1. Which of the following statements is correct?

Group of answer choices

A major disadvantage of a corporation is that stockholders have unlimited liability for debts and other obligations.

The financial manager's goal is to determine the combination of debt and equity that minimizes the cost of financing the firm.

All the answers are correct.

Owners of corporations have unlimited liability because corporations are not legal persons that take actions in their own names, but in the names of individual owners.

Depreciation is the cash remaining after a firm has paid operating expenses and what it owes creditors and in taxes, the depreciation can be distributed to the owners as a cash dividend or by repurchasing some shares, or reinvested in the business.

2.

Which of the following statements is correct?

Group of answer choices

All the answers are correct.

One of the advantages of the sole proprietorship is related to the fact that the amount of equity capital that can be raised to finance the business is unlimited.

The risk manager monitors and manages the firm's risk exposure in financial and commodity markets and the firm's relationships with insurance providers.

The financial manager is responsible for making decisions that are in the best interests of the firm's bondholders and other creditors.

The short-term assets are also known as non-productive assets can be tangible assets, such as equipment, machinery, or a manufacturing facility, or intangible assets, such as patents, trademarks, technical expertise, or other types of intellectual capital.

3. (TRUE or FALSE?) The problem of unlimited liability is avoided for some partners in a general partnership because general partners can generally only lose the amount of money that they have invested in the business.

Group of answer choices

True

False

4. (TRUE or FALSE?) The problem of unlimited liability is avoided for some partners in a limited partnership because limited partners can generally only lose the amount of money that they have invested in the business.

Group of answer choices

True

False

5. (TRUE or FALSE?) The risk manager monitors and manages the firm's risk exposure in financial and commodity markets and the firm's relationships with insurance providers.

Group of answer choices

True

False

6. Ms. Walters want to have $215,000 annual income every year for the next 21 years. If she can earn an average rate of return of 8 percent, how much does Ms. Walters need to put down today to have $215,000 annual income every year for the next 21 years?

Group of answer choices

none of the answers is correct

$2,153,613

$5,658,938

$3,891,764

$5,292,614

7. Which of the following statements is correct?

Group of answer choices

Decreases in the money supply put downward pressure on long-term interest rates.

The term capital market is used because the instruments traded in this market are close substitutes for cash.

For businesses, the least common type of bank loan is a line of credit, often called rowing credit, which does not work like a credit card but rather a debit card.

Examples of financial assets are business loans, stocks, and bonds.

All the answers are correct.

8. Which of the following statements is incorrect?

Group of answer choices

Examples of real assets are plant and equipment.

In a weak-form efficient market, it would not be possible to earn abnormally high returns by looking for patterns in security prices.

The Fed manages a key component of the nation's economy by conducting fiscal policy, which affects how much of the individual and corporate taxes are collected.

The real rate of interest is not observable because all industrial economies operate with some degree of inflation.

All the answers are correct except one.