D076 Unit 2 financial management test
A company's officers and board of directors are selling their stocks in the firm at higher prices due to
false accounting reports that made the stock seem more valuable than it truly was. Which ethical issue is
occurring in this situation? -✔✔ Agency problem due to conflicting interests
How can agency problems be reduced through corporate control? -✔✔ Executive compensation
In which type of market would a company issue bonds or stocks for the first time? -✔✔ Primary market
Personal income is which type of economic indicator? -✔✔ Coincident
What are financial managers doing if they evaluate whether it is worth spending money on research and
development for a new product? -✔✔ Making an investment decision
What are the main services offered by financial institutions? -✔✔ Accepting a wide variety of deposits,
offering investment products, providing loans, and brokering financial transactions
What does the term ethical refer to? -✔✔ The accepted standards of conduct that guide a person's
behavior
What is the main goal of a firm? -✔✔ To maximize owner wealth
What is the main objective of personal financial goals? -✔✔ To maximize individual utility
What is the second step in finding a solution to an ethical dilemma? -✔✔ Consider alternative courses
of action
A company's officers and board of directors are selling their stocks in the firm at higher prices due to
false accounting reports that made the stock seem more valuable than it truly was. Which ethical issue is
occurring in this situation? -✔✔ Agency problem due to conflicting interests
How can agency problems be reduced through corporate control? -✔✔ Executive compensation
In which type of market would a company issue bonds or stocks for the first time? -✔✔ Primary market
Personal income is which type of economic indicator? -✔✔ Coincident
What are financial managers doing if they evaluate whether it is worth spending money on research and
development for a new product? -✔✔ Making an investment decision
What are the main services offered by financial institutions? -✔✔ Accepting a wide variety of deposits,
offering investment products, providing loans, and brokering financial transactions
What does the term ethical refer to? -✔✔ The accepted standards of conduct that guide a person's
behavior
What is the main goal of a firm? -✔✔ To maximize owner wealth
What is the main objective of personal financial goals? -✔✔ To maximize individual utility
What is the second step in finding a solution to an ethical dilemma? -✔✔ Consider alternative courses
of action
