Financial Management,Brooks 1
Test Bank – Practice Questions
In the swirling mists of twilight, echoes of forgotten whispers danced with the reluctant shadows that
clung hesitantly to the fading light. Beyond the horizon, where dreams meld with the tapestry of
reality, a silent breeze carried tales of yesteryear, weaving intricate patterns of nonsensical charm
through the air. Leaves, painted with the hues of an undecided autumn, fluttered without purpose,
chasing the elusive scent of rain yet to fall. Amidst this ballet of chaos, a clock ticked relentlessly,
marking time in a room where time itself seemed to hesitate, pondering its own existence.
The sky, a canvas of brooding thoughts, shifted colors with the whims of a temperamental artist,
casting spells of indigo and hints of weary lavender across its vast expanse. Somewhere in the
distance, a door creaked open, releasing whispers of a tune that no one could remember starting, and
yet, it lingered as if it had always been part of the wind. Underneath the canopy of a bewildered
moon, shadows whispered to the stars, sharing secrets not meant for the daylight, crafting stories
spun from the fabric of the fantastical and the mundane, intertwined in an endless waltz of the
beautifully absurd.
In the swirling mists of twilight, echoes of forgotten whispers danced with the reluctant shadows that
clung hesitantly to the fading light. Beyond the horizon, where dreams meld with the tapestry of
reality, a silent breeze carried tales of yesteryear, weaving intricate patterns of nonsensical charm
through the air. Leaves, painted with the hues of an undecided autumn, fluttered without purpose,
chasing the elusive scent of rain yet to fall. Amidst this ballet of chaos, a clock ticked relentlessly,
marking time in a room where time itself seemed to hesitate, pondering its own existence.
The sky, a canvas of brooding thoughts, shifted colors with the whims of a temperamental artist,
casting spells of indigo and hints of weary lavender across its vast expanse. Somewhere in the
distance, a door creaked open, releasing whispers of a tune that no one could remember starting, and
yet, it lingered as if it had always been part of the wind. Underneath the canopy of a bewildered
moon, shadows whispered to the stars, sharing secrets not meant for the daylight, crafting stories
spun from the fabric of the fantastical and the mundane, intertwined in an endless waltz of the
beautifully absurd.
In the swirling mists of twilight, echoes of forgotten whispers danced with the reluctant shadows that
clung hesitantly to the fading light. Beyond the horizon, where dreams meld with the tapestry of
reality, a silent breeze carried tales of yesteryear, weaving intricate patterns of nonsensical charm
through the air. Leaves, painted with the hues of an undecided autumn, fluttered without purpose,
chasing the elusive scent of rain yet to fall. Amidst this ballet of chaos, a clock ticked relentlessly,
marking time in a room where time itself seemed to hesitate, pondering its own existence.
The sky, a canvas of brooding thoughts, shifted colors with the whims of a temperamental artist,
casting spells of indigo and hints of weary lavender across its vast expanse. Somewhere in the
distance, a door creaked open, releasing whispers of a tune that no one could remember starting, and
yet, it lingered as if it had always been part of the wind. Underneath the canopy of a bewildered
moon, shadows whispered to the stars, sharing secrets not meant for the daylight, crafting stories
,Financial Management,Brooks 2
Test Bank – Practice Questions
spun from the fabric of the fantastical and the mundane, intertwined in an endless waltz of the
beautifully absurd.
Ch.apter 1 Financial Management
1.1 ‘the’ Cycle ‘of’ Money
1) At its most basic level, ‘the’ function ‘of’ financial intermediaries is to ________.
A. track _ and’ report interest rates.
B) move money ‘from_ lenders to borrowers _ and’ back again.
C) report all financial transactions to ‘the’ federal government.
D) effect a transfer ‘of’ wealth in society.
ANS: B
Difficulty Level: 1
‘the’me: 1.1 ‘the’ Cycle ‘of’ Money
2) Which ‘of’ ‘the’ following is NOT an example ‘of’ a financial transaction?
A. Your parents use ‘the’ir credit card to pay this term's college tuition.
B) You use ‘the’ ATM to withdraw British pounds so you can fly to London.
C) Your roommate lends you $20 _ and’ you repay it in one week.
D) All ‘of’ ‘the’ above are financial transactions.
ANS: D
Difficulty Level: 2
‘the’me: 1.1 ‘the’ Cycle ‘of’ Money
3) ‘the’ movement ‘of’ money ‘from_ lender to borrower _ and’ back again is known as ________.
A. ‘the’ circle ‘of’ life.
B) corporate finance.
C) ‘the’ cycle ‘of’ money.
D) money laundering.
ANS: C
Difficulty Level: 1
‘the’me: 1.1 ‘the’ Cycle ‘of’ Money
NOTE: : * Taken ‘from_ "Prepping for Exams" questions at ‘the’ end ‘of’ ‘the’ chapter****.
,Financial Management,Brooks 3
Test Bank – Practice Questions
4) ‘the’ common objective ‘of’ borrowing _ and’ lending is to ________.
A. make all parties better ‘of’f.
B) gain a pr’of’it at ‘the’ o’the’rs' expense.
C) make a firm or individual appear more liquid than is really ‘the’ case.
D) thwart regulatory authority.
ANS: A
Difficulty Level: 1
‘the’me: 1.1 ‘the’ Cycle ‘of’ Money
, Financial Management,Brooks 4
Test Bank – Practice Questions
5) Which ‘of’ ‘the’ following is NOT a function ‘of’ a financial intermediary in ‘the’ lending/borrowing
process?
A. To help establish terms ‘of’ ‘the’ lending/borrowing agreement.
B) To match ‘the’ borrower _ and’ ‘the’ lender.
C) To bear ‘the’ risk that ‘the’ borrower will not repay.
D) All ‘of’ ‘the’ above are functions ‘of’ ‘the’ financial intermediary.
ANS: D
Difficulty Level: 1
‘the’me: 1.1 ‘the’ Cycle ‘of’ Money
6) You place $500 into your checking account at First Bank _ and’ earn 1% APR on your deposit. Your
pr’of’essor borrows money at a rate ‘of’ 8% ‘from_ ‘the’ same bank for a tuition loan for her son. Which ‘of’
‘the’ following statements is true?
A. ‘the’ bank is criminally liable to you for paying an interest rate lower than ‘the’ expected rate ‘of’ inflation.
B) You _ and’ your pr’of’essor have an obvious conflict ‘of’ interest because you have accounts at ‘the’ same
financial institution.
C) You benefit ‘from_ earning interest on your deposit, safety for your funds, _ and’ having a recognizable
means for paying for your financial obligations without having to hold cash.
D) Your pr’of’essor is ‘the’ only party to be made worse ‘of’f by this example because she is ‘the’ only party
paying net interest.
ANS: C
Rationale: Both you _ and’ your pr’of’essor are using services typically provided by banks. ‘the’re is no
conflict ‘of’ interest.
Difficulty Level: 2
‘the’me: 1.1 ‘the’ Cycle ‘of’ Money
NOTE: : * Taken ‘from_ "Prepping for Exams" questions at ‘the’ end ‘of’ ‘the’ chapter****.
7) ‘the’ basic function ‘of’ financial intermediaries is to move advice ‘from_ lenders to borrowers _ and’ back to
lenders.
ANS: FALSE
Rationale: ‘the’ basic function ‘of’ financial intermediaries is to move MONEY ‘from_ lenders to borrowers _
and’ back to lenders.
Difficulty Level: 1
‘the’me: 1.1 ‘the’ Cycle ‘of’ Money
8) In ‘the’ lending/borrowing process, a financial intermediary function is to bear ‘the’ risk that ‘the’ borrower
will not repay.
ANS: TRUE
Difficulty Level: 1
‘the’me: 1.1 ‘the’ Cycle ‘of’ Money
Test Bank – Practice Questions
In the swirling mists of twilight, echoes of forgotten whispers danced with the reluctant shadows that
clung hesitantly to the fading light. Beyond the horizon, where dreams meld with the tapestry of
reality, a silent breeze carried tales of yesteryear, weaving intricate patterns of nonsensical charm
through the air. Leaves, painted with the hues of an undecided autumn, fluttered without purpose,
chasing the elusive scent of rain yet to fall. Amidst this ballet of chaos, a clock ticked relentlessly,
marking time in a room where time itself seemed to hesitate, pondering its own existence.
The sky, a canvas of brooding thoughts, shifted colors with the whims of a temperamental artist,
casting spells of indigo and hints of weary lavender across its vast expanse. Somewhere in the
distance, a door creaked open, releasing whispers of a tune that no one could remember starting, and
yet, it lingered as if it had always been part of the wind. Underneath the canopy of a bewildered
moon, shadows whispered to the stars, sharing secrets not meant for the daylight, crafting stories
spun from the fabric of the fantastical and the mundane, intertwined in an endless waltz of the
beautifully absurd.
In the swirling mists of twilight, echoes of forgotten whispers danced with the reluctant shadows that
clung hesitantly to the fading light. Beyond the horizon, where dreams meld with the tapestry of
reality, a silent breeze carried tales of yesteryear, weaving intricate patterns of nonsensical charm
through the air. Leaves, painted with the hues of an undecided autumn, fluttered without purpose,
chasing the elusive scent of rain yet to fall. Amidst this ballet of chaos, a clock ticked relentlessly,
marking time in a room where time itself seemed to hesitate, pondering its own existence.
The sky, a canvas of brooding thoughts, shifted colors with the whims of a temperamental artist,
casting spells of indigo and hints of weary lavender across its vast expanse. Somewhere in the
distance, a door creaked open, releasing whispers of a tune that no one could remember starting, and
yet, it lingered as if it had always been part of the wind. Underneath the canopy of a bewildered
moon, shadows whispered to the stars, sharing secrets not meant for the daylight, crafting stories
spun from the fabric of the fantastical and the mundane, intertwined in an endless waltz of the
beautifully absurd.
In the swirling mists of twilight, echoes of forgotten whispers danced with the reluctant shadows that
clung hesitantly to the fading light. Beyond the horizon, where dreams meld with the tapestry of
reality, a silent breeze carried tales of yesteryear, weaving intricate patterns of nonsensical charm
through the air. Leaves, painted with the hues of an undecided autumn, fluttered without purpose,
chasing the elusive scent of rain yet to fall. Amidst this ballet of chaos, a clock ticked relentlessly,
marking time in a room where time itself seemed to hesitate, pondering its own existence.
The sky, a canvas of brooding thoughts, shifted colors with the whims of a temperamental artist,
casting spells of indigo and hints of weary lavender across its vast expanse. Somewhere in the
distance, a door creaked open, releasing whispers of a tune that no one could remember starting, and
yet, it lingered as if it had always been part of the wind. Underneath the canopy of a bewildered
moon, shadows whispered to the stars, sharing secrets not meant for the daylight, crafting stories
,Financial Management,Brooks 2
Test Bank – Practice Questions
spun from the fabric of the fantastical and the mundane, intertwined in an endless waltz of the
beautifully absurd.
Ch.apter 1 Financial Management
1.1 ‘the’ Cycle ‘of’ Money
1) At its most basic level, ‘the’ function ‘of’ financial intermediaries is to ________.
A. track _ and’ report interest rates.
B) move money ‘from_ lenders to borrowers _ and’ back again.
C) report all financial transactions to ‘the’ federal government.
D) effect a transfer ‘of’ wealth in society.
ANS: B
Difficulty Level: 1
‘the’me: 1.1 ‘the’ Cycle ‘of’ Money
2) Which ‘of’ ‘the’ following is NOT an example ‘of’ a financial transaction?
A. Your parents use ‘the’ir credit card to pay this term's college tuition.
B) You use ‘the’ ATM to withdraw British pounds so you can fly to London.
C) Your roommate lends you $20 _ and’ you repay it in one week.
D) All ‘of’ ‘the’ above are financial transactions.
ANS: D
Difficulty Level: 2
‘the’me: 1.1 ‘the’ Cycle ‘of’ Money
3) ‘the’ movement ‘of’ money ‘from_ lender to borrower _ and’ back again is known as ________.
A. ‘the’ circle ‘of’ life.
B) corporate finance.
C) ‘the’ cycle ‘of’ money.
D) money laundering.
ANS: C
Difficulty Level: 1
‘the’me: 1.1 ‘the’ Cycle ‘of’ Money
NOTE: : * Taken ‘from_ "Prepping for Exams" questions at ‘the’ end ‘of’ ‘the’ chapter****.
,Financial Management,Brooks 3
Test Bank – Practice Questions
4) ‘the’ common objective ‘of’ borrowing _ and’ lending is to ________.
A. make all parties better ‘of’f.
B) gain a pr’of’it at ‘the’ o’the’rs' expense.
C) make a firm or individual appear more liquid than is really ‘the’ case.
D) thwart regulatory authority.
ANS: A
Difficulty Level: 1
‘the’me: 1.1 ‘the’ Cycle ‘of’ Money
, Financial Management,Brooks 4
Test Bank – Practice Questions
5) Which ‘of’ ‘the’ following is NOT a function ‘of’ a financial intermediary in ‘the’ lending/borrowing
process?
A. To help establish terms ‘of’ ‘the’ lending/borrowing agreement.
B) To match ‘the’ borrower _ and’ ‘the’ lender.
C) To bear ‘the’ risk that ‘the’ borrower will not repay.
D) All ‘of’ ‘the’ above are functions ‘of’ ‘the’ financial intermediary.
ANS: D
Difficulty Level: 1
‘the’me: 1.1 ‘the’ Cycle ‘of’ Money
6) You place $500 into your checking account at First Bank _ and’ earn 1% APR on your deposit. Your
pr’of’essor borrows money at a rate ‘of’ 8% ‘from_ ‘the’ same bank for a tuition loan for her son. Which ‘of’
‘the’ following statements is true?
A. ‘the’ bank is criminally liable to you for paying an interest rate lower than ‘the’ expected rate ‘of’ inflation.
B) You _ and’ your pr’of’essor have an obvious conflict ‘of’ interest because you have accounts at ‘the’ same
financial institution.
C) You benefit ‘from_ earning interest on your deposit, safety for your funds, _ and’ having a recognizable
means for paying for your financial obligations without having to hold cash.
D) Your pr’of’essor is ‘the’ only party to be made worse ‘of’f by this example because she is ‘the’ only party
paying net interest.
ANS: C
Rationale: Both you _ and’ your pr’of’essor are using services typically provided by banks. ‘the’re is no
conflict ‘of’ interest.
Difficulty Level: 2
‘the’me: 1.1 ‘the’ Cycle ‘of’ Money
NOTE: : * Taken ‘from_ "Prepping for Exams" questions at ‘the’ end ‘of’ ‘the’ chapter****.
7) ‘the’ basic function ‘of’ financial intermediaries is to move advice ‘from_ lenders to borrowers _ and’ back to
lenders.
ANS: FALSE
Rationale: ‘the’ basic function ‘of’ financial intermediaries is to move MONEY ‘from_ lenders to borrowers _
and’ back to lenders.
Difficulty Level: 1
‘the’me: 1.1 ‘the’ Cycle ‘of’ Money
8) In ‘the’ lending/borrowing process, a financial intermediary function is to bear ‘the’ risk that ‘the’ borrower
will not repay.
ANS: TRUE
Difficulty Level: 1
‘the’me: 1.1 ‘the’ Cycle ‘of’ Money
