,
,Test Bank for
Finance Applications and Theory 6e Cornett
Chapter 1-20 Answers are at the end of Each chapter
Chapter 1
Student name:__________
1) Which statements(s) is/are true for successful application of financial theories?
A) The economy will be more productive.
B) Individual’s wealth will grow.
C) The economy will be more productive and individual's wealth will grow.
D) None of these choices are correct.
2) Not all cash a company generates will be returned to the investors. Which of the following
will NOT reduce the amount of capital returned to the investors?
A) retained earnings
B) taxes
C) dividends
3) This subarea of finance involves methods and techniques to make appropriate decisions
about what kinds of securities to own, which firms' securities to buy, and how to be paid back
in the form that the investor wishes.
A) real markets
B) investments
C) financial management
4) This subarea of finance looks at firm decisions in acquiring and utilizing cash received from
investors or from retained earnings.
A) investments
B) financial management
C) financial institutions and markets
, 5) Financial management involves decisions about which of the following?
A) Which projects to fund
B) How to minimize taxation
C) What type of capital should be raised
D) All of these choices are correct.
6) This subarea of finance helps facilitate the capital flows between investors and companies.
A) investments
B) financial management
C) treasury management
D) financial institutions and markets
7) This subarea of finance is important for adapting to the global economy.
A) investments
B) financial management
C) international finance
D) financial institutions and markets
8) A potential future negative impact to value and/or cash flows is often discussed in terms of
probability of loss and the expected magnitude of the loss. This is called
A) options.
B) standard deviation.
C) coefficient of variation.
D) risk.
9) This is a term to describe non-physical assets like stocks and bonds that get their value from
future cash flows.
A) investment
B) financial asset
C) real asset
D) financial markets
,Test Bank for
Finance Applications and Theory 6e Cornett
Chapter 1-20 Answers are at the end of Each chapter
Chapter 1
Student name:__________
1) Which statements(s) is/are true for successful application of financial theories?
A) The economy will be more productive.
B) Individual’s wealth will grow.
C) The economy will be more productive and individual's wealth will grow.
D) None of these choices are correct.
2) Not all cash a company generates will be returned to the investors. Which of the following
will NOT reduce the amount of capital returned to the investors?
A) retained earnings
B) taxes
C) dividends
3) This subarea of finance involves methods and techniques to make appropriate decisions
about what kinds of securities to own, which firms' securities to buy, and how to be paid back
in the form that the investor wishes.
A) real markets
B) investments
C) financial management
4) This subarea of finance looks at firm decisions in acquiring and utilizing cash received from
investors or from retained earnings.
A) investments
B) financial management
C) financial institutions and markets
, 5) Financial management involves decisions about which of the following?
A) Which projects to fund
B) How to minimize taxation
C) What type of capital should be raised
D) All of these choices are correct.
6) This subarea of finance helps facilitate the capital flows between investors and companies.
A) investments
B) financial management
C) treasury management
D) financial institutions and markets
7) This subarea of finance is important for adapting to the global economy.
A) investments
B) financial management
C) international finance
D) financial institutions and markets
8) A potential future negative impact to value and/or cash flows is often discussed in terms of
probability of loss and the expected magnitude of the loss. This is called
A) options.
B) standard deviation.
C) coefficient of variation.
D) risk.
9) This is a term to describe non-physical assets like stocks and bonds that get their value from
future cash flows.
A) investment
B) financial asset
C) real asset
D) financial markets
