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C201 BUSINESS ACUMEN ACTUAL EXAM
COMPLETE 210 QUESTIONS AND CORRECT
DETAILED ANSWERS (VERIFIED ANSWERS)
|ALREADY GRADED A+
Which three sources should a business consider when seeking a
long-term funding source? Choose 3 answers
A. Venture capital
B. Public sale of stocks
C. Commercial paper
D. Hedge funds
E. Trade credit - ANSWER ✔✔- A. Venture capital
B. Public sale of stocks
D. Hedge funds
In which type of security should a business invest its excess cash
in anticipation of paying off the current year's tax liability?
A. Commercial paper
B. Preferred stock
C. Municipal bonds
D. Common stock - ANSWER ✔✔- A. Commercial paper
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Which role does the underwriter play in financing business
operations when using the capital market to sell securities to the
public?
A. It insures the value of the security to the investor.
B. It determines the qualifications of an investor to securities
from the issuer.
C. It arranges financing for the issuer to support the initial public
offering.
D. It assumes the risk of the assessed value of the security from
the issuer. - ANSWER ✔✔- D. It assumes the risk of the assessed
value of the security from the issuer.
Why should a manager use financial controls in a firm's financial
plan?
A. To prevent unauthorized expenditures in variance with the
financial plan
B. To pace the inflow of revenue and outflow of expenses
C. To determine the accuracy of forecasted revenues, costs, and
expenses
D. To identify and incorporate unanticipated costs related to
business operations - ANSWER ✔✔- C. To determine the accuracy
of forecasted revenues, costs, and expenses
What does a CFO use in financial planning to determine the
expected level of revenue for future periods?
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A. Revenue projections based on historical performance
B. Expenditure rate based on current revenue
C. Cash sales forecast
D. Sales forecast plus non-sales revenue - ANSWER ✔✔- D. Sales
forecast plus non-sales revenue
How did the Dodd-Frank Wall Street Reform and Consumer
Protection Act impact retailers?
A. It capped the liability of consumers for credit card fraud at
$100.
B. It enabled retailers to seek reimbursement for fraudulent
credit card charges.
C. It capped the debit card swipe fee at 21 cents.
D. It allowed banks to levy the debit card swipe fee on
cardholders. - ANSWER ✔✔- C. It capped the debit card swipe fee
at 21 cents.
Which two activities are prohibited by insider trading laws and
should be avoided by a firm's employees? Choose 2 answers
A. Unloading company stock because the employee has observed
the company's lax quality control process
B. Buying stock in the public company for which the employee
works based on a conversation the employee overheard at a
cocktail party between two of the company's executives
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C. Selling company stock because a co-worker told the employee
the company's new drug is failing in clinical trial
D. Buying stock in a public company based a Fortune article
mentioning a possible hostile takeover bid by its largest
competitor - ANSWER ✔✔- B. Buying stock in the public company
for which the employee works based on a conversation the
employee overheard at a cocktail party between two of the
company's executives
C. Selling company stock because a co-worker told the employee
the company's new drug is failing in clinical trial
Which two risks does a firm face by funding the purchase of long-
term assets with short-term funding sources? Choose 2 answers
A. Volatility of interest rates
B. Faster depreciation of long-term assets
C. Negative credit rating
D. Frequent renewals - ANSWER ✔✔- A. Volatility of interest rates
D. Frequent renewals
Which funding source should a firm use if it wishes to secure
long-term financing while retaining all of its equity?
A. Venture capital
B. Public stock sale
C. Long-term commercial bank loan
C201 BUSINESS ACUMEN ACTUAL EXAM
COMPLETE 210 QUESTIONS AND CORRECT
DETAILED ANSWERS (VERIFIED ANSWERS)
|ALREADY GRADED A+
Which three sources should a business consider when seeking a
long-term funding source? Choose 3 answers
A. Venture capital
B. Public sale of stocks
C. Commercial paper
D. Hedge funds
E. Trade credit - ANSWER ✔✔- A. Venture capital
B. Public sale of stocks
D. Hedge funds
In which type of security should a business invest its excess cash
in anticipation of paying off the current year's tax liability?
A. Commercial paper
B. Preferred stock
C. Municipal bonds
D. Common stock - ANSWER ✔✔- A. Commercial paper
,2|Page
Which role does the underwriter play in financing business
operations when using the capital market to sell securities to the
public?
A. It insures the value of the security to the investor.
B. It determines the qualifications of an investor to securities
from the issuer.
C. It arranges financing for the issuer to support the initial public
offering.
D. It assumes the risk of the assessed value of the security from
the issuer. - ANSWER ✔✔- D. It assumes the risk of the assessed
value of the security from the issuer.
Why should a manager use financial controls in a firm's financial
plan?
A. To prevent unauthorized expenditures in variance with the
financial plan
B. To pace the inflow of revenue and outflow of expenses
C. To determine the accuracy of forecasted revenues, costs, and
expenses
D. To identify and incorporate unanticipated costs related to
business operations - ANSWER ✔✔- C. To determine the accuracy
of forecasted revenues, costs, and expenses
What does a CFO use in financial planning to determine the
expected level of revenue for future periods?
,3|Page
A. Revenue projections based on historical performance
B. Expenditure rate based on current revenue
C. Cash sales forecast
D. Sales forecast plus non-sales revenue - ANSWER ✔✔- D. Sales
forecast plus non-sales revenue
How did the Dodd-Frank Wall Street Reform and Consumer
Protection Act impact retailers?
A. It capped the liability of consumers for credit card fraud at
$100.
B. It enabled retailers to seek reimbursement for fraudulent
credit card charges.
C. It capped the debit card swipe fee at 21 cents.
D. It allowed banks to levy the debit card swipe fee on
cardholders. - ANSWER ✔✔- C. It capped the debit card swipe fee
at 21 cents.
Which two activities are prohibited by insider trading laws and
should be avoided by a firm's employees? Choose 2 answers
A. Unloading company stock because the employee has observed
the company's lax quality control process
B. Buying stock in the public company for which the employee
works based on a conversation the employee overheard at a
cocktail party between two of the company's executives
, 4|Page
C. Selling company stock because a co-worker told the employee
the company's new drug is failing in clinical trial
D. Buying stock in a public company based a Fortune article
mentioning a possible hostile takeover bid by its largest
competitor - ANSWER ✔✔- B. Buying stock in the public company
for which the employee works based on a conversation the
employee overheard at a cocktail party between two of the
company's executives
C. Selling company stock because a co-worker told the employee
the company's new drug is failing in clinical trial
Which two risks does a firm face by funding the purchase of long-
term assets with short-term funding sources? Choose 2 answers
A. Volatility of interest rates
B. Faster depreciation of long-term assets
C. Negative credit rating
D. Frequent renewals - ANSWER ✔✔- A. Volatility of interest rates
D. Frequent renewals
Which funding source should a firm use if it wishes to secure
long-term financing while retaining all of its equity?
A. Venture capital
B. Public stock sale
C. Long-term commercial bank loan
