,TEST BANK FOR h h
Finance Applications and Theory 6e Cornett
h h h h h
Chapter 1-20 Answers are at the end of Each chapter
h h h h h h h h h
Chapter 1 h
Student name: h
Which statements(s) is/are true for successful application of financial theories?
h h h h h h h h h
The economy will be more productive.
h h h h h
Individual’s wealth will grow. h h h
The economy will be more productive and individual's wealth will grow.
h h h h h h h h h h
None of these choices are correct.
h h h h h
Not all cash a company generates will be returned to the investors. Which of the following will
h h h h h h h h h h h h h h h h
hNOT reduce the amount of capital returned to the investors?
h h h h h h h h h
retained earnings h
taxes
dividends
This subarea of finance involves methods and techniques to make appropriate decisions about
h h h h h h h h h h h h
hwhat kinds of securities to own, which firms' securities to buy, and how to be paid back in the
h h h h h h h h h h h h h h h h h h
hform that the investor wishes.
h h h h
real markets h
investments
financial management h
This subarea of finance looks at firm decisions in acquiring and utilizing cash received from
h h h h h h h h h h h h h h
hinvestors or from retained earnings.
h h h h
investments
financial management h
financial institutions and markets h h h
,Financial management involves decisions about which of the following?
h h h h h h h h
Which projects to fund h h h
How to minimize taxation h h h
What type of capital should be raised
h h h h h h
All of these choices are correct.
h h h h h
This subarea of finance helps facilitate the capital flows between investors and companies.
h h h h h h h h h h h h
investments
financial management h
treasury management h
financial institutions and markets h h h
This subarea of finance is important for adapting to the global economy.
h h h h h h h h h h h
investments
financial management h
international finance h
financial institutions and markets h h h
A potential future negative impact to value and/or cash flows is often discussed in terms of
h h h h h h h h h h h h h h h
probability of loss and the expected magnitude of the loss. This is called
h h h h h h h h h h h h h
options.
standard deviation. h
coefficient of variation. h h
risk.
This is a term to describe non-physical assets like stocks and bonds that get their value from
h h h h h h h h h h h h h h h h
future cash flows.
h h h
investment
financial asset h
real asset h
financial markets h
, Which of the following is defined as a group of securities that exhibit similar characteristics,
h h h h h h h h h h h h h h
behave similarly in the marketplace, and are subject to the same laws and regulations?
h h h h h h h h h h h h h h
investments
asset classes h
market instruments h
financial markets h
The most commonly accepted groups of asset classes include all of the following except
h h h h h h h h h h h h h
stocks.
bonds.
machinery and equipment. h h
real estate. h
The h is the interest rate at which banks and other depository institutions lend
h h h h h h h h h h h
h reserve balances to one another overnight; this rate heavily influences other short-term rates.
h h h h h h h h h h h h
average tax rate h h
exchange rate h
federal funds rate h h
none of these choices are correct.
h h h h h
Which of the following statements regarding quantitative easing (QE) are true?
h h h h h h h h h h
QE is a monetary policy designed to increase the money supply in the economy
h h h h h h h h h h h h h
through buying securities in the market and lowering short-term interest rates.
h h h h h h h h h h h
The first round of QE involved the Fed to purchase potentially toxic mortgage-backed
h h h h h h h h h h h h
securities from banks.
h h h
During early 2020 due to the COVID-19 pandemic, the Fed dropped the federal funds rate
h h h h h h h h h h h h h h
to 1.25% and then again 0.25 a few months later.
h h h h h h h h h h
All of these choices are correct.
h h h h h
Which of the following is the firm's highest-level financial manager?
h h h h h h h h h
chief executive officer
h h
chief financial officer
h h
board of directors h h
corporate governance h
Finance Applications and Theory 6e Cornett
h h h h h
Chapter 1-20 Answers are at the end of Each chapter
h h h h h h h h h
Chapter 1 h
Student name: h
Which statements(s) is/are true for successful application of financial theories?
h h h h h h h h h
The economy will be more productive.
h h h h h
Individual’s wealth will grow. h h h
The economy will be more productive and individual's wealth will grow.
h h h h h h h h h h
None of these choices are correct.
h h h h h
Not all cash a company generates will be returned to the investors. Which of the following will
h h h h h h h h h h h h h h h h
hNOT reduce the amount of capital returned to the investors?
h h h h h h h h h
retained earnings h
taxes
dividends
This subarea of finance involves methods and techniques to make appropriate decisions about
h h h h h h h h h h h h
hwhat kinds of securities to own, which firms' securities to buy, and how to be paid back in the
h h h h h h h h h h h h h h h h h h
hform that the investor wishes.
h h h h
real markets h
investments
financial management h
This subarea of finance looks at firm decisions in acquiring and utilizing cash received from
h h h h h h h h h h h h h h
hinvestors or from retained earnings.
h h h h
investments
financial management h
financial institutions and markets h h h
,Financial management involves decisions about which of the following?
h h h h h h h h
Which projects to fund h h h
How to minimize taxation h h h
What type of capital should be raised
h h h h h h
All of these choices are correct.
h h h h h
This subarea of finance helps facilitate the capital flows between investors and companies.
h h h h h h h h h h h h
investments
financial management h
treasury management h
financial institutions and markets h h h
This subarea of finance is important for adapting to the global economy.
h h h h h h h h h h h
investments
financial management h
international finance h
financial institutions and markets h h h
A potential future negative impact to value and/or cash flows is often discussed in terms of
h h h h h h h h h h h h h h h
probability of loss and the expected magnitude of the loss. This is called
h h h h h h h h h h h h h
options.
standard deviation. h
coefficient of variation. h h
risk.
This is a term to describe non-physical assets like stocks and bonds that get their value from
h h h h h h h h h h h h h h h h
future cash flows.
h h h
investment
financial asset h
real asset h
financial markets h
, Which of the following is defined as a group of securities that exhibit similar characteristics,
h h h h h h h h h h h h h h
behave similarly in the marketplace, and are subject to the same laws and regulations?
h h h h h h h h h h h h h h
investments
asset classes h
market instruments h
financial markets h
The most commonly accepted groups of asset classes include all of the following except
h h h h h h h h h h h h h
stocks.
bonds.
machinery and equipment. h h
real estate. h
The h is the interest rate at which banks and other depository institutions lend
h h h h h h h h h h h
h reserve balances to one another overnight; this rate heavily influences other short-term rates.
h h h h h h h h h h h h
average tax rate h h
exchange rate h
federal funds rate h h
none of these choices are correct.
h h h h h
Which of the following statements regarding quantitative easing (QE) are true?
h h h h h h h h h h
QE is a monetary policy designed to increase the money supply in the economy
h h h h h h h h h h h h h
through buying securities in the market and lowering short-term interest rates.
h h h h h h h h h h h
The first round of QE involved the Fed to purchase potentially toxic mortgage-backed
h h h h h h h h h h h h
securities from banks.
h h h
During early 2020 due to the COVID-19 pandemic, the Fed dropped the federal funds rate
h h h h h h h h h h h h h h
to 1.25% and then again 0.25 a few months later.
h h h h h h h h h h
All of these choices are correct.
h h h h h
Which of the following is the firm's highest-level financial manager?
h h h h h h h h h
chief executive officer
h h
chief financial officer
h h
board of directors h h
corporate governance h
