FIN305 – Week 2 Exam 1
Due: May 25 at 8:59 PM
Points: 100
Questions: 29
Time Limit: 75 minutes
Requires: Respondus LockDown Browser + Webcam
Instructions
Exam 1 covers Chapters 1–3 (including Federal Reserve content) and the
videos from Weeks 1 & 2. The timer is set for 1 hour and 15 minutes. The
exam consists of:
23 multiple choice questions (some skipped; e.g., no Question 5)
3 extra credit multiple choice questions
3 problems (All work and formulas must be shown for credit)
Format: Open book / open notes
Selected Questions & Highlighted Answers
1. Finance can be defined as:
a. the system of debits and credits
b. the science of the production, distribution, and consumption of wealth
c. the art and science of managing money
d. the art of merchandising products and services in a free market economy
2. Which legal form is least expensive to organize?
a. Sole Proprietorships
b. Partnerships
c. Corporations
d. ALL are equally expensive
3. The rate of interest that creates equilibrium between supply and
demand for investment funds:
a. nominal
b. real
c. risk-free
d. inflationary
This study source was downloaded by 100000898717596 from CourseHero.com on 07-18-2025 08:28:34 GMT -05:00
https://www.coursehero.com/file/249807889/FIN305week2-Exam1-5-23-2025docx/
, 4. A graphic depiction of the term structure of interest rates is
called:
a. yield curve
b. supply and demand functions
c. risk/return profile
d. aggregate demand curve
6. Generally, an increase in risk will result in:
a. a lower required rate of return
b. a higher required rate of return
c. no change in the required rate of return
d. an undetermined required rate of return
7. Under which form is ownership readily transferrable?
a. sole proprietorship
b. partnership
c. corporation
d. all of the above have equal transferability
8. The accountant's primary function is:
a. evaluating the financial statements of a company
b. making decisions based on the financial data
c. collection and presentation of financial data
d. planning cash flows
9. The wealth of the owners of a corporation is represented by:
a. profits (net income or net profit)
b. earnings per share of common stock
c. share price
d. cash flow
10. The true owners of a corporation are:
a. board of directors
b. chief executive officer
c. stockholders
d. stakeholders
12. Which form is characterized by limited liability?
a. sole proprietorship
b. partnership
c. corporation
d. professional partnership
This study source was downloaded by 100000898717596 from CourseHero.com on 07-18-2025 08:28:34 GMT -05:00
https://www.coursehero.com/file/249807889/FIN305week2-Exam1-5-23-2025docx/
Due: May 25 at 8:59 PM
Points: 100
Questions: 29
Time Limit: 75 minutes
Requires: Respondus LockDown Browser + Webcam
Instructions
Exam 1 covers Chapters 1–3 (including Federal Reserve content) and the
videos from Weeks 1 & 2. The timer is set for 1 hour and 15 minutes. The
exam consists of:
23 multiple choice questions (some skipped; e.g., no Question 5)
3 extra credit multiple choice questions
3 problems (All work and formulas must be shown for credit)
Format: Open book / open notes
Selected Questions & Highlighted Answers
1. Finance can be defined as:
a. the system of debits and credits
b. the science of the production, distribution, and consumption of wealth
c. the art and science of managing money
d. the art of merchandising products and services in a free market economy
2. Which legal form is least expensive to organize?
a. Sole Proprietorships
b. Partnerships
c. Corporations
d. ALL are equally expensive
3. The rate of interest that creates equilibrium between supply and
demand for investment funds:
a. nominal
b. real
c. risk-free
d. inflationary
This study source was downloaded by 100000898717596 from CourseHero.com on 07-18-2025 08:28:34 GMT -05:00
https://www.coursehero.com/file/249807889/FIN305week2-Exam1-5-23-2025docx/
, 4. A graphic depiction of the term structure of interest rates is
called:
a. yield curve
b. supply and demand functions
c. risk/return profile
d. aggregate demand curve
6. Generally, an increase in risk will result in:
a. a lower required rate of return
b. a higher required rate of return
c. no change in the required rate of return
d. an undetermined required rate of return
7. Under which form is ownership readily transferrable?
a. sole proprietorship
b. partnership
c. corporation
d. all of the above have equal transferability
8. The accountant's primary function is:
a. evaluating the financial statements of a company
b. making decisions based on the financial data
c. collection and presentation of financial data
d. planning cash flows
9. The wealth of the owners of a corporation is represented by:
a. profits (net income or net profit)
b. earnings per share of common stock
c. share price
d. cash flow
10. The true owners of a corporation are:
a. board of directors
b. chief executive officer
c. stockholders
d. stakeholders
12. Which form is characterized by limited liability?
a. sole proprietorship
b. partnership
c. corporation
d. professional partnership
This study source was downloaded by 100000898717596 from CourseHero.com on 07-18-2025 08:28:34 GMT -05:00
https://www.coursehero.com/file/249807889/FIN305week2-Exam1-5-23-2025docx/
