TEST BANK FOR
m m
FinancemApplicationsmand mTheorym6emCornett
Chapter 1-20 Answers are at the end of Each chapter
m m m m m m m m m
Chapter 1 m
Student name:
m
Whichmstatements(s)mis/aremtruemformsuccessfulmapplicationmof mfinancialmtheories?
Themeconomymwillmbemmoremproductive.
Individual’smwealthmwillmgrow.
Themeconomymwillmbemmoremproductivemand mindividual'smwealthmwillmgrow.
Nonemof mthesemchoicesmaremcorrect.
Not mallmcashmamcompanymgeneratesmwillmbemreturned mtomtheminvestors.mWhichmof mthemfollowingm
willmNOTmreducemthemamount mof mcapitalmreturned mtomtheminvestors?
retained mearnings
taxes
dividends
Thismsubareamof mfinanceminvolvesmmethodsmand mtechniquesmtommakemappropriatemdecisionsm about m
what mkindsmof msecuritiesmtomown,mwhichmfirms'msecuritiesmtombuy,mand mhowmtombempaid mbackminm
themformmthat mtheminvestormwishes.
realmmarkets
investments
financialmmanagement
Thismsubareamof mfinancemlooksmat mfirmmdecisionsminmacquiringmand mutilizingmcashm received mfrommi
nvestorsmormfrommretained mearnings.
investments
financialmmanagement
financialminstitutionsmand mmarkets
,Financialmmanagement minvolvesmdecisionsmabout mwhichmof mthemfollowing?
Whichmprojectsmtomfund
How mtomminimizemtaxation
What mtypemof mcapitalmshould mbemraised
Allmof mthesemchoicesmaremcorrect.
Thismsubareamof mfinancemhelpsmfacilitatemthemcapitalmflowsmbetweenminvestorsmand mcompanies.
investments
financialmmanagement
treasurymmanagement
financialminstitutionsmand mmarkets
Thismsubareamof mfinancemismimportant mformadaptingmtomthemglobalmeconomy.
investments
financialmmanagement
internationalmfinance
financialminstitutionsmand mmarkets
Ampotentialmfuturemnegativemimpact mtomvaluemand/ormcashmflowsmismoftenmdiscussed minmtermsmof m
probabilitymof mlossmand mthemexpected mmagnitudemof mthemloss.mThismismcalled
options.
standard mdeviation.
coefficient mof mvariation.
risk.
Thismismamtermmtomdescribemnon-
physicalmassetsmlikemstocksmand mbondsmthat mget mtheirmvaluemfrommfuturemcashmflows.
investment
financialmasset
realmasset
financialmmarkets
,Whichmof mthemfollowingmismdefined masmamgroupmof msecuritiesmthat mexhibit msimilarmcharacteristics,m
behavemsimilarlyminmthemmarketplace,m and maremsubject mtomthemsamem lawsmand mregulations?
investments
asset mclasses
market minstruments
financialmmarkets
Themmost mcommonlymaccepted mgroupsmof masset mclassesmincludemallmof mthemfollowingmexcept
stocks.
bonds.
machinerymand mequipment.
realmestate.
Them
ismtheminterest mratemat mwhichmbanksmand mothermdepositoryminstitutionsmlend mre
servembalancesmtomonemanothermovernight;mthismratemheavilyminfluencesmothermshort-termmrates.
averagemtaxmrate
exchangemrate
federalmfundsmrate
nonemof mthesemchoicesmaremcorrect.
Whichmof mthemfollowingmstatementsmregardingmquantitativemeasingm(QE)maremtrue?
QEmismammonetarympolicymdesigned mtomincreasemthemmoneymsupplyminmthemeconomymt
hroughmbuyingmsecuritiesminmthemmarket mand mloweringmshort-termm interest mrates.
Themfirst mround mof mQEminvolved mthemFed mtompurchasempotentiallymtoxicmmortgage-
backed msecuritiesmfrommbanks.
Duringmearlym2020mduemtomthemCOVID-
19mpandemic,mthemFed mdropped mthemfederalmfundsmratemtom1.25%mand mthenmagainm0.25m
amfew mmonthsmlater.
Allmof mthesemchoicesmaremcorrect.
Whichmof mthemfollowingmismthemfirm'smhighest-levelmfinancialmmanager?
chief mexecutivemofficer
chief mfinancialmofficer
board mof mdirectors
corporatemgovernance
, Whichmof mthemfollowingmmanagersmwould mNOTmusemfinancemprimarily?
operationalmmanagers
marketingmmanagers
humanmresourcemmanagers
allmof mthesemchoicesmaremcorrect.
Whichmof mthemfollowingmpersonalmdecisionsmismimpacted mbymfinance?
borrowingmmoneymtompurchasemcarsmormhomes
makingmcredit mcard mpayments
makingmretirement mdecisions
allmof mthesemchoicesmaremcorrect.
Whenmdeterminingmamformmof mbusinessmorganization,mallmof mthemfollowingmaremconsidered
EXCEPT
whomownsmthemfirm.
themowners'mrisks.
themtaxmramifications.
themphysicalmlocationmof mthembusiness.
Thismtypemof mbusinessmorganizationmismrelativelymeasymtomstart,mand mit mismsubject mtommuchmlighterm
regulatorymand mpaperworkmburdenmthanmothermbusinessmforms.
solemproprietorship
partnership
corporation
hybrid morganization
Thismtypemof mbusinessmorganizationmismentirelymlegallym independent mfrommitsmowners.
solemproprietorship
partnership
publicmcorporations
hybrid morganizations
m m
FinancemApplicationsmand mTheorym6emCornett
Chapter 1-20 Answers are at the end of Each chapter
m m m m m m m m m
Chapter 1 m
Student name:
m
Whichmstatements(s)mis/aremtruemformsuccessfulmapplicationmof mfinancialmtheories?
Themeconomymwillmbemmoremproductive.
Individual’smwealthmwillmgrow.
Themeconomymwillmbemmoremproductivemand mindividual'smwealthmwillmgrow.
Nonemof mthesemchoicesmaremcorrect.
Not mallmcashmamcompanymgeneratesmwillmbemreturned mtomtheminvestors.mWhichmof mthemfollowingm
willmNOTmreducemthemamount mof mcapitalmreturned mtomtheminvestors?
retained mearnings
taxes
dividends
Thismsubareamof mfinanceminvolvesmmethodsmand mtechniquesmtommakemappropriatemdecisionsm about m
what mkindsmof msecuritiesmtomown,mwhichmfirms'msecuritiesmtombuy,mand mhowmtombempaid mbackminm
themformmthat mtheminvestormwishes.
realmmarkets
investments
financialmmanagement
Thismsubareamof mfinancemlooksmat mfirmmdecisionsminmacquiringmand mutilizingmcashm received mfrommi
nvestorsmormfrommretained mearnings.
investments
financialmmanagement
financialminstitutionsmand mmarkets
,Financialmmanagement minvolvesmdecisionsmabout mwhichmof mthemfollowing?
Whichmprojectsmtomfund
How mtomminimizemtaxation
What mtypemof mcapitalmshould mbemraised
Allmof mthesemchoicesmaremcorrect.
Thismsubareamof mfinancemhelpsmfacilitatemthemcapitalmflowsmbetweenminvestorsmand mcompanies.
investments
financialmmanagement
treasurymmanagement
financialminstitutionsmand mmarkets
Thismsubareamof mfinancemismimportant mformadaptingmtomthemglobalmeconomy.
investments
financialmmanagement
internationalmfinance
financialminstitutionsmand mmarkets
Ampotentialmfuturemnegativemimpact mtomvaluemand/ormcashmflowsmismoftenmdiscussed minmtermsmof m
probabilitymof mlossmand mthemexpected mmagnitudemof mthemloss.mThismismcalled
options.
standard mdeviation.
coefficient mof mvariation.
risk.
Thismismamtermmtomdescribemnon-
physicalmassetsmlikemstocksmand mbondsmthat mget mtheirmvaluemfrommfuturemcashmflows.
investment
financialmasset
realmasset
financialmmarkets
,Whichmof mthemfollowingmismdefined masmamgroupmof msecuritiesmthat mexhibit msimilarmcharacteristics,m
behavemsimilarlyminmthemmarketplace,m and maremsubject mtomthemsamem lawsmand mregulations?
investments
asset mclasses
market minstruments
financialmmarkets
Themmost mcommonlymaccepted mgroupsmof masset mclassesmincludemallmof mthemfollowingmexcept
stocks.
bonds.
machinerymand mequipment.
realmestate.
Them
ismtheminterest mratemat mwhichmbanksmand mothermdepositoryminstitutionsmlend mre
servembalancesmtomonemanothermovernight;mthismratemheavilyminfluencesmothermshort-termmrates.
averagemtaxmrate
exchangemrate
federalmfundsmrate
nonemof mthesemchoicesmaremcorrect.
Whichmof mthemfollowingmstatementsmregardingmquantitativemeasingm(QE)maremtrue?
QEmismammonetarympolicymdesigned mtomincreasemthemmoneymsupplyminmthemeconomymt
hroughmbuyingmsecuritiesminmthemmarket mand mloweringmshort-termm interest mrates.
Themfirst mround mof mQEminvolved mthemFed mtompurchasempotentiallymtoxicmmortgage-
backed msecuritiesmfrommbanks.
Duringmearlym2020mduemtomthemCOVID-
19mpandemic,mthemFed mdropped mthemfederalmfundsmratemtom1.25%mand mthenmagainm0.25m
amfew mmonthsmlater.
Allmof mthesemchoicesmaremcorrect.
Whichmof mthemfollowingmismthemfirm'smhighest-levelmfinancialmmanager?
chief mexecutivemofficer
chief mfinancialmofficer
board mof mdirectors
corporatemgovernance
, Whichmof mthemfollowingmmanagersmwould mNOTmusemfinancemprimarily?
operationalmmanagers
marketingmmanagers
humanmresourcemmanagers
allmof mthesemchoicesmaremcorrect.
Whichmof mthemfollowingmpersonalmdecisionsmismimpacted mbymfinance?
borrowingmmoneymtompurchasemcarsmormhomes
makingmcredit mcard mpayments
makingmretirement mdecisions
allmof mthesemchoicesmaremcorrect.
Whenmdeterminingmamformmof mbusinessmorganization,mallmof mthemfollowingmaremconsidered
EXCEPT
whomownsmthemfirm.
themowners'mrisks.
themtaxmramifications.
themphysicalmlocationmof mthembusiness.
Thismtypemof mbusinessmorganizationmismrelativelymeasymtomstart,mand mit mismsubject mtommuchmlighterm
regulatorymand mpaperworkmburdenmthanmothermbusinessmforms.
solemproprietorship
partnership
corporation
hybrid morganization
Thismtypemof mbusinessmorganizationmismentirelymlegallym independent mfrommitsmowners.
solemproprietorship
partnership
publicmcorporations
hybrid morganizations
