SOPHIA PATHWAYS
Introduction to Business
Milestone 4
20 questions were answered correctly.
1- Which of the following is true about retained earnings?
● Lower retained earnings makes a company more attractive to investors.
● Lower retained earnings cause a decrease in the stock price.
● Higher retained earnings means investors receive lower dividends.
● Higher retained earnings means investors receive higher dividends.
CONCEPT
Equity Financing
2-Which of the following does a low current ratio indicate about a business?
● The business will exceed its financial goals.
● The business will increase its spending power.
● The business will accept low levels of risk.
● The business will have difficulty repaying debts.
CONCEPT
Budgeting
3-Which of the types of short term loans below requires the borrower to pay a specific
amount of money to the lender on a specific date?
● Mortgage bond
● Debenture bond
● Trade credit
, ● Promissory note
CONCEPT
Trade Credit and Promissory Notes
4-Which of the following is true, regarding the risk return relationship?
● A conservative investment is the riskiest type of investment.
● An aggressive investment is less likely to involve a lot of risk.
● A conservative investment is more likely to have the highest return.
● An aggressive investment is likely to have the highest return.
CONCEPT
Investors and Private Placement
5-Which of the following is true regarding risk management?
● Large companies are more likely to require risk management plans.
● Speculative risks are usually associated with natural disasters.
● Large and small companies need to manage issues with speculative risks.
● Pure risk typically results in potential gains for an organization.
CONCEPT
Risk Management
6-Which of the following is true regarding discount rate controls?
● The lower the discount rate a bank has to pay, the more likely the health of the economy
has declined.
● The higher the discount rate a bank has to pay, the more money there is in supply.
● The higher the discount rate a bank has to pay, the less willing a bank will be to lend
money.
● The lower the discount rate a bank has to pay, the more difficult it becomes
for consumers to borrow money.
CONCEPT
Federal Reserve
7-Which of the types of companies below is more likely to use secured short term
financing?
● A company with an excellent credit history
● A company that has little collateral to provide to obtain a loan
● A company that provides services rather than products
● A company with a poor credit rating
CONCEPT
Secured Short Term Financing
Introduction to Business
Milestone 4
20 questions were answered correctly.
1- Which of the following is true about retained earnings?
● Lower retained earnings makes a company more attractive to investors.
● Lower retained earnings cause a decrease in the stock price.
● Higher retained earnings means investors receive lower dividends.
● Higher retained earnings means investors receive higher dividends.
CONCEPT
Equity Financing
2-Which of the following does a low current ratio indicate about a business?
● The business will exceed its financial goals.
● The business will increase its spending power.
● The business will accept low levels of risk.
● The business will have difficulty repaying debts.
CONCEPT
Budgeting
3-Which of the types of short term loans below requires the borrower to pay a specific
amount of money to the lender on a specific date?
● Mortgage bond
● Debenture bond
● Trade credit
, ● Promissory note
CONCEPT
Trade Credit and Promissory Notes
4-Which of the following is true, regarding the risk return relationship?
● A conservative investment is the riskiest type of investment.
● An aggressive investment is less likely to involve a lot of risk.
● A conservative investment is more likely to have the highest return.
● An aggressive investment is likely to have the highest return.
CONCEPT
Investors and Private Placement
5-Which of the following is true regarding risk management?
● Large companies are more likely to require risk management plans.
● Speculative risks are usually associated with natural disasters.
● Large and small companies need to manage issues with speculative risks.
● Pure risk typically results in potential gains for an organization.
CONCEPT
Risk Management
6-Which of the following is true regarding discount rate controls?
● The lower the discount rate a bank has to pay, the more likely the health of the economy
has declined.
● The higher the discount rate a bank has to pay, the more money there is in supply.
● The higher the discount rate a bank has to pay, the less willing a bank will be to lend
money.
● The lower the discount rate a bank has to pay, the more difficult it becomes
for consumers to borrow money.
CONCEPT
Federal Reserve
7-Which of the types of companies below is more likely to use secured short term
financing?
● A company with an excellent credit history
● A company that has little collateral to provide to obtain a loan
● A company that provides services rather than products
● A company with a poor credit rating
CONCEPT
Secured Short Term Financing
