Intro to Finance Exam Questions and
Answers (Latest 2026).
capital budgeting or capital expenditure (CAPEX) decision - CORRECT ANSWERS decision to
invest in tangible or intangible assets
financing decision - CORRECT ANSWERS form and amount of financing of a firm's investments
equity investors - CORRECT ANSWERS investors in a company who become shareholders by
contributing equity financing
debt investors - CORRECT ANSWERS when investors lend money to a company and will
eventually need to be repaid.
Real assets - CORRECT ANSWERS acquired by investments; used to produce goods and
services
financial assets - CORRECT ANSWERS financial claims to the income generated by the firm's
real assets
Corporation - CORRECT ANSWERS a business organized as a separate legal entity owned by
stockholders
limited liability - CORRECT ANSWERS the owners of a corporation are not personally liable for
its obligations
forms of business organization - CORRECT ANSWERS proprietorship, partnership,
corporation, limited partnership, LLC or LLP
, CFO - CORRECT ANSWERS sets overall financial strategy
treasurer - CORRECT ANSWERS responsible for financing, cash management, and relationship
with banks and other financial institutions that hold the firms securities.
controller - CORRECT ANSWERS responsible for budgeting, accounting, and taxes. Ensures
money is used efficiently
Main goal of shareholders - CORRECT ANSWERS Maximize the current market value of
shareholders' investment in the firm.
opportunity cost of capital - CORRECT ANSWERS minimum acceptable rate of return on
capital investment; aka hurdle rate
agency problems - CORRECT ANSWERS managers are agents for stockholders, but the
managers may act in their own interests rather than maximizing value
stakeholder - CORRECT ANSWERS anyone with a financial interest in the firm
blockholder - CORRECT ANSWERS individual investors that hold 5% or more of the company's
shares
financial market - CORRECT ANSWERS Market where securities are issued and traded
primary market - CORRECT ANSWERS market for the sale of new securities by corporations
secondary market - CORRECT ANSWERS Market in which previously issued securities are
traded among investors
Answers (Latest 2026).
capital budgeting or capital expenditure (CAPEX) decision - CORRECT ANSWERS decision to
invest in tangible or intangible assets
financing decision - CORRECT ANSWERS form and amount of financing of a firm's investments
equity investors - CORRECT ANSWERS investors in a company who become shareholders by
contributing equity financing
debt investors - CORRECT ANSWERS when investors lend money to a company and will
eventually need to be repaid.
Real assets - CORRECT ANSWERS acquired by investments; used to produce goods and
services
financial assets - CORRECT ANSWERS financial claims to the income generated by the firm's
real assets
Corporation - CORRECT ANSWERS a business organized as a separate legal entity owned by
stockholders
limited liability - CORRECT ANSWERS the owners of a corporation are not personally liable for
its obligations
forms of business organization - CORRECT ANSWERS proprietorship, partnership,
corporation, limited partnership, LLC or LLP
, CFO - CORRECT ANSWERS sets overall financial strategy
treasurer - CORRECT ANSWERS responsible for financing, cash management, and relationship
with banks and other financial institutions that hold the firms securities.
controller - CORRECT ANSWERS responsible for budgeting, accounting, and taxes. Ensures
money is used efficiently
Main goal of shareholders - CORRECT ANSWERS Maximize the current market value of
shareholders' investment in the firm.
opportunity cost of capital - CORRECT ANSWERS minimum acceptable rate of return on
capital investment; aka hurdle rate
agency problems - CORRECT ANSWERS managers are agents for stockholders, but the
managers may act in their own interests rather than maximizing value
stakeholder - CORRECT ANSWERS anyone with a financial interest in the firm
blockholder - CORRECT ANSWERS individual investors that hold 5% or more of the company's
shares
financial market - CORRECT ANSWERS Market where securities are issued and traded
primary market - CORRECT ANSWERS market for the sale of new securities by corporations
secondary market - CORRECT ANSWERS Market in which previously issued securities are
traded among investors
