FIN 571 Final Exam (2nd Set) 57 Questions with ANSWERS

FIN 571 Final Exam (2nd Set) 57 Questions with ANSWERS -...

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FIN 571 Final Exam. . 1) Refers to situations wherein the agent can take unseen actions for personal benefit even though such actions are costly to the principal. A. adverse selection B. moral hazard C. zero-sum game D. The Behavioral Principle 2) Which of the following statements is true? A. A call option analyzes conflicts of interest and behavior in a principal-agent relationship. B. The difference between the value of one action and the value of the best alternative is called an opportunity cost. C. An agent-manager can never make bad decisions. D. A security is a claim issued by a firm that pays owners interest but not dividends. 3) Refers to situations wherein the agent can take unseen actions for personal benefit even though such actions are costly to the principal. A. adverse selection B. moral hazard C. zero-sum game D. The Behavioral Principle 4) The annual report refers to A. a report issued annually by managers to primarily convey information about select working capital ratios. B. the length of time remaining until an asset's maturity. C. a report issued annually by a firm that includes, at a minimum, an income statement, a balance sheet, a statement of cash flows, and accompanying notes. D. the extent to which something can be sold for cash quickly and easily without loss of value. 5) Remaining maturity refers to: A. the length of an asset's life when it is issued. B. a technical accounting term that encompasses the conventions, rules, and procedures necessary to define accepted accounting practice at a particular time. C. a report issued annually by a firm that includes, at a minimum, an income statement, a balance sheet, a statement of cash flows, and accompanying notes. D. the amount of time remaining until its maturity. 6) Generally accepted accounting principles (GAAP) refers to A. the length of an asset's life when it is issued. B. a technical accounting term that encompasses the conventions, rules, and procedures necessary to define accepted accounting practice at a particular time . C. a report issued annually by a firm that includes, at a minimum, an income statement, a balance sheet,
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a statement of cash flows, and accompanying notes. D. the extent to which something can be sold for cash quickly and easily without loss of value. 7) Original maturity refers to: A. the length of an asset's life when it is issued. B. a technical accounting term that encompasses the conventions, rules, and procedures necessary to define accepted accounting practice at a particular time. C. the price for which something could be bought or sold in a reasonable length of time, where “reasonable length of time” is defined in terms of the item's liquidity. D. the net amount (net book value) for something shown in quarterly accounting statements.
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FIN 571 Final Exam (2nd Set) 57 Questions with ANSWERS -...

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