01 Jan D. sigma six structure.

Part 1 of 1 – Lesson 1 Questions 100.0/ 100.0 Points

Question 1 of 20

5.0/ 5.0 Points

__________ is the area of finance concerned with activities like borrowing funds to finance projects such as plant expansions or new product launches.

A. Working capital management

B. International finance

C. Investments

D. Corporate finance

Question 2 of 20

5.0/ 5.0 Points

At its most basic level, the function of financial intermediaries is to:

A. track and report interest rates.

B. move money from lenders to borrowers and back again.

C. report all financial transactions to the federal government.

D. effect a transfer of wealth in society.

Question 3 of 20

5.0/ 5.0 Points

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?

Question 4 of 20

5.0/ 5.0 Points

Which of the following is an advantage of a sole proprietorship?

A. The owner’s unlimited liability

B. The lack of continuity upon death of the owner

C. The ease of start-up

D. The ability to raise capital

Question 5 of 20

5.0/ 5.0 Points

“Concern with the multinational elements of financial activities” best describes which of the four main areas of finance?

A. Investments

B. International finance

C. Corporate finance

D. Financial institutions and markets

Question 6 of 20

5.0/ 5.0 Points

The process of planning, evaluating, selecting, and managing the long-term operating projects of the company is termed:

A. capital budgeting.

B. capital structure.

C. accounts receivable management.

D. working capital management.

Question 7 of 20

5.0/ 5.0 Points

Which of the following compensation packages is likely to work best for executive managers?

A. Piece-meal

B. Stock options

C. Quarterly bonuses

D. Commission

Question 8 of 20

5.0/ 5.0 Points

Financial assets that will mature within a year are bought and sold in the __________ market.

A. debt

B. capital

C. stock

D. money

Question 9 of 20

5.0/ 5.0 Points

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

Question 10 of 20

5.0/ 5.0 Points

__________ is a major disadvantage of the corporate form of business.

A. Double taxation

B. Unlimited liability

C. Lack of ability to raise capital

D. Transfer of ownership

Question 11 of 20

5.0/ 5.0 Points

__________ 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

Question 12 of 20

5.0/ 5.0 Points

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

Question 13 of 20

5.0/ 5.0 Points

A __________ is a business that is jointly owned by two or more individuals.

A. partnership

B. sole proprietorship

C. subchapter S corporation

D. corporation

Question 14 of 20

5.0/ 5.0 Points

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.

Question 15 of 20

5.0/ 5.0 Points

Currencies are bought and sold in __________ markets.

A. equity

B. debt

C. derivatives

D. foreign exchange

Question 16 of 20

5.0/ 5.0 Points

Options are bought and sold in __________ markets.

A. equity

B. debt

C. derivatives

D. foreign exchange

Question 17 of 20

5.0/ 5.0 Points

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?

Question 18 of 20

5.0/ 5.0 Points

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.

Question 19 of 20

5.0/ 5.0 Points

The problem of motivating one party to act in the best interest of another party is known as the:

A. leadership directive.

B. management priority.

C. principal-agent problem.

D. sigma six structure.

Question 20 of 20

5.0/ 5.0 Points

__________ addresses the question of what business we should be in over the long run.

A. Capital budgeting

B. Capital structure

C. Working capital management

D. Accounts receivable management