Summary FIN 370,,,,,FIN 370 Final Exam 2021

FIN 370 Final Exam 1) The goal of the firm should be A. maximization of profits B. maximization of shareholder wealth C. maximization of consumer satisfaction D. maximization of sales The answer is B 2) An example of a primary market transaction is A. a new issue of common stock by AT&T B. a sale of some outstanding common stock of AT&T C. AT&T repurchasing its own stock from a stockholder D. one stockholder selling shares of common stock to another individual The answer is A 3) According to the agency problem, _________ represent the principals of a corporation. A. shareholders B. managers C. employees D. suppliers The answer is A 4) Which of the following is a principle of basic financial management? A. Risk/return tradeoff B. Derivatives