True-False Practice Questions: test #1 AND EXPALIN EACH ONE WHY

1. According to the Order of Operations, exponents are applied before the expression in parentheses, division is to be completed before multiplication, and addition and subtraction are to be completed before multiplication and division.

2. A simple percent change represents a change as part of the new or later value.

3. To change a decimal value to a percent, divide by 10.

4. In a Normal Distribution, there is a 68% chance that an actual return will exceed the average return minus one standard deviation.

5. For a given mean, a larger standard deviation reflects less uncertainty.

6. If both the top and bottom of a fraction increase, there is no way to tell in which direction the value of the whole fraction would change.

7. The capital budgeting area deals with how the firm should be financed.

8. The capital structure area deals with how much of a firms assets should be held in cash, inventory and accounts receivable.

9. The goal of the corporate financial manager is to maximize the firms profits.

10. In order to maximize stock prices, financial managers should try to keep costs down, maximize risk, and generate as little cash as possible.