Navigation » List of Schools » California State University, Northridge » Finance » Finance 303 – Financial Management » Spring 2024 » Quiz 1
Below are the questions for the exam with the choices of answers:
Question #1
A an unincorporated business owned by one individual
B often established easily and inexpensively
C a legal entity created by a state, separate and distinct from its owners and managers
D a hybrid between a partnership and a corporation
E a legal arrangement between two or more people who decide to do business together
Question #2
A Accounting
B Human Resources
C Management
D Marketing
E None of these answers is correct.
Question #3
A Basing managers’ compensation on intrinsic value, not market price, will lead to constant increases in stock price.
B Yearly changes in compensation policies keep managers alert to differences in stock prices.
C Rewarding managers for stock performance over the long run gives them an incentive to keep the stock price high over time.
D Awarding managers stock options on a monthly basis instead of yearly keeps stock prices high.
E High salaries motivate managers to increase stockholders’ wealth.
Question #4
A not say anything because she’s not in charge of development.
B There is no clear answer but staying quiet may be the worst choice.
C disobey and include the test results anyhow.
D anonymously tip off the local news team.
E obey the order but talk to other members of her team about the issue.
Question #5
A based on how they affect the stock price.
B in terms of financial consequences and how they affect society at large.
C consistent with management goals.
D for transparency and corporate governance.
E to prioritize the broader needs of society .
Question #6
A the amount of common stock in a firm exceeds the amount of bonds.
B they believe that a company will pursue risky projects.
C All of these answer choices are correct.
D covenants are included in the bond agreements.
E there are more than two bondholders.
Question #7
A ensures that underperforming firms will be able to change course and recover.
B causes the stock price to remain close to the intrinsic value over time.
C makes it less likely that corporate raiders will undervalue a firm’s stock.
D avoids shareholder activism.
E allows managers to persuade stockholders that the firm is socially responsible.
Question #8
A When the market is bad, stockholders don’t lose as much.
B Stockholders get paid first.
C Stockholders do better when the company does better because the stock price is higher.
D Additional debt gives stockholders an advantage in the market.
E Stockholders protect themselves with covenants.
Question #9
A C corporations
B Proprietorships
C LLCs and LLPs
D Partnerships
E S corporations
Question #10
A employees decide how individual retirement funds are invested and how much risk they are willing to assume.
B all jobs require some level of financial knowledge .
C most employees are not willing to take financial risks.
D decision-making skills improve over time .
E employers make investment decisions in “defined contribution” pension plans.
Question #11
A the actual stock price exceeds the intrinsic value of the stock.
B the firm’s intrinsic value is maximized.
C there is an R&D breakthrough.
D investors are pessimistic about a stock.
E the intrinsic value of the stock exceeds the market price.
Question #12
A Use of stock-based compensation for key employees
B Rules and practices to ensure that managers balance the needs of customers, employees, and affected citizens with shareholder interests
C Focus on short-run profits that add up in the long run
D Holding managers accountable for poor performance
E Having a strong, independent board of directors
Question #13
A undergo an annual audit to review practices regarding social responsibility, corporate governance, and transparency.
B still focus on making a profit.
C are committed to putting other stakeholders on an equal footing with shareholders.
D All of these answer choices are correct.
E are a fairly small but rapidly growing number of companies.
Question #14
A The COO is in charge of accounting and finance in most businesses.
B Accounting developed from finance and economics.
C Finance, economics, and accounting are not related.
D Economics developed from accounting and finance.
E Finance developed from economics and accounting.
Question #15
A All of these answer choices are correct.
B take proactive steps to ensure the situation is dealt with.
C avoid damage to the company’s culture and long-term performance.
D investigate the situation.
E ensure that the company’s reputation is not damaged.
Question #16
A Investments
B All of these are considered areas of a finance discipline
C Accounting
D Capital markets
E Financial management