FNAN 522 Exam 1 Review – Complete Finance Study Guide & Practice
Test (2026)
A company issued debt that did not grant the bondholders the ability to seize the company's
assets to settle the obligation. This debt can be traded on a public exchange. Which of the
following best describes this debt? - correct answer ✔✔Public, unsecured debt.
Which of the following is NOT a cash equivalent? - correct answer ✔✔A government bond that
matures in four months.
Which of the following occurred during the financial crisis of 2007-2008? - correct answer
✔✔All of these answers
Which of the following statements regarding shareholder and market value is correct? - correct
answer ✔✔The idea of maximizing market value is related to the idea of maximizing
shareholder value.
How is finance used in organizations? - correct answer ✔✔All of these answers.
Which of the following terms describes the protection of personal assets stemming from the
corporate structure? - correct answer ✔✔limited liability
Which of the following is a factor that contributes to the conflict of interest between a
company's bondholders and its shareholders? - correct answer ✔✔All of these answers
Which of the following is a legal characteristic of a general partnership? - correct answer
✔✔There must be at least two business owners.
Which of the following is a type of financial market? - correct answer ✔✔All of these answers
, Which of the following is an accurate characteristic of a sole proprietorship? - correct answer
✔✔The owner is personally liable for the business's debt and obligations.
A company issues a bond with the provision that it may pay off the debt early. This bond is
subject to which type of risk? - correct answer ✔✔Prepayment risk.
What will $247,000 grow to be in 9 years if it is invested today in an account with an annual
interest rate of 11%? - correct answer ✔✔631,835.12
Approximately how many years will it take for $136,000 to grow to be $468,000 if it is invested
in an account with an annual interest rate of 8%? Choose the closest answer. - correct answer
✔✔16 years.
At what annual interest rate must $137,000 be invested so that it will grow to be $475,000 in 14
years? Choose the closest rate. - correct answer ✔✔9.29%
If you wish to accumulate $197,000 in 5 years, how much must you deposit today in an account
that pays a quoted annual interest rate of 13% with semi-annual compounding of interest?
Round to the nearest dollar. - correct answer ✔✔$104,947
What will $153,000 grow to be in 13 years if it is invested today in an account with a quoted
annual interest rate of 10% with monthly compounding of interest? Round to the nearest dollar.
- correct answer ✔✔$558,386
You are offered an investment with a quoted annual interest rate of 13% with quarterly
compounding of interest. What is your effective annual interest rate? - correct answer
✔✔13.65%
Test (2026)
A company issued debt that did not grant the bondholders the ability to seize the company's
assets to settle the obligation. This debt can be traded on a public exchange. Which of the
following best describes this debt? - correct answer ✔✔Public, unsecured debt.
Which of the following is NOT a cash equivalent? - correct answer ✔✔A government bond that
matures in four months.
Which of the following occurred during the financial crisis of 2007-2008? - correct answer
✔✔All of these answers
Which of the following statements regarding shareholder and market value is correct? - correct
answer ✔✔The idea of maximizing market value is related to the idea of maximizing
shareholder value.
How is finance used in organizations? - correct answer ✔✔All of these answers.
Which of the following terms describes the protection of personal assets stemming from the
corporate structure? - correct answer ✔✔limited liability
Which of the following is a factor that contributes to the conflict of interest between a
company's bondholders and its shareholders? - correct answer ✔✔All of these answers
Which of the following is a legal characteristic of a general partnership? - correct answer
✔✔There must be at least two business owners.
Which of the following is a type of financial market? - correct answer ✔✔All of these answers
, Which of the following is an accurate characteristic of a sole proprietorship? - correct answer
✔✔The owner is personally liable for the business's debt and obligations.
A company issues a bond with the provision that it may pay off the debt early. This bond is
subject to which type of risk? - correct answer ✔✔Prepayment risk.
What will $247,000 grow to be in 9 years if it is invested today in an account with an annual
interest rate of 11%? - correct answer ✔✔631,835.12
Approximately how many years will it take for $136,000 to grow to be $468,000 if it is invested
in an account with an annual interest rate of 8%? Choose the closest answer. - correct answer
✔✔16 years.
At what annual interest rate must $137,000 be invested so that it will grow to be $475,000 in 14
years? Choose the closest rate. - correct answer ✔✔9.29%
If you wish to accumulate $197,000 in 5 years, how much must you deposit today in an account
that pays a quoted annual interest rate of 13% with semi-annual compounding of interest?
Round to the nearest dollar. - correct answer ✔✔$104,947
What will $153,000 grow to be in 13 years if it is invested today in an account with a quoted
annual interest rate of 10% with monthly compounding of interest? Round to the nearest dollar.
- correct answer ✔✔$558,386
You are offered an investment with a quoted annual interest rate of 13% with quarterly
compounding of interest. What is your effective annual interest rate? - correct answer
✔✔13.65%
