FIN 3113 - Assignment 1 & 2
1. The overall goal of the financial manager is to:: maximize shareholder wealth
2. This group is elected by stockholders to oversee management in a
corporation:: board of directors
3. What is an example of aligning managers' personal interests with those of
the owners?
- allow the managers to have as many perks as they request
- pay the managers high salaries
- offer the managers an equity stake in the firm
- trust the managers' actions as they as they will always act in their owner's
best interest: offer the managers an equity stake in the firm
4. For corporations, maximizing the value of owner's equity can also be
stated as:: maximizing the stock price
5. The practice generally known as double taxation is due to:: corporate
incomes being taxed at the corporate level, then again at the shareholder level
when corporate profits are paid out as dividends
6. This type of business organization is relatively easy to start, and it is
subject to much lighter regulatory and paperwork burden than other business
forms:: sole proprietorship
7. 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? - retained earnings
- taxes
- dividends: dividends
8. Which of the following is correct?
- Accountants are focused on what happened in the past.
- Financial managers are focused on what happened in the past.
- Both accountants and financial managers use total quality management
systems to standardize data.
- Financial managers double-check the accountants statements.: Accountants
are focused on what happened in the past
9. The board of directors:: are elected by shareholders.
10. From the perspective of ownership risk, the best form of business
organization is the:: corporation
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, FIN 3113 - Assignment 1 & 2
11. From the perspective of access to capital, the best form of business
organization is the:: corporation
12. Which of the following statements is correct?
- Sole proprietorships are easy to start.
- If the sole proprietorship gets sued, the owner is not liable.
- It is relatively easy for sole proprietorships to raise money.
- Profits from the sole proprietorship are subject to double taxation: sole
proprietorships are easy to start
13. Which of these feature debt securities or instruments with maturities of
one year or less?: money markets
14. Primary markets financial instruments include stock issues from firms
allowing their equity shares to be publicly traded on the stock market for
the first time. We usually refer to these first-time issues as which of the
following?: initial public offerings
15. Which of the following is NOT a capital market instrument?
- U.S. Treasury notes and bonds
- U.S. Treasury bills
- U.S. government agency bonds
- corporate stocks and bonds: - U.S. Treasury bills
16. Which of the following is the continual increase in the price level of a
basket of goods and services?
- deflation
- inflation
- recession
- stagflation: Inflation
17. In the United States, which of these financial institutions arrange most
primary market transactions for business?
- investment banks - asset transformer
- direct transfer agents
- over-the-counter agents: investment banks
18. Once firm issues financial investments in primary markets, these same
stocks and bonds are then traded in which of these?
- initial public offerings
- direct transfers
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1. The overall goal of the financial manager is to:: maximize shareholder wealth
2. This group is elected by stockholders to oversee management in a
corporation:: board of directors
3. What is an example of aligning managers' personal interests with those of
the owners?
- allow the managers to have as many perks as they request
- pay the managers high salaries
- offer the managers an equity stake in the firm
- trust the managers' actions as they as they will always act in their owner's
best interest: offer the managers an equity stake in the firm
4. For corporations, maximizing the value of owner's equity can also be
stated as:: maximizing the stock price
5. The practice generally known as double taxation is due to:: corporate
incomes being taxed at the corporate level, then again at the shareholder level
when corporate profits are paid out as dividends
6. This type of business organization is relatively easy to start, and it is
subject to much lighter regulatory and paperwork burden than other business
forms:: sole proprietorship
7. 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? - retained earnings
- taxes
- dividends: dividends
8. Which of the following is correct?
- Accountants are focused on what happened in the past.
- Financial managers are focused on what happened in the past.
- Both accountants and financial managers use total quality management
systems to standardize data.
- Financial managers double-check the accountants statements.: Accountants
are focused on what happened in the past
9. The board of directors:: are elected by shareholders.
10. From the perspective of ownership risk, the best form of business
organization is the:: corporation
1/7
, FIN 3113 - Assignment 1 & 2
11. From the perspective of access to capital, the best form of business
organization is the:: corporation
12. Which of the following statements is correct?
- Sole proprietorships are easy to start.
- If the sole proprietorship gets sued, the owner is not liable.
- It is relatively easy for sole proprietorships to raise money.
- Profits from the sole proprietorship are subject to double taxation: sole
proprietorships are easy to start
13. Which of these feature debt securities or instruments with maturities of
one year or less?: money markets
14. Primary markets financial instruments include stock issues from firms
allowing their equity shares to be publicly traded on the stock market for
the first time. We usually refer to these first-time issues as which of the
following?: initial public offerings
15. Which of the following is NOT a capital market instrument?
- U.S. Treasury notes and bonds
- U.S. Treasury bills
- U.S. government agency bonds
- corporate stocks and bonds: - U.S. Treasury bills
16. Which of the following is the continual increase in the price level of a
basket of goods and services?
- deflation
- inflation
- recession
- stagflation: Inflation
17. In the United States, which of these financial institutions arrange most
primary market transactions for business?
- investment banks - asset transformer
- direct transfer agents
- over-the-counter agents: investment banks
18. Once firm issues financial investments in primary markets, these same
stocks and bonds are then traded in which of these?
- initial public offerings
- direct transfers
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