Fin2601) Oct/Nov 2025- 1
1. T/F - Sole Proprietorship is the most common form of business ownership:
T
2. T/F - A Sole Proprietor may have to sell personal assets to pay off company
debts: T
3. T/F - Sole Proprietorship has unlimited liability: T
4. When you the words Capital Market in a MCQ question should you think
Long Term or Short Term?: Long Term
5. T/F - Does this describe a Capital Market - A financial relationship created
by institutions and arrangements that allows suppliers and demanders of
long-term funds to make transactions: T
6. T/F - Does this describe a Capital Market - A market that allocates funds to
their most productive uses as result of competition among wealthy
investors: F
7. T/F - Does this describe a Money Market - A financial relationship created
by institutions and arrangements that allows suppliers and demanders of
short-term funds to make transactions: T
8. If all things being equal, in which of the following forms of business would
the possibility of an agency problem be the greatest? 1) A sole
proprietorship 2) A foreign corporation that is publicly traded 3) A foreign
corp with concentrated ownership (relatively few owners) 4) A partnership
in which all partners share management and decision making
responsibilities equally:
9. Which problem does this describe - managers not acting in the interest of
the shareholders: Agency problem
10. Is the agency problem more likely to occur in a public company or
partnership or sole proprietorship?: Public company
11. Is the agency problem more likely to occur in a public company or public
company with few shareholders?: Public company
12. Which of the following should be the primary goal of a financial
manager? 1) Maximize steady growth in sales and profit 2) Maximize
company efficiency and minimize operational costs 3) Maximize the current
dividend per share of existing shares 4) Maximize the current share price
value of existing shares: 4)
1/4
1. T/F - Sole Proprietorship is the most common form of business ownership:
T
2. T/F - A Sole Proprietor may have to sell personal assets to pay off company
debts: T
3. T/F - Sole Proprietorship has unlimited liability: T
4. When you the words Capital Market in a MCQ question should you think
Long Term or Short Term?: Long Term
5. T/F - Does this describe a Capital Market - A financial relationship created
by institutions and arrangements that allows suppliers and demanders of
long-term funds to make transactions: T
6. T/F - Does this describe a Capital Market - A market that allocates funds to
their most productive uses as result of competition among wealthy
investors: F
7. T/F - Does this describe a Money Market - A financial relationship created
by institutions and arrangements that allows suppliers and demanders of
short-term funds to make transactions: T
8. If all things being equal, in which of the following forms of business would
the possibility of an agency problem be the greatest? 1) A sole
proprietorship 2) A foreign corporation that is publicly traded 3) A foreign
corp with concentrated ownership (relatively few owners) 4) A partnership
in which all partners share management and decision making
responsibilities equally:
9. Which problem does this describe - managers not acting in the interest of
the shareholders: Agency problem
10. Is the agency problem more likely to occur in a public company or
partnership or sole proprietorship?: Public company
11. Is the agency problem more likely to occur in a public company or public
company with few shareholders?: Public company
12. Which of the following should be the primary goal of a financial
manager? 1) Maximize steady growth in sales and profit 2) Maximize
company efficiency and minimize operational costs 3) Maximize the current
dividend per share of existing shares 4) Maximize the current share price
value of existing shares: 4)
1/4
