QUESTION 1

Which of the following are not included in the corporate charter?

1. Name of corporation

2. Amount of stock

3. Bylaws

4. All of the above are included in the corporate charter

QUESTION 2

You invest $10,000 in a corporation and the company goes bankrupt and you lose all your money.This is an example of:

1. QUESTION 3

Which of the following is not one of the things that cause a corporation to have a significant advantage over a partnership or a proprietorship?

1. Ease of transfer of ownership interest

2. Limited liability

3. Unlimited life

4. Elimination of double taxation

7 points

QUESTION 4

The financial manager's responsibilities include which of the following?

1. Forecasting

2.

Planning

3. Dealing with the financial markets

4. All of the above

7 points

QUESTION 5

Which of the following statements is correct?

1. The partnership is a legal entity created by the state and is a direct extension of the legal status of its owners and managers.

2. Unlimited liability and limited life are two key advantages of the corporate form over other forms of business organization.

3. In part due to limited liability and ease of ownership transfer, corporations have less trouble raising money in financial markets than other organizational forms.

4. None of the above

7 points

QUESTION 6

Which of the following is not a type of difference found in multinational finance:

1. Different currencies

2. Raw materials

3. Language differences

4. Role of governments

7 points

QUESTION 7

The primary goal of the corporation is:

1. Minimize the debt used by the firm

2. Maximize expected net income

3. Maximize stockholders' wealth

4. Minimize the chance of losses

5. None of the above

QUESTION 8

You are seeking to issue new stock, which of the following financial markets do you go to:

1. Money market

2. Capital market

3. Secondary market

4.None of the above

QUESTION 9

You want to purchase a 6-month certificate of deposit (cd), you go to which of the following financial markets:

1. Spot market

2. Money market

3. Capital market

4. Equity market

5. None of the above

7 points

QUESTION 10

Money markets are markets for:

1. Long-term bonds

2. Short-term debt securities

3. Corporate stocks

4. Foreign currency exchange

5. Consumer automobile loans

7 points

QUESTION 11

Treasury bills, which represent debt of the U.S. government, have maturities less than one year. As a result, in which type of financial market do outstanding, or already issued, Treasury bills trade?

1. capital market

2. primary market

3. money market

4. stock markets

5. Treasury bills trade in more than one of the above markets

7 points

QUESTION 12

Which of the following is not a considered financial intermediary?

1. commercial bank

2. savings and loan association

3. pension fund

4. investment bank

5. All of the above are financial intermediaries

7 points

QUESTION 13

The New York Stock Exchange is primarily:

1.

A secondary market

2.

An organized stock market

3.

An over-the-counter market

4.

Both answers a and b are correct

5.

Both answers b and c are correct

2 points

QUESTION 14

A corporate stock that was issued last year would now trade in the __________ market.

1. primary

2. secondary

3. money

4. debt

5. government securities

7 points

QUESTION 15

If your goal is determine how effectively a firm is managing its assets, which of the following sets of ratios would you examine?

1. profit margin, current ratio, fixed charge coverage ratio

2. quick ratio, debt ratio, time interest earned

3. inventory turnover ratio, days sales outstanding, fixed asset turnover ratio

4. total assets turnover ratio, price earnings ratio, return on total assets

5. time interest earned, profit margin, fixed asset turnover ratio

7 points

QUESTION 16

Which of the following ratios measures the extent to which operating income can decline before the firm is unable to meet its annual interest costs

1. fixed charge coverage ratio

2. debt ratio

3. times-interest-earned ratio

4. return on equity

5. profit margin

7 points