FNAN 522 EXAM STUDY GUIDE UPDATED
ACTUAL QUESTIONS AND CORRECT
ANSWERS
◉ c. A government bond that matures in four months
Answer: Which of the following is NOT a cash equivalent?
a. A banknote
b. Preferred stock that will be redeemed in a month
c. A government bond that matures in four months.
d. A treasury bill that matures in two months
◉ d. All of these answers
Answer: Which of the following occurred during the financial
crisis of 2007-08?
a. Several major institutions failed or were subject to government
takeover.
b. Significant declines in consumer wealth and prolonged
unemployment.
c. A currency crisis, with investors transferring their wealth to
countries with stronger currencies.
d. All of these answers
,◉ d. The idea of maximizing market value is related to the idea of
maximizing shareholder value.
Answer: Which of the following statements regarding shareholder
and market value is correct?
a. Market value is the price at which a shareholder is willing to
sell.
b. Short-term focus on shareholder value is never detrimental to
long-term shareholder value.
c. All of these answers.
d. The idea of maximizing market value is related to the idea of
maximizing shareholder value.
◉ b. All of these answers.
Answer: How is finance used in organizations?
a. To maximize shareholder value.
b. All of these answers.
c. To ensure that money is at the right place at the right time.
d. To choose between different potential investments.
◉ b. limited liability
Answer: Which of the following terms describes the protection of
personal assets stemming from the corporate structure?
, a. simple transference
b. limited liability
c. articles of incorporation
d. double taxation
◉ c. All of these answers
Answer: Which of the following is a factor that contributes to the
conflict of interest between a company's bondholders and its
shareholders?
a. Shareholders are only paid if the company makes a profit,
bondholders are paid regardless.
b. Shareholders generally want the company to pursue riskier
projects; bondholders do not.
c. All of these answers
d. Shareholders have a vote in how the company conducts its
business; bondholders generally do not.
◉ b. There must be at least two business owners.
Answer: Which of the following is a legal characteristic of a
general partnership?
a. Partners are not personally liable for the business's debts and
obligations.
ACTUAL QUESTIONS AND CORRECT
ANSWERS
◉ c. A government bond that matures in four months
Answer: Which of the following is NOT a cash equivalent?
a. A banknote
b. Preferred stock that will be redeemed in a month
c. A government bond that matures in four months.
d. A treasury bill that matures in two months
◉ d. All of these answers
Answer: Which of the following occurred during the financial
crisis of 2007-08?
a. Several major institutions failed or were subject to government
takeover.
b. Significant declines in consumer wealth and prolonged
unemployment.
c. A currency crisis, with investors transferring their wealth to
countries with stronger currencies.
d. All of these answers
,◉ d. The idea of maximizing market value is related to the idea of
maximizing shareholder value.
Answer: Which of the following statements regarding shareholder
and market value is correct?
a. Market value is the price at which a shareholder is willing to
sell.
b. Short-term focus on shareholder value is never detrimental to
long-term shareholder value.
c. All of these answers.
d. The idea of maximizing market value is related to the idea of
maximizing shareholder value.
◉ b. All of these answers.
Answer: How is finance used in organizations?
a. To maximize shareholder value.
b. All of these answers.
c. To ensure that money is at the right place at the right time.
d. To choose between different potential investments.
◉ b. limited liability
Answer: Which of the following terms describes the protection of
personal assets stemming from the corporate structure?
, a. simple transference
b. limited liability
c. articles of incorporation
d. double taxation
◉ c. All of these answers
Answer: Which of the following is a factor that contributes to the
conflict of interest between a company's bondholders and its
shareholders?
a. Shareholders are only paid if the company makes a profit,
bondholders are paid regardless.
b. Shareholders generally want the company to pursue riskier
projects; bondholders do not.
c. All of these answers
d. Shareholders have a vote in how the company conducts its
business; bondholders generally do not.
◉ b. There must be at least two business owners.
Answer: Which of the following is a legal characteristic of a
general partnership?
a. Partners are not personally liable for the business's debts and
obligations.
