finance. Bloom's: Understand
AACSB: Analytical Thinking Accessibility: Keyboard Navigation
8) The first Nobel Prizes given to finance professors were for their contributions to capital structure theory
and portfolio theories of risk and return.
Answer: TRUE Difficulty: 1 Easy
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
Bloom's: Remember
AACSB: Reflective Thinking Accessibility: Keyboard Navigation
9) How investors handle risk is an important topic that usually only economists observe.
Answer: FALSE
Explanation: Behavioral finance is something that the finance industry puts heavy emphasis on. Difficulty: 1
Easy
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
Bloom's: Remember AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
10) Mortgage-backed securities were devalued by accounting standards because of the high credit ratings
(AAA).
