Finance 3100 Exam 1 Question and
Answers Review 100% Solved
A general partnership - ANSWER-Each partner can be responsible for 100 percent of
the partnership debts regardless of his ownership, receives only a proportionate share
of the profits, and creditors can go after anyone of the partners to seek payment
A limited partnership - ANSWER-Can sell his or her interest without dissolving the
partnership and is not involved in the day to day operations of the partnership
A sole proprietor - ANSWER-Assumes personal liability for all the debts of the business
Activities of financial institutions and markets - ANSWER-Bringing together buyers and
sellers of financial assets and providing a market for the transaction of financial assets
Any situation where a potential conflict can arise between the firm's owners and its
managers is referred to as - ANSWER-Agency problem
Capital budgeting includes the evaluation of - ANSWER-Size, timing, and risk of future
cash flows
Net working capital includes - ANSWER-Accounts receivable and cash
Options are bought and sold in _____ markets - ANSWER-Derivatives
Regarding partnership liability and taxes - ANSWER-Income generated is taxed only
once at the partners level and they generally have an unlimited liability
Stock trades between existing shareholders are - ANSWER-Secondary market
transactions
The agency problem arises mostly in situations where there is a separation of -
ANSWER-Company ownership and company management
The area of finance concerned with the activities of buying and selling financial assets
such as stocks and mutual funds is - ANSWER-Investments
The business entity that is regarded as a legal person - ANSWER-Corporation
The control of a corporation ultimately lies with the - ANSWER-Company shareholders
The major advantage of being a limited partner in a limited partnership is the ability to -
ANSWER-Invest in a partnership while limiting your loses to the amount you invested
Answers Review 100% Solved
A general partnership - ANSWER-Each partner can be responsible for 100 percent of
the partnership debts regardless of his ownership, receives only a proportionate share
of the profits, and creditors can go after anyone of the partners to seek payment
A limited partnership - ANSWER-Can sell his or her interest without dissolving the
partnership and is not involved in the day to day operations of the partnership
A sole proprietor - ANSWER-Assumes personal liability for all the debts of the business
Activities of financial institutions and markets - ANSWER-Bringing together buyers and
sellers of financial assets and providing a market for the transaction of financial assets
Any situation where a potential conflict can arise between the firm's owners and its
managers is referred to as - ANSWER-Agency problem
Capital budgeting includes the evaluation of - ANSWER-Size, timing, and risk of future
cash flows
Net working capital includes - ANSWER-Accounts receivable and cash
Options are bought and sold in _____ markets - ANSWER-Derivatives
Regarding partnership liability and taxes - ANSWER-Income generated is taxed only
once at the partners level and they generally have an unlimited liability
Stock trades between existing shareholders are - ANSWER-Secondary market
transactions
The agency problem arises mostly in situations where there is a separation of -
ANSWER-Company ownership and company management
The area of finance concerned with the activities of buying and selling financial assets
such as stocks and mutual funds is - ANSWER-Investments
The business entity that is regarded as a legal person - ANSWER-Corporation
The control of a corporation ultimately lies with the - ANSWER-Company shareholders
The major advantage of being a limited partner in a limited partnership is the ability to -
ANSWER-Invest in a partnership while limiting your loses to the amount you invested
