Test Bank For
Foundations Of Financial Management,
18th Edition By Stanley Block, Geoffrey Hirt,
,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
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.
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).
Answer: False
Explanation: These Securities Were Devalued Because Borrowers Defaulted On Their Loans
And Didn't Have The Financial Means To Back Up Their Loans In Other Ways.
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
11) "Credit Default Swaps" Are One Of Several Tools That Congress And The President Of The
United States Have Jointly Developed To Ease The Financial Crisis That Began In 2008.
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: Understand Aacsb:
Analytical Thinking
Accessibility: Keyboard Navigation
Foundations Of Financial Management,
18th Edition By Stanley Block, Geoffrey Hirt,
,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
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.
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).
Answer: False
Explanation: These Securities Were Devalued Because Borrowers Defaulted On Their Loans
And Didn't Have The Financial Means To Back Up Their Loans In Other Ways.
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
11) "Credit Default Swaps" Are One Of Several Tools That Congress And The President Of The
United States Have Jointly Developed To Ease The Financial Crisis That Began In 2008.
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: Understand Aacsb:
Analytical Thinking
Accessibility: Keyboard Navigation
