FIN-350 PREPARATION TEST 2026
QUESTIONS AND CORRECT ANSWERS
GRADED A+
● financial management. Answer: valuing things from the perspective
of a company or firm
● subareas of finance. Answer: 1) Investments
2) Financial management
3) Financial institutions and markets
4) international finance
● What is the difference between accounting and finance. Answer:
timing
● What are the four types of business organizations. Answer: 1. sole
proprietorships
2. General partnerships
3. corporations
4. hybrids
● characteristics of sole proprietorships. Answer: unlimited liability
, easy to start
● characteristics of General partnerships. Answer: multiple owners with
differrent percentage of ownership
At least one member needs to be a general partner
● characteristics of Corporations. Answer: limited liability
double taxation
easy to raise capital
● characteristics of hybrids. Answer: single taxation
limited liability to all owners
● Agency problem. Answer: When a principal hires an agent and cannot
carefully monitor the agent's actions
● What is fiduciary. Answer: Legal duty between two parties where one
party must act in the interest of the other party.
● What is corporate governance. Answer: Involves the set of laws,
policies, incentives, and monitors designed to handle the issues arising
from the separation of ownership and control
QUESTIONS AND CORRECT ANSWERS
GRADED A+
● financial management. Answer: valuing things from the perspective
of a company or firm
● subareas of finance. Answer: 1) Investments
2) Financial management
3) Financial institutions and markets
4) international finance
● What is the difference between accounting and finance. Answer:
timing
● What are the four types of business organizations. Answer: 1. sole
proprietorships
2. General partnerships
3. corporations
4. hybrids
● characteristics of sole proprietorships. Answer: unlimited liability
, easy to start
● characteristics of General partnerships. Answer: multiple owners with
differrent percentage of ownership
At least one member needs to be a general partner
● characteristics of Corporations. Answer: limited liability
double taxation
easy to raise capital
● characteristics of hybrids. Answer: single taxation
limited liability to all owners
● Agency problem. Answer: When a principal hires an agent and cannot
carefully monitor the agent's actions
● What is fiduciary. Answer: Legal duty between two parties where one
party must act in the interest of the other party.
● What is corporate governance. Answer: Involves the set of laws,
policies, incentives, and monitors designed to handle the issues arising
from the separation of ownership and control
