EXAM 1
__________ addresses the question of how to handle our day-to-day business needs.
A. Capital budgeting
B. Capital structure
C. Working capital management
D. Accounts receivable management
A __________ is a business that is jointly owned by two or more individuals.
A. partnership
B. sole proprietorship
C. subchapter S corporation
D. corporation
Capital budgeting is best defined by which of the following questions?
A. How will we fund our product and service choices?
B. What business are we in?
C. How will we manage our day-to-day financial needs?
D. What is our firm’s best choice for corporate governance?
Of the following, which is NOT one of the four main areas of finance?
A. International Finance
B. Corporate Finance
C. Investments
D. All are considered main areas of finance.
The movement of money from lender to borrower and back again is known as:
A. the circle of life.
B. corporate finance.
C. the cycle of money.
D. money laundering.
The form of business organization in the United States that has the greatest amount of capital is:
A. the sole proprietorship.
B. the partnership.
C. the subchapter corporation.
D. the publicly traded corporation.
Financial assets that will mature within a year are bought and sold in the __________ market.
A. debt
B. capital
C. stock
D. money
Currencies are bought and sold in __________ markets.
A. equity
B. debt
C. derivatives
D. foreign exchange
Capital structure is best defined by which of the following questions?
A. How will we fund our product and service choices?
B. What business are we in?
C. How will we manage our day-to-day financial needs?
D. What is our firm’s best choice for corporate governance?
In agency theory, the owners of the business are referred to as __________, and the managers are referred to as __________.
A. bondholders, principals
B. stockholders, bondholders
C. agents, principals
D. principals, agents
__________ is the area of finance concerned with the activities of buying and selling financial assets such as stocks and bonds.
A. Investments
B. Corporate finance
C. International finance
D. Financial markets and institutions
The sale of “new” securities, where the financial asset is being traded for the very first time, is said to take place in the __________ market.
A. primary
B. money
C. secondary
D. capital
