1
D775 Business Finance - PA Test #2
70 Questions and Answers (100%
Correct Answers) Already Graded A+
What is the time orientation of financial
decision-making in business finance? Ans:
Future projections and planning
© 2025 Assignment
How do businesses use financial ratios in their
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operations? Ans: To evaluate and improve
business performance
Expert
What is a primary objective of business finance?
Ans: Maximizing shareholder value
What are corporate bonds used for? Ans:
Financing operations and expansions
What are financial derivatives based on? Ans:
Performance of underlying assets, indexes, or
rates
What is a future as a type of financial derivative?
Ans: A standardized contract to buy or sell an
asset at a specified future date and price
, 2
What distinguishes hedge funds from mutual
funds? Ans: They employ diverse strategies and
are available to sophisticated investors.
How do funds achieve diversification? Ans: By
pooling money from multiple investors to invest
in a variety of assets
What do speculative bonds, or junk bonds,
© 2025 Assignment
typically offer compared to investment-grade
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bonds? Ans: Higher risk and higher returns
Expert
What is the advantage of investing in exchange-
traded funds (ETFs)? Ans: They can be bought
and sold throughout the trading day like stocks.
Which market is an example of a dealer market?
Ans: National Association of Securities Dealers
Automated Quotations (NASDAQ)
Which market is an example of an auction
market? Ans: New York Stock Exchange
What is the primary function of the Securities
and Exchange Commission (SEC)? Ans: To
regulate securities markets and protect investors
, 3
What is the primary focus of the Commodity
Futures Trading Commission (CFTC)? Ans:
Overseeing futures and options markets
Which role do insurance companies play in the
financial system? Ans: Underwriting policies to
protect against risks
How do insurance companies generate income?
© 2025 Assignment
Ans: By collecting premiums and investing
Guru01 - Stuvia
these funds
Expert
What is a key characteristic of private equity
raising? Ans: It involves securing funds from
private investors like venture capitalists.
What does legal compliance ensure in finance?
Ans: It ensures adherence to laws and
regulations.
What is corporate social responsibility (CSR)?
Ans: The obligation to contribute positively to
society
Which principle should guide business
professionals in ethical dilemmas? Ans:
Upholding honesty, fairness, and accountability
D775 Business Finance - PA Test #2
70 Questions and Answers (100%
Correct Answers) Already Graded A+
What is the time orientation of financial
decision-making in business finance? Ans:
Future projections and planning
© 2025 Assignment
How do businesses use financial ratios in their
Guru01 - Stuvia
operations? Ans: To evaluate and improve
business performance
Expert
What is a primary objective of business finance?
Ans: Maximizing shareholder value
What are corporate bonds used for? Ans:
Financing operations and expansions
What are financial derivatives based on? Ans:
Performance of underlying assets, indexes, or
rates
What is a future as a type of financial derivative?
Ans: A standardized contract to buy or sell an
asset at a specified future date and price
, 2
What distinguishes hedge funds from mutual
funds? Ans: They employ diverse strategies and
are available to sophisticated investors.
How do funds achieve diversification? Ans: By
pooling money from multiple investors to invest
in a variety of assets
What do speculative bonds, or junk bonds,
© 2025 Assignment
typically offer compared to investment-grade
Guru01 - Stuvia
bonds? Ans: Higher risk and higher returns
Expert
What is the advantage of investing in exchange-
traded funds (ETFs)? Ans: They can be bought
and sold throughout the trading day like stocks.
Which market is an example of a dealer market?
Ans: National Association of Securities Dealers
Automated Quotations (NASDAQ)
Which market is an example of an auction
market? Ans: New York Stock Exchange
What is the primary function of the Securities
and Exchange Commission (SEC)? Ans: To
regulate securities markets and protect investors
, 3
What is the primary focus of the Commodity
Futures Trading Commission (CFTC)? Ans:
Overseeing futures and options markets
Which role do insurance companies play in the
financial system? Ans: Underwriting policies to
protect against risks
How do insurance companies generate income?
© 2025 Assignment
Ans: By collecting premiums and investing
Guru01 - Stuvia
these funds
Expert
What is a key characteristic of private equity
raising? Ans: It involves securing funds from
private investors like venture capitalists.
What does legal compliance ensure in finance?
Ans: It ensures adherence to laws and
regulations.
What is corporate social responsibility (CSR)?
Ans: The obligation to contribute positively to
society
Which principle should guide business
professionals in ethical dilemmas? Ans:
Upholding honesty, fairness, and accountability
