Bus 530 Week 3 Quiz
BUS 530 FINancial Management
Homework 1
Note: Your answer for homework 1 must be or handed in class within 10 minutes of Wednesday class (1:10PM), January 25, 2012. No late assignment will be accepted. You only need to answer the questions in black.
Name: qinyu wu
Part I MULTIPLE CHOICE QUESTIONS (2’ × 21 =42’)
( A ) 1. The principal-agent problem
A. Occurs when managers have more incentive to maximize profits than the stockholders-owners do.
B. Would not arise if the owners of the firm had complete information about the activities of the managers.
C. In financial markets helps to explain why equity is a relatively important source of finance for American business.
D. All of the above.
E. Only A and B of the above.
( B ) 2. In a partnership form of …show more content…
Shareholders have no tax liability.
B. Shares are held by the federal or state government.
C. Stock is widely traded.
D. Products or services are available to the public.
( A ) 9. In which of the following organizations would it be least likely to find the existence of agency problems?
A. A sole proprietorship.
B. A partnership.
C. A corporation.
D. A closely held corporation.
( B ) 10. Which of the following is least likely to represent an agency problem?
A. Lavish spending on expense accounts.
B. Plush remodeling of the executive suite.
C. Excessive investment in "safe" projects.
D. Executive incentive compensation plans.
( D ) 11. Money market securities generally have _______ liquidity. Capital market securities are typically expected to have a _______ annualized return.
A. Less; higher
B. More; lower
C. Less; lower
D. More; higher
( C ) 12. A dealer offers to buy shares of IBM at $126 and sell to investors at $128. The bid-ask spread is:
A. $126
B. $128
C. $2
D. none of the above
( C ) 13. Which of the following is not an example of capital market securities?
A. Common stocks
B. Convertible bonds
C. Commercial paper
D.
Homework 1
Note: Your answer for homework 1 must be or handed in class within 10 minutes of Wednesday class (1:10PM), January 25, 2012. No late assignment will be accepted. You only need to answer the questions in black.
Name: qinyu wu
Part I MULTIPLE CHOICE QUESTIONS (2’ × 21 =42’)
( A ) 1. The principal-agent problem
A. Occurs when managers have more incentive to maximize profits than the stockholders-owners do.
B. Would not arise if the owners of the firm had complete information about the activities of the managers.
C. In financial markets helps to explain why equity is a relatively important source of finance for American business.
D. All of the above.
E. Only A and B of the above.
( B ) 2. In a partnership form of …show more content…
Shareholders have no tax liability.
B. Shares are held by the federal or state government.
C. Stock is widely traded.
D. Products or services are available to the public.
( A ) 9. In which of the following organizations would it be least likely to find the existence of agency problems?
A. A sole proprietorship.
B. A partnership.
C. A corporation.
D. A closely held corporation.
( B ) 10. Which of the following is least likely to represent an agency problem?
A. Lavish spending on expense accounts.
B. Plush remodeling of the executive suite.
C. Excessive investment in "safe" projects.
D. Executive incentive compensation plans.
( D ) 11. Money market securities generally have _______ liquidity. Capital market securities are typically expected to have a _______ annualized return.
A. Less; higher
B. More; lower
C. Less; lower
D. More; higher
( C ) 12. A dealer offers to buy shares of IBM at $126 and sell to investors at $128. The bid-ask spread is:
A. $126
B. $128
C. $2
D. none of the above
( C ) 13. Which of the following is not an example of capital market securities?
A. Common stocks
B. Convertible bonds
C. Commercial paper
D.