Franklyn A Plus Pass
TEST BANK for Foundations of Financial
Management 18th Edition by Stanley B. Block,
Geoffrey A. Hirt, Bartley Danielsen
All Chapters Included 1-21| Verified Q&As for Exam
Preparations| A+ GRADED
Fr
an
kl
yn
e
A
pl
us
Pa
Page | 1
ss
, Franklyn A Plus Pass
Chapter 1 The Goals and Activities of Financial Management
1) As finance emerged as a new field, much emphasis was placed on mergers and acquisitions.
Correct Answer: TRUE Difficulty: 1 Easy
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
Bloom's: Remember AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
2) Inflation is assumed to be a temporary problem that does not affect financial decisions.
Correct Answer: FALSE Difficulty: 1 Easy
Topic: Financial management decisions
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
Bloom's: Remember AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
3) Financial capital is composed of long-term plant and equipment, as well as other tangible investments.
Fr
Correct Answer: FALSE Difficulty: 1 Easy
an
Topic: Introduction to corporate finance
kl
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
yn
Bloom's: Remember AACSB: Reflective Thinking
e
Accessibility: Keyboard Navigation
A
pl
4) Real capital is composed of long-term plant and equipment.
us
Correct Answer: TRUE Difficulty: 1 Easy
Topic: Introduction to corporate finance
Pa
Page | 2
ss
, Franklyn A Plus Pass
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
Bloom's: Remember
AACSB: Reflective Thinking Accessibility: Keyboard Navigation
5) During the 1930s, financial practice revolved around such topics as the preservation of capital,
maintenance of liquidity, the reorganization of financially troubled corporations, and bankruptcy.
Correct Answer: TRUE Difficulty: 1 Easy
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
Bloom's: Remember AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
6) In the mid 1950s, finance began to change to a more analytical, decision-oriented approach.
Correct Answer: TRUE Difficulty: 1 Easy
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
Fr
number of other areas.
Bloom's: Remember AACSB: Reflective Thinking
an
Accessibility: Keyboard Navigation
kl
yn
7) Recently, the emphasis of financial management has been on the relationship between risk and return.
e
Correct Answer: TRUE Difficulty: 1 Easy
A
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
pl
number of other areas.; 01-03 The relationship of risk to return is a central focus of finance. Bloom's:
us
Understand
AACSB: Analytical Thinking Accessibility: Keyboard Navigation
Pa
Page | 3
ss
, Franklyn A Plus Pass
8) The first Nobel Prizes given to finance professors were for their contributions to capital structure
theory and portfolio theories of risk and return.
Correct Answer: TRUE Difficulty: 1 Easy
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
Bloom's: Remember
AACSB: Reflective Thinking Accessibility: Keyboard Navigation
9) How investors handle risk is an important topic that usually only economists observe.
Correct Answer: FALSE
Explanation: Behavioral finance is something that the finance industry puts heavy emphasis on.
Difficulty: 1 Easy
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
Bloom's: Remember AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Fr
10) Mortgage-backed securities were devalued by accounting standards because of the high credit ratings
an
(AAA).
kl
Correct Answer: FALSE
yn
Explanation: These securities were devalued because borrowers defaulted on their loans and didn't have
the financial means to back up their loans in other ways.
e
Difficulty: 1 Easy
A
Topic: Introduction to corporate finance
pl
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
us
Bloom's: Remember AACSB: Reflective Thinking
Pa
Page | 4
ss
TEST BANK for Foundations of Financial
Management 18th Edition by Stanley B. Block,
Geoffrey A. Hirt, Bartley Danielsen
All Chapters Included 1-21| Verified Q&As for Exam
Preparations| A+ GRADED
Fr
an
kl
yn
e
A
pl
us
Pa
Page | 1
ss
, Franklyn A Plus Pass
Chapter 1 The Goals and Activities of Financial Management
1) As finance emerged as a new field, much emphasis was placed on mergers and acquisitions.
Correct Answer: TRUE Difficulty: 1 Easy
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
Bloom's: Remember AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
2) Inflation is assumed to be a temporary problem that does not affect financial decisions.
Correct Answer: FALSE Difficulty: 1 Easy
Topic: Financial management decisions
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
Bloom's: Remember AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
3) Financial capital is composed of long-term plant and equipment, as well as other tangible investments.
Fr
Correct Answer: FALSE Difficulty: 1 Easy
an
Topic: Introduction to corporate finance
kl
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
yn
Bloom's: Remember AACSB: Reflective Thinking
e
Accessibility: Keyboard Navigation
A
pl
4) Real capital is composed of long-term plant and equipment.
us
Correct Answer: TRUE Difficulty: 1 Easy
Topic: Introduction to corporate finance
Pa
Page | 2
ss
, Franklyn A Plus Pass
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
Bloom's: Remember
AACSB: Reflective Thinking Accessibility: Keyboard Navigation
5) During the 1930s, financial practice revolved around such topics as the preservation of capital,
maintenance of liquidity, the reorganization of financially troubled corporations, and bankruptcy.
Correct Answer: TRUE Difficulty: 1 Easy
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
Bloom's: Remember AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
6) In the mid 1950s, finance began to change to a more analytical, decision-oriented approach.
Correct Answer: TRUE Difficulty: 1 Easy
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
Fr
number of other areas.
Bloom's: Remember AACSB: Reflective Thinking
an
Accessibility: Keyboard Navigation
kl
yn
7) Recently, the emphasis of financial management has been on the relationship between risk and return.
e
Correct Answer: TRUE Difficulty: 1 Easy
A
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
pl
number of other areas.; 01-03 The relationship of risk to return is a central focus of finance. Bloom's:
us
Understand
AACSB: Analytical Thinking Accessibility: Keyboard Navigation
Pa
Page | 3
ss
, Franklyn A Plus Pass
8) The first Nobel Prizes given to finance professors were for their contributions to capital structure
theory and portfolio theories of risk and return.
Correct Answer: TRUE Difficulty: 1 Easy
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
Bloom's: Remember
AACSB: Reflective Thinking Accessibility: Keyboard Navigation
9) How investors handle risk is an important topic that usually only economists observe.
Correct Answer: FALSE
Explanation: Behavioral finance is something that the finance industry puts heavy emphasis on.
Difficulty: 1 Easy
Topic: Introduction to corporate finance
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
Bloom's: Remember AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Fr
10) Mortgage-backed securities were devalued by accounting standards because of the high credit ratings
an
(AAA).
kl
Correct Answer: FALSE
yn
Explanation: These securities were devalued because borrowers defaulted on their loans and didn't have
the financial means to back up their loans in other ways.
e
Difficulty: 1 Easy
A
Topic: Introduction to corporate finance
pl
Learning Objective: 01-01 The field of finance integrates concepts from economics, accounting, and a
number of other areas.
us
Bloom's: Remember AACSB: Reflective Thinking
Pa
Page | 4
ss
