D076- ALL UNIT TESTS Questions and Answers 100% Pass

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 is the main objective of personal financial goals? - To maximize individual utility Which task does the financial manager of a firm perform that involves the issuance of new stocks and bonds? - Making financing decisions Why is understanding the definition of finance important in managing personal finances? - It helps individuals compare the costs and benefits of an action to determine whether to take that action. In which type of market would a company issue bonds or stocks for the first time? - Primary market Which type of financial institution is a mutual fund? - Investment institution Which financial institution specializes in managing and administering retirement funds? - Pension funds Which type of economic indicator is the consumer price index? - Lagging indicatorWhat does the term ethical refer to? - The accepted standards of conduct that guide a person's behavior 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 Which area of finance involves deciding which assets to invest in to create wealth in the future? - Investments What is the main goal of a firm? - To maximize owner wealth 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 Which type of financial market is where securities such as stocks and bonds are traded after their initial issuance? - The secondary financial market What type of financial institution is an insurance company? - Contractual Which financial institution invests funds contributed by a company to provide retirement funds for the company's employees? - Pension fund Personal income is which type of economic indicator? - CoincidentWhich term refers to something that conforms with accepted standards of conduct that guide a person's behavior? - Ethical What is the second step in finding a solution to an ethical dilemma? - Consider alternative courses of action Which type of interest rate includes interest on interest in addition to interest on the principal? - Compound interest How can agency problems be reduced through corporate control? - Executive compensation What is the rate at which the average price level of particular goods and services in an economy increases over a period of time? - Inflation rate You signed an apartment contract today. You are going to pay $1,500 at the beginning of each month for the next 12 months, starting today. What type of cash flows is this contract? - An annuity due What is the term for the return over the entire period that an investor owns a financial security? - Holding period return What is used to measure total risk? - Standard deviationWhat is the term for the risk that changes in interest rates will impa