FIN 300 Exam 1 2026 Questions and
Answers
planning, allocation of capital within a firm - Correct answer-Corporate finance
Economics, valuation (accounting)
-(stocks, bonds, derivatives, etc.) - Correct answer-Investments
What are the different areas of study in finance? - Correct answer--corporate
finance
-investments
-banking and financial markets
-real estate finance
How do companies and the stock market work? - Correct answer-A finance tenet
based on lessons from the financial markets: risk-return trade-off
-the greater the risk, the greater the return (reward)
The standard method for solving the problems encountered in raising capital -
Correct answer-The corporate form of business
©C0PYRIGHT 2025, ALL RIGHTS RESERVED 1
, -sole proprietorship, partnerships, corporation
Easy to set up; popular for new business
-limitation: only one owner; unlimited personal liability - Correct answer-Sole
proprietorship
Agreement can provide alternatives to liquidation
-general partners run the business and have unlimited liability - Correct answer-
Partnerships
A legal "person" distinct from owners
-account for the majority (85%) of business revenue in the economy - Correct
answer-Corporations
What are the advantages of a corporation? - Correct answer-Limited liability
Unlimited life
Separation of ownership and management
Easier Transfer of ownership (buy/sell stock)
Easier to raise capital
What are the disadvantages of corporations? - Correct answer-Double taxation
(income taxed at the corporate rate and then dividends taxed at the personal rate)
©C0PYRIGHT 2025, ALL RIGHTS RESERVED 2
Answers
planning, allocation of capital within a firm - Correct answer-Corporate finance
Economics, valuation (accounting)
-(stocks, bonds, derivatives, etc.) - Correct answer-Investments
What are the different areas of study in finance? - Correct answer--corporate
finance
-investments
-banking and financial markets
-real estate finance
How do companies and the stock market work? - Correct answer-A finance tenet
based on lessons from the financial markets: risk-return trade-off
-the greater the risk, the greater the return (reward)
The standard method for solving the problems encountered in raising capital -
Correct answer-The corporate form of business
©C0PYRIGHT 2025, ALL RIGHTS RESERVED 1
, -sole proprietorship, partnerships, corporation
Easy to set up; popular for new business
-limitation: only one owner; unlimited personal liability - Correct answer-Sole
proprietorship
Agreement can provide alternatives to liquidation
-general partners run the business and have unlimited liability - Correct answer-
Partnerships
A legal "person" distinct from owners
-account for the majority (85%) of business revenue in the economy - Correct
answer-Corporations
What are the advantages of a corporation? - Correct answer-Limited liability
Unlimited life
Separation of ownership and management
Easier Transfer of ownership (buy/sell stock)
Easier to raise capital
What are the disadvantages of corporations? - Correct answer-Double taxation
(income taxed at the corporate rate and then dividends taxed at the personal rate)
©C0PYRIGHT 2025, ALL RIGHTS RESERVED 2
