1.If a company allows its customers longer terms of credit, it can increase its sales significantly. However, this would create issues related to:

a. All of the answers

b. Liquidity risk

c. Financing costs

d. Risk of default

2.Which of the following statements is not common features of debt?

a. Longterm or shortterm nature

b. No voting rights

c. Interest payment or coupon

d. Interest is not guaranteed

3.The investment manager is embarrassed to admit that he has also forgotten his understanding of 'capital rationing'. He is trying the difference between 'hard' and 'soft' capital rationing - does the distinction lie in:

a. External but Objective funding constrains placed on the business

b. Internal and Rational funding constrains placed on the business

c. Objective and Rational funding constrains placed on the business

d. Internal and External funding constrains placed on the business

4.Money received today is worth more than the same sum received in the future because of:

a. The effect of risk

b. All of the answers

c. The impact of inflation

d. The potential for earning interest