Question 1

Which one of the following statements is correct?

Accepted Answer

A)   All of the major stock exchanges are U.S. based.
B)   The NYSE was created by the National Association of Securities Dealers in the early 1970's.
C)   The American Stock Exchange is a dealer market.
D)   OTC markets have a physical trading floor generally located in either New York City or Chicago.
E)   The primary purpose of the NYSE is to match buyers with sellers.F) A) and B)
G) A) and C)

Question 2

Valerie bought 200 shares of Able stock today. Able stock has been trading for some time on the NYSE. Valerie's purchase occurred in which market?

Accepted Answer

A)   Dealer market
B)   Over-the-counter market
C)   Secondary market
D)   Primary market
E)   Tertiary marketF) D) and E)
G) A) and B)

Question 3

Will and Bill both enjoy sunshine, water, and surfboards. Thus, the two friends decided to create a business together renting surfboards, paddle boats, and inflatable devices in California. Will and Bill will equally share in the decision making and in the profits or losses. Which type of business did they create if they both have full personal liability for the firm's debts?

Accepted Answer

A)   Sole proprietorship
B)   Limited partnership
C)   Corporation
D)   Joint stock company
E)   General partnershipF) A) and C)
G) A) and B)

Question 4

The Sarbanes-Oxley Act in 2002 was prompted by which one of the following from the 1990's?

Accepted Answer

A)   Increased stock market volatility
B)   Corporate accounting and financial fraud
C)   Increased executive compensation
D)   Increased foreign investment in U.S. stock markets
E)   Increased use of tax loopholesF) B) and E)
G) C) and E)

Question 5

Which one of the following situations is most apt to create an agency conflict?

Accepted Answer

A)   Compensating a manager based on his or her division's net income
B)   Giving all employees a bonus if a certain level of efficiency is maintained
C)   Hiring an independent consultant to study the operating efficiency of the firm
D)   Rejecting a profitable project to protect employee jobs
E)   Selling an underproducing segment of the firmF) A) and B)
G) C) and E)

Question 6

A limited liability company:

Accepted Answer

A)   is a hybrid between a sole proprietorship and a partnership.
B)   prefers its profits be taxed as personal income to its owners.
C)   that meets the IRS criteria to be an LLC will be taxed like a corporation.
D)   provides limited liability for some, but not all, of its owners.
E)   cannot be created for professional service firms, such as accountants and attorneys.F) C) and D)
G) B) and E)

Question 7

The potential conflict of interest between a firm's owners and its managers is referred to as which type of conflict?

Accepted Answer

A)   Organizational
B)   Structure
C)   Formation
D)   Agency
E)   TerritorialF) None of the above
G) A) and D)

Question 8

Which of the following are effective means of aligning management goals with shareholder interests? I. Employee stock options
II)  Threat of a takeover
III)  Management bonuses tied to performance goals
IV)  Threat of a proxy fight

Accepted Answer

A)   I and III only
B)   II and IV only
C)   I, II, and III only
D)   I, III, and IV only
E)   I, II, III, and IVF) A) and B)
G) C) and E)

Question 9

Which one of the following is most apt to create a situation where an agency conflict could arise?

Accepted Answer

A)   Increasing the size of a firm's operations
B)   Downsizing a firm
C)   Separating management from ownership
D)   Decreasing employee turnover
E)   Reducing both management and non-management salariesF) A) and C)
G) A) and B)

Question 10

The Sarbanes-Oxley Act of 2002 has:

Accepted Answer

A)   reduced the annual compliance costs of all publicly traded firms in the U.S.
B)   decreased senior management's involvement in the corporate annual report.
C)   greatly increased the number of U.S. firms that are going public for the first time.
D)   decreased the number of U.S. firms going public on foreign exchanges.
E)   made officers of publicly traded firms personally responsible for the firm's financial statements.F) C) and E)
G) A) and E)

Question 11

Jamie is employed as a commercial loan officer for a regional bank centered in the Midwestern section of the U.S. Her job falls into which one of the following areas of finance?

Accepted Answer

A)   International finance
B)   Financial institutions
C)   Corporate finance
D)   Capital management
E)   InvestmentsF) A) and B)
G) C) and D)

Question 12

Which one of the following best matches the primary goal of financial management?

Accepted Answer

A)   Increasing the dollar amount of each sale
B)   Increasing traffic flow within the firm's stores
C)   Transforming fixed costs into variable costs
D)   Increasing the firm's liquidity
E)   Increasing the market value of firmF) A) and D)
G) A) and E)

Question 13

Which one of the following is contained in the corporate bylaws?

Accepted Answer

A)   Procedures for electing corporate directors
B)   State of incorporation
C)   Number of authorized shares
D)   Intended life of the corporation
E)   Business purpose of the corporationF) None of the above
G) B) and E)

Question 14

Which one of the following best describes the primary intent of the Sarbanes-Oxley Act of 2002?

Accepted Answer

A)   Increase the costs of going public
B)   Increase protection against corporate fraud
C)   Limit secondary issues of corporate securities
D)   Decrease the number of publicly traded firms
E)   Increase the number of firms that "go dark"F) A) and C)
G) A) and B)

Question 15

In a general partnership, each partner is personally liable for:

Accepted Answer

A)   the partnership debts that he or she created.
B)   his or her proportionate share of all partnership debts regardless of which partner incurred that debt.
C)   the total debts of the partnership, even if he or she was unaware of those debts.
D)   the debts of the partnership up to the amount he or she invested in the firm.
E)   all personal and partnership debts incurred by any partner, even if he or she was unaware of those debts.F) B) and D)
G) A) and E)

Question 16

Which one of the following statements is correct?

Accepted Answer

A)   All secondary markets are dealer markets.
B)   All secondary markets are broker markets.
C)   All stock trades between existing shareholders are secondary market transactions.
D)   All stock transactions are secondary market transactions.
E)   All Dutch auction sales are secondary market transactions.F) C) and D)
G) B) and D)

Question 17

Explain the primary goal of the Sarbanes-Oxley Act in 2002 and discuss whether or not this act appears to be effectively meeting that goal.

Accepted Answer

The primary goal of the Sarbanes-Oxley A...

Question 18

Which one of the following is an advantage of being a limited partner?

Accepted Answer

A)   Non-taxable share of any profits
B)   Control over the daily operations of the firm
C)   Losses limited to capital invested
D)   Unlimited profits without risk of incurring a loss
E)   Active market for ownership interestF) B) and D)
G) A) and E)

Question 19

Which one of the following is a general characteristic of a securities broker?

Accepted Answer

A)   Trades from his or her own inventory
B)   Trades only foreign securities
C)   Trades listed securities in an auction market
D)   Trades electronically from any geographic location
E)   Is the principal trader of debt securitiesF) None of the above
G) A) and B)

Question 20

Which one of the following transactions occurred in the primary market?

Accepted Answer

A)   Maria gave 100 shares of Alto stock to her best friend.
B)   Gene purchased 300 shares of Alto stock from Ted.
C)   South Wind Products sold 1,000 shares of newly issued stock to Mike.
D)   Terry sold 3,000 shares of Uno stock to his brother.
E)   The president of Trecco, Inc. sold 500 shares of Trecco stock to his son.F) A) and B)
G) A) and E)

Exam 1: Introduction to Financial Management

Which one of the following best describes the primary intent of the Sarbanes-Oxley Act of 2002?

Correct Answer
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Jamie is employed as a commercial loan officer for a regional bank centered in the Midwestern section of the U.S. Her job falls into which one of the following areas of finance?

Correct Answer
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Which one of the following is most apt to create a situation where an agency conflict could arise?

Correct Answer
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A limited liability company:

Correct Answer
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Which of the following are effective means of aligning management goals with shareholder interests? I. Employee stock options II) Threat of a takeover III) Management bonuses tied to performance goals IV) Threat of a proxy fight

Correct Answer
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The potential conflict of interest between a firm's owners and its managers is referred to as which type of conflict?

Correct Answer
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Explain the primary goal of the Sarbanes-Oxley Act in 2002 and discuss whether or not this act appears to be effectively meeting that goal.

Correct Answer
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The primary goal of the Sarbanes-Oxley A...
View Answer

Which one of the following statements is correct?

Correct Answer
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Valerie bought 200 shares of Able stock today. Able stock has been trading for some time on the NYSE. Valerie's purchase occurred in which market?

Correct Answer
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The Sarbanes-Oxley Act of 2002 has:

Correct Answer
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Which one of the following best matches the primary goal of financial management?

Correct Answer
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Which one of the following is an advantage of being a limited partner?

Correct Answer
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Which one of the following transactions occurred in the primary market?

Correct Answer
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Correct Answer
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Which one of the following is contained in the corporate bylaws?

Correct Answer
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The Sarbanes-Oxley Act in 2002 was prompted by which one of the following from the 1990's?

Correct Answer
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In a general partnership, each partner is personally liable for:

Correct Answer
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Which one of the following is a general characteristic of a securities broker?

Correct Answer
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Which one of the following situations is most apt to create an agency conflict?

Correct Answer
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Which one of the following statements is correct?

Correct Answer
verified

Exam 1: Introduction to Financial Management

Which one of the following best describes the primary intent of the Sarbanes-Oxley Act of 2002?

Correct AnswerverifiedShow Answer

Jamie is employed as a commercial loan officer for a regional bank centered in the Midwestern section of the U.S. Her job falls into which one of the following areas of finance?

Correct AnswerverifiedShow Answer

Which one of the following is most apt to create a situation where an agency conflict could arise?

Correct AnswerverifiedShow Answer

A limited liability company:

Correct AnswerverifiedShow Answer

Which of the following are effective means of aligning management goals with shareholder interests? I. Employee stock options II) Threat of a takeover III) Management bonuses tied to performance goals IV) Threat of a proxy fight

Correct AnswerverifiedShow Answer

The potential conflict of interest between a firm's owners and its managers is referred to as which type of conflict?

Correct AnswerverifiedShow Answer

Explain the primary goal of the Sarbanes-Oxley Act in 2002 and discuss whether or not this act appears to be effectively meeting that goal.

Correct AnswerverifiedThe primary goal of the Sarbanes-Oxley A...View AnswerShow Answer

Which one of the following statements is correct?

Correct AnswerverifiedShow Answer

Valerie bought 200 shares of Able stock today. Able stock has been trading for some time on the NYSE. Valerie's purchase occurred in which market?

Correct AnswerverifiedShow Answer

The Sarbanes-Oxley Act of 2002 has:

Correct AnswerverifiedShow Answer

Which one of the following best matches the primary goal of financial management?

Correct AnswerverifiedShow Answer

Which one of the following is an advantage of being a limited partner?

Correct AnswerverifiedShow Answer

Which one of the following transactions occurred in the primary market?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which one of the following is contained in the corporate bylaws?

Correct AnswerverifiedShow Answer

The Sarbanes-Oxley Act in 2002 was prompted by which one of the following from the 1990's?

Correct AnswerverifiedShow Answer

In a general partnership, each partner is personally liable for:

Correct AnswerverifiedShow Answer

Which one of the following is a general characteristic of a securities broker?

Correct AnswerverifiedShow Answer

Which one of the following situations is most apt to create an agency conflict?

Correct AnswerverifiedShow Answer

Which one of the following statements is correct?

Correct AnswerverifiedShow Answer

Correct Answer
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The primary goal of the Sarbanes-Oxley A...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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