Question 1

Which of the following generally has no specific repayment period?

Accepted Answer

A)   An unsecured bank loan
B)   Factoring
C)   A secured loan
D)   A promissory note
E)   Trade creditF) A) and B)
G) A) and C)

Question 2

For a manufacturer,it is impossible to have cash-flow problems before peak sales periods.

Accepted Answer

A) True 
 B)False

Question 3

Long-term financing should be used to do which of the following?

Accepted Answer

A)   Pay for speculative production
B)   Purchase inventory for resale
C)   Pay salaries
D)   Pay utilities
E)   Develop new productsF) A) and D)
G) A) and B)

Question 4

Commercial paper usually is issued

Accepted Answer

A)   for 3 to 7 years.
B)   for short-term financing by large corporations.
C)   for short-term financing by small businesses.
D)   by large corporations unable to get credit elsewhere.
E)   by savings and loan associations.F) A) and B)
G) A) and C)

Question 5

To raise capital,Financial Fusion sold

Accepted Answer

A)   stock to family members and friends.
B)   stock to stockholders by using an IPO.
C)   bonds to a few close associates.
D)   commercial paper certificates to clients.
E)   promissory notes to a few trustworthy investors.F) A) and B)
G) A) and C)

Question 6

What types of businesses obtain venture capital financing? How does venture capital differ from a private placement?

Accepted Answer

Most venture capital firms do not invest...

Question 7

One of the most important priorities for someone interested in careers in finance is honesty.

Accepted Answer

A) True 
 B)False

Question 8

According to the risk-return ratio,conservative decisions actually result in more risk when compared to decisions that are often considered high-risk decisions.

Accepted Answer

A) True 
 B)False

Question 9

During the recent economic crisis,the number of business bankruptcies actually declined.

Accepted Answer

A) True 
 B)False

Question 10

A venture capital firm

Accepted Answer

A)   provides financing to only large businesses.
B)   looks for business that will provide a steady,average return.
C)   receives corporate bonds from firms it finances.
D)   consists of a pool of investors or a family partnership.
E)   is a large,diversified corporation looking for investment opportunities.F) A) and C)
G) A) and D)

Question 11

Most mature corporations distribute ____ of their after-tax profits as dividends to stockholders.

Accepted Answer

A)   none
B)   10 to 25 percent
C)   40 to 60 percent
D)   70 to 80 percent
E)   allF) A) and C)
G) A) and B)

Question 12

A revolving credit agreement is a guaranteed line of credit.

Accepted Answer

A) True 
 B)False

Question 13

Bonds that can be exchanged for a specified number of shares of common stock are called convertible bonds.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following companies would most likely be able to issue commercial paper?

Accepted Answer

A)   Mike's Pizza Place
B)   A local housing construction company
C)   General Electric
D)   A medium-sized advertising agency
E)   United WayF) A) and C)
G) C) and D)

Question 15

All of the activities concerned with obtaining money and using it effectively are called financial management.

Accepted Answer

A) True 
 B)False

Question 16

The greatest part of a firm's financing is provided by

Accepted Answer

A)   debt equity.
B)   sale of assets.
C)   government grants.
D)   sales revenue.
E)   equity capital.F) A) and B)
G) C) and D)

Question 17

For a corporation,equity capital is obtained from

Accepted Answer

A)   bondholders.
B)   banks.
C)   stockholders.
D)   insurance companies.
E)   credit unions.F) B) and C)
G) None of the above

Question 18

The date on the face of a bond telling when the face value is to be repaid is called the

Accepted Answer

A)   date of issuance.
B)   maturity date.
C)   dividend declaration date.
D)   discount rate.
E)   date of record.F) B) and C)
G) C) and D)

Question 19

When a seller allows a buyer thirty to sixty days to pay for a purchase,the sales arrangement is called

Accepted Answer

A)   a bank loan.
B)   trade credit.
C)   a promissory note.
D)   equity financing.
E)   None of these answers is correct.F) A) and C)
G) B) and D)

Question 20

How many times can a corporation's stock be sold in the primary market?

Accepted Answer

A)   Once
B)   Twice
C)   A maximum of three times
D)   Once per year
E)   UnlimitedF) A) and B)
G) C) and E)

Exam 16: Mastering Financial Management

How many times can a corporation's stock be sold in the primary market?

Correct AnswerverifiedShow Answer

Commercial paper usually is issued

Correct AnswerverifiedShow Answer

For a corporation,equity capital is obtained from

Correct AnswerverifiedShow Answer

For a manufacturer,it is impossible to have cash-flow problems before peak sales periods.

Correct AnswerverifiedShow Answer

A venture capital firm

Correct AnswerverifiedShow Answer

During the recent economic crisis,the number of business bankruptcies actually declined.

Correct AnswerverifiedShow Answer

The date on the face of a bond telling when the face value is to be repaid is called the

Correct AnswerverifiedShow Answer

One of the most important priorities for someone interested in careers in finance is honesty.

Correct AnswerverifiedShow Answer

Most mature corporations distribute ____ of their after-tax profits as dividends to stockholders.

Correct AnswerverifiedShow Answer

The greatest part of a firm's financing is provided by

Correct AnswerverifiedShow Answer

Bonds that can be exchanged for a specified number of shares of common stock are called convertible bonds.

Correct AnswerverifiedShow Answer

Long-term financing should be used to do which of the following?

Correct AnswerverifiedShow Answer

Which of the following generally has no specific repayment period?

Correct AnswerverifiedShow Answer

A revolving credit agreement is a guaranteed line of credit.

Correct AnswerverifiedShow Answer

All of the activities concerned with obtaining money and using it effectively are called financial management.

Correct AnswerverifiedShow Answer

What types of businesses obtain venture capital financing? How does venture capital differ from a private placement?

Correct AnswerverifiedMost venture capital firms do not invest...View AnswerShow Answer

According to the risk-return ratio,conservative decisions actually result in more risk when compared to decisions that are often considered high-risk decisions.

Correct AnswerverifiedShow Answer

Which of the following companies would most likely be able to issue commercial paper?

Correct AnswerverifiedShow Answer

When a seller allows a buyer thirty to sixty days to pay for a purchase,the sales arrangement is called

Correct AnswerverifiedShow Answer

To raise capital,Financial Fusion sold

Correct AnswerverifiedShow Answer

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Most venture capital firms do not invest...
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