BU340 Lesson 1 Exam SCORE 100 PERCENT

  

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