Test Bank
Financial Management: Core Concepts,
By Raymond Brooks, Jimmy Yang
5th Edition
1
Copyright © 2025 Pearson Education, Inc.
, Table Of Content
Part 1: Fundamental Concepts And Basic Tools Of Finance
1. Financial Management
2. Financial Statements
3. The Time Value Of Money (Part 1)
4. The Time Value Of Money (Part 2)
5. Interest Rates
Part 2: Valuing Stocks And Bonds And Understanding Risk And Return
6. Bonds And Bond Valuation
7. Stocks And Stock Valuation
8. Risk And Return
Part 3: Capital Budgeting
9. Capital Budgeting Decision Models
10. Cash Flow Estimation
11. The Cost Of Capital
Part 4: Financial Planning And Evaluating Performance
12. Forecasting And Short-Term Financial Planning
13. Working Capital Management
14. Financial Ratios And Firm Performance
Part 5: Other Selected Finance Topics
15. Raising Capital
16. Capital Structure
17. Dividends, Dividend Policy, And Stock Splits
18. International Financial Management
2
Copyright © 2025 Pearson Education, Inc.
,Test Bank For
Financial Management Core Concepts, 5th Edition Raymond Brooks Jimmy Yang
Chapter 1-18
Chapter 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 Answer: B
Diff: 1
Topic: 1.1 The Cycle Of Money Aacsb:
Analytical Thinking
Lo: 1.1 Describe The Cycle Of Money, The Participants In The Cycle, And The Common Objective
Of Borrowing And Lending.
2) Which Of The Following Is Not An Example Of A Financial Transaction?
A) Your Parents Use Their Credit Card To Pay For Your Current Term's College Tuition.
B) You Use The Atm At Heathrow Airport In London To Withdraw British Pounds.
C) Your Roommate Lends You $20 And You Repay It In One Week.
D) All Of The Above Are Financial
Transactions. Answer: D
Diff: 2
Topic: 1.1 The Cycle Of Money Aacsb:
Analytical Thinking
Lo: 1.1 Describe The Cycle Of Money, The Participants In The Cycle, And The Common Objective
Of Borrowing And Lending.
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 Answer:
C
Diff: 1
Topic: 1.1 The Cycle Of Money Aacsb:
Analytical Thinking
Lo: 1.1 Describe The Cycle Of Money, The Participants In The Cycle, And The Common Objective
Of Borrowing And Lending.
Hmwrk Questions: * Taken From "Prepping For Exams" Questions At The End Of The Chapter.
3
Copyright © 2025 Pearson Education, Inc.
, 4) The Common Objective Of Borrowing And Lending Is To .
A) Make All Parties Better Off
B) Gain A Profit At The Other's Expense
C) Make A Firm Or Individual Appear More Liquid Than Is Really The Case
D) Thwart Regulatory
Authority Answer: A
Diff: 1
Topic: 1.1 The Cycle Of Money Aacsb:
Analytical Thinking
Lo: 1.1 Describe The Cycle Of Money, The Participants In The Cycle, And The Common Objective
Of Borrowing And Lending.
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 Lender Will Not Repay
D) To Bear The Risk That The Borrower Will Not
Repay Answer: C
Diff: 1
Topic: 1.1 The Cycle Of Money Aacsb:
Analytical Thinking
Lo: 1.1 Describe The Cycle Of Money, The Participants In The Cycle, And The Common Objective
Of Borrowing And Lending.
6) Professor Gaston, Your History Teacher, Borrows Money At A Rate Of 6% Per Year From
The Valley State Bank For A Tuition Loan For Her Son. You Have $1,200 Deposited Into
Your Checking Account At The Same Bank Earning A Rate Of 0.5% Per Year. 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 Professor 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 Professor Is The Only Party To Be Made Worse Off By This Example Because She Is
The Only Party Paying Net Interest.
Answer: C
Explanation: Both You And Your Professor Are Using Services Typically Provided By Banks.
There Is No Conflict Of Interest.
Diff: 2
Topic: 1.1 The Cycle Of Money Aacsb:
Analytical Thinking
Lo: 1.1 Describe The Cycle Of Money, The Participants In The Cycle, And The Common Objective
Of Borrowing And Lending.
4
Copyright © 2025 Pearson Education, Inc.
Financial Management: Core Concepts,
By Raymond Brooks, Jimmy Yang
5th Edition
1
Copyright © 2025 Pearson Education, Inc.
, Table Of Content
Part 1: Fundamental Concepts And Basic Tools Of Finance
1. Financial Management
2. Financial Statements
3. The Time Value Of Money (Part 1)
4. The Time Value Of Money (Part 2)
5. Interest Rates
Part 2: Valuing Stocks And Bonds And Understanding Risk And Return
6. Bonds And Bond Valuation
7. Stocks And Stock Valuation
8. Risk And Return
Part 3: Capital Budgeting
9. Capital Budgeting Decision Models
10. Cash Flow Estimation
11. The Cost Of Capital
Part 4: Financial Planning And Evaluating Performance
12. Forecasting And Short-Term Financial Planning
13. Working Capital Management
14. Financial Ratios And Firm Performance
Part 5: Other Selected Finance Topics
15. Raising Capital
16. Capital Structure
17. Dividends, Dividend Policy, And Stock Splits
18. International Financial Management
2
Copyright © 2025 Pearson Education, Inc.
,Test Bank For
Financial Management Core Concepts, 5th Edition Raymond Brooks Jimmy Yang
Chapter 1-18
Chapter 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 Answer: B
Diff: 1
Topic: 1.1 The Cycle Of Money Aacsb:
Analytical Thinking
Lo: 1.1 Describe The Cycle Of Money, The Participants In The Cycle, And The Common Objective
Of Borrowing And Lending.
2) Which Of The Following Is Not An Example Of A Financial Transaction?
A) Your Parents Use Their Credit Card To Pay For Your Current Term's College Tuition.
B) You Use The Atm At Heathrow Airport In London To Withdraw British Pounds.
C) Your Roommate Lends You $20 And You Repay It In One Week.
D) All Of The Above Are Financial
Transactions. Answer: D
Diff: 2
Topic: 1.1 The Cycle Of Money Aacsb:
Analytical Thinking
Lo: 1.1 Describe The Cycle Of Money, The Participants In The Cycle, And The Common Objective
Of Borrowing And Lending.
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 Answer:
C
Diff: 1
Topic: 1.1 The Cycle Of Money Aacsb:
Analytical Thinking
Lo: 1.1 Describe The Cycle Of Money, The Participants In The Cycle, And The Common Objective
Of Borrowing And Lending.
Hmwrk Questions: * Taken From "Prepping For Exams" Questions At The End Of The Chapter.
3
Copyright © 2025 Pearson Education, Inc.
, 4) The Common Objective Of Borrowing And Lending Is To .
A) Make All Parties Better Off
B) Gain A Profit At The Other's Expense
C) Make A Firm Or Individual Appear More Liquid Than Is Really The Case
D) Thwart Regulatory
Authority Answer: A
Diff: 1
Topic: 1.1 The Cycle Of Money Aacsb:
Analytical Thinking
Lo: 1.1 Describe The Cycle Of Money, The Participants In The Cycle, And The Common Objective
Of Borrowing And Lending.
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 Lender Will Not Repay
D) To Bear The Risk That The Borrower Will Not
Repay Answer: C
Diff: 1
Topic: 1.1 The Cycle Of Money Aacsb:
Analytical Thinking
Lo: 1.1 Describe The Cycle Of Money, The Participants In The Cycle, And The Common Objective
Of Borrowing And Lending.
6) Professor Gaston, Your History Teacher, Borrows Money At A Rate Of 6% Per Year From
The Valley State Bank For A Tuition Loan For Her Son. You Have $1,200 Deposited Into
Your Checking Account At The Same Bank Earning A Rate Of 0.5% Per Year. 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 Professor 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 Professor Is The Only Party To Be Made Worse Off By This Example Because She Is
The Only Party Paying Net Interest.
Answer: C
Explanation: Both You And Your Professor Are Using Services Typically Provided By Banks.
There Is No Conflict Of Interest.
Diff: 2
Topic: 1.1 The Cycle Of Money Aacsb:
Analytical Thinking
Lo: 1.1 Describe The Cycle Of Money, The Participants In The Cycle, And The Common Objective
Of Borrowing And Lending.
4
Copyright © 2025 Pearson Education, Inc.
