Finance Exam #1
Exam 1: Chapters 1, 3, and 5
Insider trading occurs when | | someone has information not available to the public which they use to profit from trading in stocks. | | | corporate officers buy stock in their company. | | | lawyers, investment bankers, and others buy common stock in companies represented by their firms. | | | any stock transactions occur in violation of the Federal Trade Commissions restrictions on monopolies. |
The secondary market is used | | by corporations to raise new funds through selling securities. | | | by investors seeking to buy or sell previously-issued securities. | | | by corporations interested in disposing of fixed assets. | | | none of the above. |
Which of the following is true with respect to financial markets? | | Financial markets are separated into short-term and long-term markets. | | | Securities maturing in one year or less trade in the "money" market. | | | Securities maturing in more than one year trade in the "capital" market. | | | All of the above are true. |
Which of the following are among the tasks performed by financial managers? | | Receiving and disbursing funds | | | Making capital budgeting decisions | | | Obtaining funds for acquiring assets | | | All of the above |
Agency problems are least likely to arise in which organizational form? | | sole proprietorship | | | limited partnership | | | corporation | | | subchapter S corporation |
A corporate restructuring can result in | | changes in the capital structure. | | | selling of low-profit margin divisions. | | | reductions in the work force. | | | all of the above. |
Institutional investors are important in today's business world because | | as large investors they have more say in how businesses are managed | | | they have a fiduciary responsibility to the workers and investors that they represent to see that
Insider trading occurs when | | someone has information not available to the public which they use to profit from trading in stocks. | | | corporate officers buy stock in their company. | | | lawyers, investment bankers, and others buy common stock in companies represented by their firms. | | | any stock transactions occur in violation of the Federal Trade Commissions restrictions on monopolies. |
The secondary market is used | | by corporations to raise new funds through selling securities. | | | by investors seeking to buy or sell previously-issued securities. | | | by corporations interested in disposing of fixed assets. | | | none of the above. |
Which of the following is true with respect to financial markets? | | Financial markets are separated into short-term and long-term markets. | | | Securities maturing in one year or less trade in the "money" market. | | | Securities maturing in more than one year trade in the "capital" market. | | | All of the above are true. |
Which of the following are among the tasks performed by financial managers? | | Receiving and disbursing funds | | | Making capital budgeting decisions | | | Obtaining funds for acquiring assets | | | All of the above |
Agency problems are least likely to arise in which organizational form? | | sole proprietorship | | | limited partnership | | | corporation | | | subchapter S corporation |
A corporate restructuring can result in | | changes in the capital structure. | | | selling of low-profit margin divisions. | | | reductions in the work force. | | | all of the above. |
Institutional investors are important in today's business world because | | as large investors they have more say in how businesses are managed | | | they have a fiduciary responsibility to the workers and investors that they represent to see that