TEST BANK for Finance: Applications &
Theory, 6th Edition by Marcia Millon
Cornett, Troy Alton Adair
ALL CHAPTERS COVERED 1-20| EXPERT VERIFIED
EXAM Q&As | A+ PASS GUARANTEED
ALL ANSWERS ARE AT THE END OF EACH CHAPTER
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, Chapter 1: Introduction to Financial Management
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
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C) financial institutions and markets
ch
2
Do
c
,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.
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C) coefficient of variation.
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D) risk.
3
Do
c
, 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
10) Which of the following is defined as a group of securities that exhibit similar characteristics, behave
similarly in the marketplace, and are subject to the same laws and regulations?
A) investments
B) asset classes
C) market instruments
D) financial markets
11) The most commonly accepted groups of asset classes include all of the following except
A) stocks.
B) bonds.
C) machinery and equipment.
D) real estate.
12) The is the interest rate at which banks and other depository institutions lend reserve balances to one
another overnight; this rate heavily influences other short-term rates.
A) average tax rate
Ar
B) exchange rate
C) federal funds rate
ch
4
Do
c
Theory, 6th Edition by Marcia Millon
Cornett, Troy Alton Adair
ALL CHAPTERS COVERED 1-20| EXPERT VERIFIED
EXAM Q&As | A+ PASS GUARANTEED
ALL ANSWERS ARE AT THE END OF EACH CHAPTER
Ar
ch
1
Do
c
, Chapter 1: Introduction to Financial Management
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
Ar
C) financial institutions and markets
ch
2
Do
c
,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.
Ar
C) coefficient of variation.
ch
D) risk.
3
Do
c
, 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
10) Which of the following is defined as a group of securities that exhibit similar characteristics, behave
similarly in the marketplace, and are subject to the same laws and regulations?
A) investments
B) asset classes
C) market instruments
D) financial markets
11) The most commonly accepted groups of asset classes include all of the following except
A) stocks.
B) bonds.
C) machinery and equipment.
D) real estate.
12) The is the interest rate at which banks and other depository institutions lend reserve balances to one
another overnight; this rate heavily influences other short-term rates.
A) average tax rate
Ar
B) exchange rate
C) federal funds rate
ch
4
Do
c
