The set of financial activities that support the operations of a

Question 1 5 / 5 points

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

Question options:

The owner’s unlimited liability

The lack of continuity upon death of the owner

The ease of start-up

The ability to raise capital

Question 2 5 / 5 points

Stocks are bought and sold in __________ markets.

Question options:

equity

debt

derivatives

foreign exchange

Question 3 5 / 5 points

The common objective of borrowing and lending is to:

Question options:

make all parties better off.

gain a profit at the other’s expense.

make a firm or individual appear more liquid than is really the case.

thwart regulatory authority.

Question 4 5 / 5 points

__________ are the forums where buyers and sellers of financial assets and commodities meet.

Question options:

Housing markets

Federal Reserve banks

Financial markets

Automotive shows

Question 5 5 / 5 points

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

Question options:

debt

capital

stock

money

Question 6 5 / 5 points

The set of financial activities that support the OPERATIONS of a business is best described by which main area of finance?

Question options:

Corporate finance

Investments

Financial institutions and markets

International finance

Question 7 5 / 5 points

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

Question options:

track and report interest rates.

move money from lenders to borrowers and back again.

report all financial transactions to the federal government.

effect a transfer of wealth in society.

Question 8 5 / 5 points

__________ addresses the question of how to handle our day-to-day business needs.

Question options:

Capital budgeting

Capital structure

Working capital management

Accounts receivable management

Question 9 5 / 5 points

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

Question options:

Double taxation

Unlimited liability

Lack of ability to raise capital

Transfer of ownership

Question 10 5 / 5 points

In agency theory, the owners of the business are referred to as __________, and the managers are referred to as __________.

Question options:

bondholders, principals

stockholders, bondholders

agents, principals

principals, agents

Question 11 5 / 5 points

Options are bought and sold in __________ markets.

Question options:

equity

debt

derivatives

foreign exchange

Question 12 5 / 5 points

Of the following, which is NOT one of the four main areas of finance?

Question options:

International Finance

Corporate Finance

Investments

All are considered main areas of finance.

Question 13 5 / 5 points

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

Question options:

leadership directive.

management priority.

principal-agent problem.

sigma six structure.

Question 14 5 / 5 points

The means by which a company is financed refers to the firm’s ________.

Question options:

capital budgeting

capital structure

accounts receivable management

working capital management

Question 15 5 / 5 points

Currencies are bought and sold in __________ markets.

Question options:

equity

debt

derivatives

foreign exchange

Question 16 5 / 5 points

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

Question options:

Capital budgeting

Capital structure

Working capital management

Accounts receivable management

Question 17 5 / 5 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.

Question options:

primary

money

secondary

capital

Question 18 5 / 5 points

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

Question options:

Working capital management

International finance

Investments

Corporate finance

Question 19 5 / 5 points

A __________ is a business that is owned entirely by an individual.

Question options:

sole proprietorship

partnership

subchapter S corporation

corporation

Question 20 5 / 5 points

__________ is the area of finance concerned with the activities of buying and selling financial assets such as stocks and bonds.

Question options:

Investments

Corporate finance

International finance

Financial markets and institutions