Finance Chapter One: Overview of Finance

Descripción

Test sobre Finance Chapter One: Overview of Finance, creado por Angie Koslowski el 26/09/2015.
Angie Koslowski
Test por Angie Koslowski, actualizado hace más de 1 año
Angie Koslowski
Creado por Angie Koslowski hace más de 8 años
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Resumen del Recurso

Pregunta 1

Pregunta
The main goal of the financial manager is to increase the firm's overall profits
Respuesta
  • True
  • False

Pregunta 2

Pregunta
In a corporation, profits are generally measured in terms of earnings per share
Respuesta
  • True
  • False

Pregunta 3

Pregunta
There is a positive correlation that exists between risk and return. The higher the risk of an investment, the higher the required return will be on that investment.
Respuesta
  • True
  • False

Pregunta 4

Pregunta
A firm's earnings are a true representation of cash flows available to the stockholders
Respuesta
  • True
  • False

Pregunta 5

Pregunta
Agency costs are fees that are paid by the management of a corporation to compensate any investor that feels that they have suffered a loss due to the agency problem.
Respuesta
  • True
  • False

Pregunta 6

Pregunta
Because of tax benefits, financial managers prefer cash flows later rather than sooner
Respuesta
  • True
  • False

Pregunta 7

Pregunta
The ethical behavior of the financial manager has a substantial impact on the shareholder's wealth maximization concept
Respuesta
  • True
  • False

Pregunta 8

Pregunta
Information asymmetry means that all market participants have exactly the same information set with which to make decisions.
Respuesta
  • True
  • False

Pregunta 9

Pregunta
The best deals in the market will go to the first investor who can recognize them and act on them
Respuesta
  • True
  • False

Pregunta 10

Pregunta
The required rate of return is what you think you will get
Respuesta
  • True
  • False

Pregunta 11

Pregunta
Which of the following is not one of the primary activities of the financial manager?
Respuesta
  • Making financing decisions
  • Prepare financial statements
  • Make investment decisions
  • Perform financial analysis

Pregunta 12

Pregunta
The main goal of the financial manager is to
Respuesta
  • maximize profit
  • maximize shareholder wealth
  • minimize costs

Pregunta 13

Pregunta
___________ can be defined as the art and science of managing money
Respuesta
  • economics
  • finance
  • accounting
  • banking

Pregunta 14

Pregunta
When the risk of an investment is high, the rate of return required by the investor will be
Respuesta
  • moderate
  • high
  • low
  • equal to a 30 day T-bill

Pregunta 15

Pregunta
The wealth of the shareholders of a corporation is represented by
Respuesta
  • price of stock
  • earnings per share
  • profits
  • cash flows

Pregunta 16

Pregunta
If the managers of a company are not the owners of the company, they are considered
Respuesta
  • directors
  • shareholders
  • insiders
  • agents

Pregunta 17

Pregunta
Agency costs pose the biggest problem for
Respuesta
  • directors
  • shareholders
  • insiders
  • agents

Pregunta 18

Pregunta
The largest provider of funds in the financial system is
Respuesta
  • individuals
  • businesses
  • government agencies
  • Bill Gates

Pregunta 19

Pregunta
Investments, markets and institutions, and corporate finance are
Respuesta
  • not related
  • closely related
  • only moderately related
  • not normally thought of as "finance"

Pregunta 20

Pregunta
The problem with profit maximization is that it is
Respuesta
  • short sighted
  • ignores risk
  • ignores timing of cash flows
  • all of the above
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