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