Quiz;Note: It is recommended that you save your response as you complete each question.;Question 1 (2 points) Question 1 Unsaved;The traditional goal of financial management has been to maximize the value of the firm to its;owners.;Question 1 options;True;False;Save;Question 2 (2 points) Question 2 Unsaved;Finance is the area of business responsible for finding the best sources of funds to acquire for;business operations and then determining the best way to use those funds.;Question 2 options;True;False;Save;Question 3 (2 points) Question 3 Unsaved;Social responsibility is NOT considered a long-term financial performance concern for financial;managers.;Question 3 options;True;False;Save;Question 4 (2 points) Question 4 Unsaved;Thomas is ready to launch his vending truck business, but is in need of start-up financing. The;best funding source for Thomas? business would be a bank or other established lenders.;Question 4 options;True;False;Save;Question 5 (2 points) Question 5 Unsaved;A corporation can raise additional equity financing by taking out a long-term loan from a bank.;Question 5 options;True;False;Save;Question 6 (2 points) Question 6 Unsaved;Interest payments on a firm?s debt are a tax-deductible expense.;Question 6 options;True;False;Save;Question 7 (2 points) Question 7 Unsaved;CEOs have been accused of many things, especially when the public perceives them as greedy.;When it comes to blending shareholder value with social responsibility, it doesn?t have to be a;case of oil and water, however. Which of the following scenarios best describes how the two;should relate?;Question 7 options;A chief executive is probably most effective when he is both rock star and quietly hardworking;because if he works hard, the publicity he generates will be a boon for the company.;It?s simple: no matter how much a CEO earns or what his or her perks are, if the company is;profitable and generates sustainable growth, everybody wins as long as the enterprise is led in;a socially responsible way.;Case in point regarding how CEOs abuse their positions: they all fly in private jets. Plus, if they;are fired, they retain all their billions in stocks. So there?s a conflict of interest between;maximizing shareholder value and the CEO?s compensation when the CEO is also a;shareholder.;The best way to maximize shareholder value while being socially responsible is to allow the;federal government to legally cap CEO pay in publicly traded companies. They already do this;in some professional sports. Wall Street is overdue.;Save;Question 8 (2 points) Question 8 Unsaved;Financial planning asks all of the following questions EXCEPT;Question 8 options;What specific assets must the firm obtain in order to achieve its goals?;How much additional financing will the firm need to acquire assets?;When will the firm need to acquire external financing?;How does the firm determine its pricing strategy?;Save;Question 9 (2 points) Question 9 Unsaved;Advantages of debt financing include all of the following EXCEPT;Question 9 options;covenants that provide important benefits to the borrower are normally included in debt;agreements.;interest payments on debt are tax-deductible.;the firm can acquire added funds without requiring current owners to contribute additional funds;of their own.;using debt can increase the return on equity to owners during periods of strong earnings.;Save;Question 10 (2 points) Question 10 Unsaved;is the use of debt in a firm?s capital structure.;Question 10 options;Financial leverage;Liquidity boosting;Debt loading;Discounting;Save;Question 11 (2 points) Question 11 Unsaved;Financial capital is used to meet short- and long-term obligations.;Question 11 options;True;False;Save;Question 12 (2 points) Question 12 Unsaved;Historically, the goal of financial management has been to achieve a dominant market share.;Question 12 options;True;False;Save;Question 13 (2 points) Question 13 Unsaved;Most common financial ratios are based on information taken from a firm?s balance sheet and;income statement.;Question 13 options;True;False;Save;Question 14 (2 points) Question 14 Unsaved;The closer the debt ratio is to one, the greater the firm?s reliance on debt.;Question 14 options;True;False;Save;Question 15 (2 points) Question 15 Unsaved;Cathy purchased several corporate bonds from a large corporation five years ago. Cathy;recently lost her job and has decided to sell the corporate bonds. Since the bonds have a;maturity date that is 10 years from the date of purchase, Cathy would not be able to sell her;bonds to other investors.;Question 15 options;True;False;Save;Question 16 (2 points) Question 16 Unsaved;One disadvantage of equity financing is that it locks the firm into making fixed payments.;Question 16 options;True;False;Save;Question 17 (2 points) Question 17 Unsaved;Equity financing yields the same tax benefits for a company that debt financing yields.;Question 17 options;True;False;Save;Question 18 (2 points) Question 18 Unsaved;Financial leverage is the use of debt in a firm?s capital structure.;Question 18 options;True;False;Save;Question 19 (2 points) Question 19 Unsaved;U.S. Treasury Bills are marketable, highly liquid short-term securities and are considered very;safe.;Question 19 options;True;False;Save;Question 20 (2 points) Question 20 Unsaved;The Dodd-Frank Act requires large firms in the financial sector to;Question 20 options;hold more debt and less equity.;participate in deleveraging.;rely on high financial leverage.;increase their debt-to-equity ratio.;Save;Question 21 (2 points) Question 21 Unsaved;Financial markets make it possible for companies to obtain financial resources.;Question 21 options;True;False;Save;Question 22 (2 points) Question 22 Unsaved;The Federal Deposit Insurance Corporation was established by the Banking Act of 1933 and;insures depositors against financial loss if a bank fails.;Question 22 options;True;False;Save;Question 23 (2 points) Question 23 Unsaved;Jack Richman works in senior management for Roan & Wright, Inc. During a recent strategy;session, Jack learned that the company was on the verge of announcing a major technological;breakthrough. He?s confident that once the breakthrough is announced to the public, the price of;the company?s stock will surge dramatically. If Jack buys more of his company?s stock before the;announcement, his actions could be investigated by the Securities and Exchange Commission.;Question 23 options;True;False;Save;Question 24 (2 points) Question 24 Unsaved;Common stock is the basic form of ownership in a corporation.;Question 24 options;True;False;Save;Question 25 (2 points) Question 25 Unsaved;A bond is a long-term debt instrument issued by a corporation or government entity.;Question 25 options;True;False;Save;Question 26 (2 points) Question 26 Unsaved;Dan has $6,000 that he would like to invest. He wants to diversify his investment, but feels that;$6,000 isn?t enough to buy many different securities. Besides, he doesn?t know much about;picking good stocks and doesn?t want the hassle of trying to make investment decisions. Dan is;likely to find mutual funds an attractive way to invest his $6,000.;Question 26 options;True;False;Save;Question 27 (2 points) Question 27 Unsaved;The stocks of Apple, Google and Microsoft are listed on the NASDAQ exchange.;Question 27 options;True;False;Save;Question 28 (2 points) Question 28 Unsaved;The United States is the only nation with well-established securities exchanges set up to trade;securities on the secondary market.;Question 28 options;True;False;Save;Question 29 (2 points) Question 29 Unsaved;The Dow Jones Industrial Average, also known as the Dow, is a security exchange where;stocks are traded.;Question 29 options;True;False;Save;Question 30 (2 points) Question 30 Unsaved;The _____ created the Federal Reserve System, with its primary responsibility being to oversee;our nation?s banking system.;Question 30 options;Banking Act of 1933;Federal Reserve Act of 1913;Glass-Steagall Act;Securities Act of 1933;Save;Question 31 (2 points) Question 31 Unsaved;Common stockholders have all of the following rights EXCEPT;Question 31 options;a preemptive right.;the right to repayment of the principal.;voting rights.;a right to residual claim on assets.;Save;Question 32 (2 points) Question 32 Unsaved;The Price/Earnings ratio;Question 32 options;develops an investor?s knowledge of the prices of various stocks in a single industry.;is of little value to investors these days due to the fact that market values far exceed earnings;value.;is important to investors because they want this ratio to be 1:1.;is a multiple that shows investors how many times over earnings a particular stock price is;trading.;Save;Question 33 (2 points) Question 33 Unsaved;The Securities Exchange Act of 1934 established the Securities and Exchange Commission and;gave it broad powers to oversee the securities industry.;Question 33 options;True;False;Save;Question 34 (2 points) Question 34 Unsaved;The Securities and Exchange Commission is the federal agency that has the authority to;investigate allegations of illegal insider trading.;Question 34 options;True;False;Save;Question 35 (2 points) Question 35 Unsaved;The primary purpose of the Federal Reserve Act of 1913 was to stabilize the nations?s banking;system.;Question 35 options;True;False;Save;Question 36 (2 points) Question 36 Unsaved;One of the first things you can do in your effort to prepare a budget is to track and analyze your;personal financial decisions for a few weeks, including what you take in and what you spend;and how you use your money.;Question 36 options;True;False;Save;Question 37 (2 points) Question 37 Unsaved;Candace just purchased an iced coffee from the local coffee shop. Candace?s purchase is an;example of a nondiscretionary payment.;Question 37 options;True;False;Save;Question 38 (2 points) Question 38 Unsaved;The Federal Deposit Insurance Corporation is an independent government agency that protects;individual investments in the stock market.;Question 38 options;True;False;Save;Question 39 (2 points) Question 39 Unsaved;A key to financial security is the creation of a ?safety net.? This ?safety net? should be able to;cover six months of your expenses.;Question 39 options;True;False;Save;Question 40 (2 points) Question 40 Unsaved;Your ability to purchase goods or resources without making immediate payment is known as an;investment.;Question 40 options;True;False;Save;Question 41 (2 points) Question 41 Unsaved;The benefits of having a credit card include not having to carry cash and the opportunity to;establish a credit history.;Question 41 options;True;False;Save;Question 42 (2 points) Question 42 Unsaved;The Dodd-Frank Act created the Consumer Financial Protection Bureau to provide consumers;with information that would assist them in making a decision on the best credit card for the;consumer.;Question 42 options;True;False;Save;Question 43 (2 points) Question 43 Unsaved;Recently your Aunt Gertie asked you about investing $10,000. During the course of your;conversation, she mentioned that she was looking for a maximum level of safety. Based on this;information, you suggest you invest the $10,000 in corporate stock.;Question 43 options;True;False;Save;Question 44 (2 points) Question 44 Unsaved;It is never a good idea to have a diversified portfolio because your investments are spread out;and can result in increased risk.;Question 44 options;True;False;Save;Question 45 (2 points) Question 45 Unsaved;April is addicted to her Venti Caramel Frappe, and she has one every single day. When she;calls home to talk to dad about needing more money for ?school supplies,? he?s like, ?Whoa.? So;she has to explain to dad that she has a pretty high ?latte factor.? How does the conversation;end, if it ends as a positive step in April?s life?;Question 45 options;April tells her dad that her Frappe is a nondiscretionary cost, therefore she?ll be ?waiting down at;the Western Union, if you know what I mean.?;April?s dad explains to her that her ?latte factor? needs to diminish, reminds her that she is living;on a student income, and tells her to get a job as he cuts her off from her college fund.;April decides that her Frappe-a-day is risky for her financial health, and decides to change her;habits. In exchange for that commitment, daddy, who loves her dearly, emails her a link to a;budgeting tool to help her better manage what she has.;April?s dad counsels her to apply for a credit card so that she can build credit while;simultaneously getting her daily fix.;Save;Question 46 (2 points) Question 46 Unsaved;What is one of the reasons why the Dodd-Frank Act created the Consumer Financial Protection;Bureau?;Question 46 options;to protect the credit card companies from bad debt;to give consumers the opportunity to buy a copy of their credit score before applying for a credit;card;to pre-approve consumers for credit cards;to make it easier for consumers to compare the features and costs of credit cards;Save;Question 47 (2 points) Question 47 Unsaved;After a review of your friend?s current financial situation, you discovered she was carrying a;$4,500 credit card balance with an APR of 22%. The best advice you can give to your friend is;to;Question 47 options;eliminate using her credit card for nonessential purchases.;switch credit card companies, since many companies offer benefits like frequent-flier miles.;keep using the card and not to worry about the balance, since all interest is tax deductible.;place a high priority on eliminating her credit card balance.;Save;Question 48 (2 points) Question 48 Unsaved;Why is investing earlier in life preferable?;Question 48 options;so you can stop while you?re buying your home;to take advantage of the compounding effect;to use that money for a new car;so you can retire when you?re 40 years old;Save;Question 49 (2 points) Question 49 Unsaved;All contributions to a Roth IRA are _____ but withdrawals are _____.;Question 49 options;tax-free, taxable;taxable, tax-free;passive, tax-free;tax-free, subject only to state taxes;Save;Question 50 (2 points) Question 50 Unsaved;One advantage of participating in a company-sponsored retirement plan is;Question 50 options;you always pay taxes on these contributions during the year you contribute.;you are allowed to contribute only half as much as you would contribute to an IRA, so you get to;keep more of your earnings.;time value of money does not apply.;companies will often participate in a matching process, where they will contribute a percentage;of the amount you contribute.
Paper#28465 | Written in 18-Jul-2015Price : $60