[Foundation Of Financial Management ,13e,block] Test Bank: Your Study Companion

True / False Questions


1. As finance emerged as a new field, much emphasis was placed on mergers and
acquisitions.
TRUE




Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 1




2. Inflation is assumed to be a temporary problem that does not affect financial decisions.
FALSE




Bloom's: Understanding
Difficulty: Easy
Learning Objective: 1




3. Financial Capital is composed of long-term plant and equipment, as well as other tangible
investments.
FALSE




Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 1

,4. Real Capital is composed of long-term plant and equipment.
TRUE




Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 1

,5. During the 1930s, financial practice revolved around such topics as the preservation of
capital, maintenance of liquidity, reorganization of financially troubled corporations and
bankruptcy.
TRUE




Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 1




6. In the mid 1950s, finance began to change to a more analytical, decision-oriented
approach.
TRUE




Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 1




7. Recently, the emphasis of financial management has been on the relationship between
risk and return.
TRUE




Bloom's: Understanding
Difficulty: Medium
Learning Objective: 1
Learning Objective: 3

, 8. The first Nobel Prizes given to finance professors were for their contributions to capital
structure theory and portfolio theories of risk and return.
TRUE




Bloom's: Knowledge
Difficulty: Easy
Learning Objective: 1