Which of the following business organizational form(s) subject(s) the owner(s) to unlimited liability? Question 1 options: Sole proprietorship Corporation General partnership Both sole proprietorship and general partnership Question 2 (0.2 points) Saved Corruption in business does not affect the growth of the financial markets. Question 2 options: True False Question 3 (0.2 points) Saved A society's ideas about what actions are right and wrong are termed as Question 3 options: laws. rules and policies. unwritten laws. ethics. Question 4 (0.2 points) Savings by _____ in small dollar amounts is the origin of much of the money that funds business loans in an economy. Question 4 options: consumers the U.S. government small businesses none of these. Question 5 (0.2 points) An officer of a firm who is a majority owner in a competing firm will probably be subject to Question 5 options: a conflict of interest with his stockholders. an IRS audit. arbitrage profit returns to the SEC. an FBI investigation. Question 6 (0.2 points) Which of the following is responsible for performing an independent audit of a firm's financial statements? Question 6 options: CEO Audit committee CPA firm CFO Question 7 (0.2 points) A director who is not an employee of the firm is called Question 7 options: an official director. an inside director. an executive director. an independent director. Question 8 (0.2 points) A privately held corporation securing a loan from its regional commercial bank is an example of a direct market transaction. Question 8 options: True False Question 9 (0.2 points) Which of the following mechanisms can help to align the behavior of managers with the goals of stockholders? Question 9 options: Well-designed management compensation Managerial labor market An independent board of directors All of these Question 10 (0.2 points) Unlimited liability means that the owner of a firmis responsible for paying all the bills of the firm. Question 10 options: True False Question 11 (0.2 points) A primary market is any financial market in which owners of outstanding securities can resell them to other investors. Question 11 options: True False Question 12 (0.2 points) Without a financial market, purchasing a house would require a cash purchase. Question 12 options: True False Question 13 (0.2 points) The downside to a private placement transaction is that, it does not require the fees and expenses associated with an SEC registration. Question 13 options: True False Question 14 (0.2 points) If you are a borrower, which would you prefer to occur during the life of your loan? Question 14 options: A level of inflation that is lower than that anticipated at the outset of the loan A level of inflation that is higher than that anticipated at the outset of the loan No inflation at all A level of inflation that is exactly as anticipated at the outset of the loan Question 15 (0.2 points) If the supply of loanable funds decreases relative to the demand for those funds, then we would expect Question 15 options: interest rates to decrease. interest rates to increase. the cost of money to remain unchanged. interest rates to remain unchanged. Question 16 (0.2 points) The owners of a firm are unaffected by agency costs. Question 16 options: True False Question 17 (0.2 points) Which of the following is primarily responsible for managing all aspects of a firms financial side? Question 17 options: Audit committee CEO Board of directors CFO Question 18 (0.2 points) Which of the following is a stakeholder? Question 18 options: All of these An employee The IRS A lender Question 19 (0.2 points) If a firm needs to finance a new corporate headquarters building, then it would most likely seek the funds in the Question 19 options: capital market. futures market. money market. all of these. Question 20 (0.2 points) A highly liquid financial instrument with a maturity of 90 days would be traded in Question 20 options: the bond market. the stock market. the money market. none of these. Question 21 (0.2 points) Which of the following business organizational form(s) is/are the easiest one(s) to raise capital? Question 21 options: Both sole proprietorship and partnership Sole proprietorship Partnership Corporation Question 22 (0.2 points) Which of the following markets has no central trading location? Question 22 options: None of these. An auction market An over-the-counter market A futures exchange Question 23 (0.2 points) The general level of interest rates tends to follow Question 23 options: deflation. all of these. the default cycle. the business cycle. Question 24 (0.2 points) Businesses are the principal borrower-spenders in the economy. Question 24 options: True False Question 25 (0.2 points) Which of the following is an appropriate goal for a firm? Question 25 options: Tax minimization Stockholders wealth maximization Revenue maximization Profit maximization Question 26 (0.2 points) Most companies use indirect market from a financial institution to fund their needs. Question 26 options: True False Question 27 (0.2 points) An economy with a large flow of funds requires Question 27 options: an efficient financial system. all of these. a frictionless market. a lot of gold reserves. Question 28 (0.2 points) Working capital management decisions help to determine Question 28 options: all of these. how a firm's day-to-day financial matters should be managed. how a firm should finance its assets. which productive assets a firm should purchase. Question 29 (0.2 points) The process of converting financial securities with one set of characteristics into securities with another set of characteristics is called Question 29 options: financial intermediation. none of these. financial bundling. financial disintermediation. Question 30 (0.2 points) Which of the following theories states that security prices reflect all information, whether public or private? Question 30 options: Weak-form efficiency Strong-form efficiency Nominal-form efficiency Semistrong-form efficiency Question 31 (0.2 points) Stocks that are traded in the _____ are typically those of smaller and lesser known firms. Question 31 options: over-the-counter American Stock Exchange National Stock Exchange New York Stock Exchange Question 32 (0.2 points) If a small business opts not to borrow funds from a commercial bank, then what will probably be its next best alternative? Question 32 options: A pension An insurance company An investment fund A business finance company Question 33 (0.2 points) A stakeholder is Question 33 options: someone geographically close to the firm's headquarters. someone who has a claim on the cash flows of the firm. some government agency. all of these. Question 34 (0.2 points) In the United States, the real rate of interest has historically been around Question 34 options: 5 percent. 3 percent. 1 percent. 7 percent. Question 35 (0.2 points) A patent is a productive asset for a technology-based firm. Question 35 options: True False Question 36 (0.2 points) If a firm sells common stock to the public for the very first time, it is known as Question 36 options: an origination. a financial intermediation. an underwriting. an initial public offering. Question 37 (0.2 points) Current liabilities are liabilities that Question 37 options: none of these. will be converted to equity within a year. must be paid within a year. will be converted to cash within a year. Question 38 (0.2 points) Which of the following reports directly to the owners of a firm? (Assume that the firm is a public corporation.) Question 38 options: Board of directors CEO CFO Audit committee Question 39 (0.2 points) An agency conflict can arise when the agent of the firm is the sole owner of the firm. Question 39 options: True False Question 40 (0.2 points) Which of the following unconditional powers does the audit committee have the authority to do? Question 40 options: Audit the personal bank account of the CEO Question any person employed by the firm Audit the compensation files of firms in the same industry None of these Question 41 (0.2 points) The most common reason that corporate firms use the futures and options markets is Question 41 options: to make deposits. to hedge risk. to take risk. none of these. Question 42 (0.2 points) An example of an economy that had trouble in establishing a stock market and attracting foreign investment is