C214 Chapters 1-3 Quiz Review:
Financial Management Question and
answers rated A+ 2025/2026
Economics is a subfield of finance - correct answer ✔False: finance is a subfield of economics
Which of the following is NOT an example of firm capital? - correct answer ✔Financial markets: they
are venues where capital can be raised through the issuance of stocks, bond and other
Capital is defined as a financial asset - correct answer ✔True
Corporate finance is devoted to understanding various types of financial instruments. - correct answer
✔False: investments is devoted to understanding various types of financial instruments
Which of the following is an example of firm capital? - correct answer ✔Cash: is an asset that the firm
can use immediately in its operations or to invest in like machinery or equipment
Corporate finance focuses on the decision making by the management of the firm - correct answer
✔True
What are the three important areas of finances discussed in this section? - correct answer ✔Corporate
finance, investments and financial institutions
Banks make money when interest rates they charge to borrowers are less than interest rates they pay
depositors? - correct answer ✔False: banks make more money when interest rates they charge to
borrowers are more than interest rates they pay to depositors
Stocks and bonds are two types of financial instruments - correct answer ✔true
,Stock represents ownership in a particular company - correct answer ✔True: represents a share of
ownership in a company, they benefit from companies profits and growth
Companies can raise capital by issuing bonds or stocks - correct answer ✔true: stocks to raise equity
capital and bonds to raise debt captial
A stock is a debt instrument issued by corporations - correct answer ✔false: stock represents
ownership in a company
A treasury bond is a debt instrument issued by corporations - correct answer ✔False: issued by
governments
A bond is a debt instrument issued by corporations or governments - correct answer ✔true: borrows
funds from investors for a define period at a variable or fixed interest rate
A bond is similar to a loan - correct answer ✔True: they presents a borrowers promise to pay back a
sum of money at fixed intervals with interest
Primary financial markets are markets where issuers place new securities with investors - correct
answer ✔true: primary financial markets are indeed where new securities are issued and sold to
investors for the first time which helps companies raise new capital
What are two ways a syndicate can place a bond? - correct answer ✔competitive sale or negotiated
sale
An IPO is a seasoned equity offering - correct answer ✔false: its public, first sale of stock by company to
public
Seasoned equity offering refers to the sale of new shares by a company that has already gone public
, An IPO occurs on the primary market - correct answer ✔true
Syndicates are generally made up of investment banks and other institutional investors - correct answer
✔True: involved in IPOs, composed of investment banks and other investors that underwrite and
distribute new securities
While competitive sales allow underwriters to submit bids to purchase bonds, negotiated sales do not -
correct answer ✔false: competitive sales involve underwriters submitting bids to purchase bonds,
negotiated involve direct negotiations with issuers, does not include competitive bidding
NASDAQ is the worlds largest secondary financial market - correct answer ✔true
auction markets have a physical location - correct answer ✔true
dealer markets do not have a physical location - correct answer ✔true
NASDAQ is an example of a dealer market - correct answer ✔true
Stocks that are listed on dealer markets generally have multiple dealers for each stock - correct answer
✔true
When dealers have to compete with one another, transaction costs will generally decreased - correct
answer ✔due to the competitive pressure to offer better prices and lower fees to attract business
markets are where prices are determined - correct answer ✔true; through the interaction of buys and
sellers establishing the value of traded securities
Financial Management Question and
answers rated A+ 2025/2026
Economics is a subfield of finance - correct answer ✔False: finance is a subfield of economics
Which of the following is NOT an example of firm capital? - correct answer ✔Financial markets: they
are venues where capital can be raised through the issuance of stocks, bond and other
Capital is defined as a financial asset - correct answer ✔True
Corporate finance is devoted to understanding various types of financial instruments. - correct answer
✔False: investments is devoted to understanding various types of financial instruments
Which of the following is an example of firm capital? - correct answer ✔Cash: is an asset that the firm
can use immediately in its operations or to invest in like machinery or equipment
Corporate finance focuses on the decision making by the management of the firm - correct answer
✔True
What are the three important areas of finances discussed in this section? - correct answer ✔Corporate
finance, investments and financial institutions
Banks make money when interest rates they charge to borrowers are less than interest rates they pay
depositors? - correct answer ✔False: banks make more money when interest rates they charge to
borrowers are more than interest rates they pay to depositors
Stocks and bonds are two types of financial instruments - correct answer ✔true
,Stock represents ownership in a particular company - correct answer ✔True: represents a share of
ownership in a company, they benefit from companies profits and growth
Companies can raise capital by issuing bonds or stocks - correct answer ✔true: stocks to raise equity
capital and bonds to raise debt captial
A stock is a debt instrument issued by corporations - correct answer ✔false: stock represents
ownership in a company
A treasury bond is a debt instrument issued by corporations - correct answer ✔False: issued by
governments
A bond is a debt instrument issued by corporations or governments - correct answer ✔true: borrows
funds from investors for a define period at a variable or fixed interest rate
A bond is similar to a loan - correct answer ✔True: they presents a borrowers promise to pay back a
sum of money at fixed intervals with interest
Primary financial markets are markets where issuers place new securities with investors - correct
answer ✔true: primary financial markets are indeed where new securities are issued and sold to
investors for the first time which helps companies raise new capital
What are two ways a syndicate can place a bond? - correct answer ✔competitive sale or negotiated
sale
An IPO is a seasoned equity offering - correct answer ✔false: its public, first sale of stock by company to
public
Seasoned equity offering refers to the sale of new shares by a company that has already gone public
, An IPO occurs on the primary market - correct answer ✔true
Syndicates are generally made up of investment banks and other institutional investors - correct answer
✔True: involved in IPOs, composed of investment banks and other investors that underwrite and
distribute new securities
While competitive sales allow underwriters to submit bids to purchase bonds, negotiated sales do not -
correct answer ✔false: competitive sales involve underwriters submitting bids to purchase bonds,
negotiated involve direct negotiations with issuers, does not include competitive bidding
NASDAQ is the worlds largest secondary financial market - correct answer ✔true
auction markets have a physical location - correct answer ✔true
dealer markets do not have a physical location - correct answer ✔true
NASDAQ is an example of a dealer market - correct answer ✔true
Stocks that are listed on dealer markets generally have multiple dealers for each stock - correct answer
✔true
When dealers have to compete with one another, transaction costs will generally decreased - correct
answer ✔due to the competitive pressure to offer better prices and lower fees to attract business
markets are where prices are determined - correct answer ✔true; through the interaction of buys and
sellers establishing the value of traded securities
