chapter 1 Word Scramble
T I X S G N I E
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| Question | Answer |
| The primary goal of financial management is to maximize the: | market value of the existing stock. |
| Which one of the following statements is correct concerning the organizational chart of a corporation? | The tax manager generally reports to the controller rather than the treasurer. |
| Which one of the following statements is correct concerning the financial markets in the U.S.? | The NYSE lists significantly less companies than does NASDAQ. |
| Any situation where a potential conflict can arise between the firm’s owners and its managers is referred to as a(n): | agency problem. |
| A business organization that is similar to a sole proprietorship but has two or more owners is called a: | a partnership agreement |
| When a firm decides to borrow money rather than issue stock to raise funds for a new project, the company is making a(n) __________ decision. | capital structure |
| The process of managing a firm’s long-term investments is called: | capital budgeting |
| An agency problem frequently exists in situations where there is a separation of: | company ownership and company management. |
| Which one of the following transactions occurs in the primary market? | POQ sells new shares of POQ to Frederico |
| Which one of the following actions best matches the primary goal of financial management? | increasing the market value of the equity by improving the efficiency of operations |
| The bylaws of a corporation include information such as the: | method by which directors are elected |
| Under a general partnership,: | each partner receives only a proportionate share of the profits but is responsible for 100 percent of the partnership debts |
| The top financial officer in a firm is commonly referred to as the: | chief financial officer. |
| A sole proprietorship is defined as a business: | that is owned by a single individual. |
| The control of a corporation ultimately lies with the: | company stockholders. |
| The person who is in charge of cash management and capital expenditures is called the: | treasurer. |
| Business finance addresses which one of the following questions? | Which long-term assets should a firm acquire? |
| A negotiated sale of securities by an issuer to a specific buyer is called a(n): | private placement |
| The sale of securities to the general public by the issuer is known as a: | public offering. |
| The financial markets in the U.S.: | transact trades in both the primary and the secondary markets. |
| A corporation: | may be considered a resident of an individual state. |
| Short-term assets and short-term liabilities are referred to as the firm’s: | working capital |
| Working capital management includes which of the following? I. controlling the inventory level II. determining when to pay suppliers III. deciding how much long-term debt to assume IV. controlling the amount of cash that is readily available | I, II, and IV only |
| A securities market with a physical location that is designed to match buyers with sellers is called a(n) __________ market. | auction |
| Which one of the following situations is most apt to create an agency problem? | a manager receives a bonus because he or she has hired the most new employees in the past year |
| Which of the following are careers in finance? I. insurance agent II. security analyst III. portfolio manager IV. corporate treasurer | I, II, III, and IV |
| The market for trading securities after the original sale is called the: | secondary market. |
| When a company qualifies to have its securities traded on a particular exchange the stock of that company is said to be __________ with the exchange. | listed |
| The legal papers which designate a firm’s name, nature of business, and intended life are called the: | articles of incorporation. |
| Which one of the following statements is correct concerning the secondary markets? | Secondary markets can be either dealer or auction markets. |
| The general purpose of a limited liability company is to: I. be taxed like a partnership. II. be taxed like a corporation. III. provide unlimited liability for the owners. IV. provide limited liability for the owners. | I and IV only |
| The most widely used form of business entity in the U.S. is the: | sole proprietorship. |
| All large company stocks such as General Electric and Microsoft: | can trade on the exchange of their choosing as long as they qualify for listing. |
| Over-the-counter markets are __________ markets. | dealer |
| Which of the following are considered financial institutions? I. bank II. hospital III. insurance company IV. home builder | I and III only |
| A limited liability company can be defined as a: | cross between a partnership and a corporation. |
| A sole proprietor | assumes personal liability for all of the debts of the business. |
| Which one of the following questions falls into the financial topic of investments? | What are the risks involved with owning a particular security? |
| The daily financial operations of a firm are primarily controlled by managing the __________ of the firm. | working capital |
| The term used to describe the study of means by which a manager can determine which long-term investments to pursue, how to pay for those investments, and how to manage the daily finances of a firm is: | business finance |
| Anyone other than the firm’s stockholders or creditors that might have a claim on the cash flows of a firm is called a: | stakeholder. |
| The primary advantages of a limited liability company are the: | means of taxation and the limits on the liabilities assumed by the owners. |
| NASDAQ is: I. located in Chicago. II. an auction market. III. an over-the-counter market. IV. a private placement market. | III only |
| The management of a firm’s cash, inventory, and payables is referred to as | working capital management. |
| The Sarbanes-Oxley Act: | makes the officers of a public corporation personally responsible for the firm’s financial statements. |
| The amount of debt and equity used by a firm to finance its operations is called the firm’s: | capital structure |
| Which one of the following statements about a limited partnership is correct? | A limited partner can sell his or her interest without the partnership dissolving. |
| A business entity which is treated as a legal “person” is called a: | corporation. |
| The Sarbanes-Oxley Act was enacted: | to help protect investors and others from financial malpractice. |
| The capital structure of a firm refers to the firm’s: | long-term debt and equity |
| Which one of the following functions should be assigned to the controller rather than the treasurer? | Which one of the following functions should be assigned to the controller rather than the treasurer? |
| The primary market refers to: | the original sale of securities by the issuer. |
| The rules which outline how a corporation will regulate itself are referred to as the: | bylaws. |
| The purpose of capital budgeting is to: | identify assets that produce value in excess of their cost. |
| Which of the following are characteristics of a dealer market? I. buyers purchase securities for themselves at their own risk II. the market matches buyers with sellers III. transactions are carried out on a physical trading floor IV. transactions | I and IV only |
| The advantage of being a limited partner in a limited partnership is the ability to | invest in a partnership while limiting your loses to the amount you invested |
| In a general partnership, each general partner is personally liable for: | the total debts of the partnership, even if he or she was unaware that said debts were incurred. |
| Which one of the following statements is related to capital budgeting? | A firm should consider the size, risk, and timing of an asset’s cash flows before deciding to purchase that asset. |
Created by:
martin.2021