Quiz
Finance 001
Fragen in diesem Quiz (10)
1Which of the following statements is CORRECT?
- AOne of the disadvantages of incorporating a business is that the owners then become subject to liabilities in the event the firm goes bankrupt.
- BSole proprietorships are subject to more regulations than corporations.
- CIn any type of partnership, every partner has the same rights, privileges, and liability exposure as every other partner.
- DSole proprietorships and partnerships generally have a tax advantage over many corporations, especially large ones.
- ECorporations of all types are subject to the corporate income tax.
2Which of the following statements is CORRECT?
- AOne of the disadvantages of a sole proprietorship is that the proprietor is exposed to unlimited liability.
- BIt is generally easier to transfer one's ownership interest in a partnership than in a corporation.
- COne of the advantages of the corporate form of organization is that it avoids double taxation.
- DOne of the advantages of a corporation from a social standpoint is that every stockholder has equal voting rights, i.e., "one person, one vote."
- ECorporations of all types are subject to the corporate income tax.
3Cheers Inc. operates as a partnership. Now the partners have decided to convert the business into a regular corporation. Which of the following statements is CORRECT?
- AAssuming Cheers is profitable, less of its income will be subject to federal income taxes.
- BCheers' shareholders (the ex-partners) will now be exposed to less liability.
- CCheers' investors will be exposed to less liability, but they will find it more difficult to transfer their ownership.
- DCheers will now be subject to fewer regulations.
- ECheers will find it more difficult to raise additional capital.
4Which of the following statements is CORRECT?
- AIt is generally more expensive to form a proprietorship than a corporation because, with a proprietorship, extensive legal documents are required.
- BCorporations face fewer regulations than sole proprietorships.
- COne disadvantage of operating a business as a sole proprietorship is that the firm is subject to double taxation, at both the firm level and the owner level.
- DOne advantage of forming a corporation is that equity investors are usually exposed to less liability than in a regular partnership.
- EIf a regular partnership goes bankrupt, each partner is exposed to liabilities only up to the amount of his or her investment in the business.
5Which of the following statements is CORRECT?
- AIt is usually easier to transfer ownership in a corporation than it is to transfer ownership in a sole proprietorship.
- BCorporate shareholders are exposed to unlimited liability.
- CCorporations generally face fewer regulations than sole proprietorships.
- DCorporate shareholders are exposed to unlimited liability, and this factor may be compounded by the tax disadvantages of incorporation.
- EShareholders in a regular corporation (not an S corporation) pay higher taxes than owners of an otherwise identical proprietorship.
6Which of the following could explain why a business might choose to operate as a corporation rather than as a sole proprietorship or a partnership?
- ACorporations generally find it relatively difficult to raise large amounts of capital.
- BLess of a corporation's income is generally subjected to taxes than would be true if the firm were a partnership.
- CCorporate shareholders escape liability for the firm's debts, but this factor may be offset by the tax disadvantages of the corporate form of organization.
- DCorporate investors are exposed to unlimited liability.
- ECorporations generally face relatively few regulations.
7You recently sold 100 shares of your new company, XYZ Corporation, to your brother at a family reunion. At the reunion your brother gave you a check for the stock and you gave your brother the stock certificates. Which of the following statements best describes this transaction?
- AThis is an example of an exchange of physical assets.
- BThis is an example of a primary market transaction.
- CThis is an example of a direct transfer of capital.
- DThis is an example of a money market transaction.
- EThis is an example of a derivatives market transaction
8Which of the following statements is CORRECT?
- AIf expected inflation increases, interest rates are likely to increase.
- BIf individuals in general increase the percentage of their income that they save, interest rates are likely to increase.
- CIf companies have fewer good investment opportunities, interest rates are likely to increase.
- DInterest rates on all debt securities tend to rise during recessions because recessions increase the possibility of bankruptcy, hence the riskiness of all debt securities.
- EInterest rates on long-term bonds are more volatile than rates on short-term debt securities like T-bills.
9Which of the following statements is CORRECT?
- AIn Europe and Asia hedge funds are legal, but they are not permitted to operate in the United States.
- BHedge funds have more in common with commercial banks than with any other type of financial institution.
- CHedge funds have more in common with investment banks than with any other type of financial institution.
- DIn the United States hedge funds are legal, but in Europe and Asia they are not permitted to operate.
- EThe justification for the "light" regulation of hedge funds is that only "sophisticated" investors with high net worths and high incomes are permitted to invest in these funds, and such investors supposedly can do the necessary "due diligence" on their own rather than have it done by the SEC or some other regulator.
10Money markets are markets for
- AForeign stocks.
- BConsumer automobile loans.
- CU.S. stocks.
- DShort-term debt securities.
- ELong-term bonds.
Informationen
- Beschreibung
- Test 01
- Autor
- stable77
- Sprache
- English
- Aufrufe
- 347
- Schlagwörter
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