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 often established easily and inexpensively
B a legal entity created by a state, separate and distinct from its owners and managers
C a hybrid between a partnership and a corporation
D an unincorporated business owned by one individual
E a legal arrangement between two or more people who decide to do business together
Question #2
A Marketing
B Accounting
C Human Resources
D Management
E None of these answers is correct.
Question #3
A Rewarding managers for stock performance over the long run gives them an incentive to keep the stock price high over time.
B Awarding managers stock options on a monthly basis instead of yearly keeps stock prices high.
C Basing managers’ compensation on intrinsic value, not market price, will lead to constant increases in stock price.
D Yearly changes in compensation policies keep managers alert to differences in stock prices.
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 anonymously tip off the local news team.
D disobey and include the test results anyhow.
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 consistent with management goals.
C in terms of financial consequences and how they affect society at large.
D for transparency and corporate governance.
E to prioritize the broader needs of society .
Question #6
A All of these answer choices are correct.
B they believe that a company will pursue risky projects.
C covenants are included in the bond agreements.
D the amount of common stock in a firm exceeds the amount of bonds.
E there are more than two bondholders.
Question #7
A ensures that underperforming firms will be able to change course and recover.
B allows managers to persuade stockholders that the firm is socially responsible.
C avoids shareholder activism.
D makes it less likely that corporate raiders will undervalue a firm’s stock.
E causes the stock price to remain close to the intrinsic value over time.
Question #8
A Stockholders get paid first.
B Additional debt gives stockholders an advantage in the market.
C Stockholders protect themselves with covenants.
D Stockholders do better when the company does better because the stock price is higher.
E When the market is bad, stockholders don’t lose as much.
Question #9
A Proprietorships
B C corporations
C S corporations
D LLCs and LLPs
E Partnerships
Question #10
A decision-making skills improve over time .
B employers make investment decisions in “defined contribution” pension plans.
C most employees are not willing to take financial risks.
D all jobs require some level of financial knowledge .
E employees decide how individual retirement funds are invested and how much risk they are willing to assume.
Question #11
A the firm’s intrinsic value is maximized.
B the actual stock price exceeds the intrinsic value of the stock.
C investors are pessimistic about a stock.
D there is an R&D breakthrough.
E the intrinsic value of the stock exceeds the market price.
Question #12
A Having a strong, independent board of directors
B Use of stock-based compensation for key employees
C Focus on short-run profits that add up in the long run
D Holding managers accountable for poor performance
E Rules and practices to ensure that managers balance the needs of customers, employees, and affected citizens with shareholder interests
Question #13
A still focus on making a profit.
B are committed to putting other stakeholders on an equal footing with shareholders.
C are a fairly small but rapidly growing number of companies.
D All of these answer choices are correct.
E undergo an annual audit to review practices regarding social responsibility, corporate governance, and transparency.
Question #14
A Finance developed from economics and accounting.
B Accounting developed from finance and economics.
C Economics developed from accounting and finance.
D The COO is in charge of accounting and finance in most businesses.
E Finance, economics, and accounting are not related.
Question #15
A ensure that the company’s reputation is not damaged.
B take proactive steps to ensure the situation is dealt with.
C investigate the situation.
D All of these answer choices are correct.
E avoid damage to the company’s culture and long-term performance.
Question #16
A Financial management
B Capital markets
C Investments
D Accounting
E All of these are considered areas of a finance discipline