3101 Practice Exam Ch 1-4

3101 Practice Exam Ch 1-4 - Practice Exam - Finance 3101 1)...

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Practice Exam - Finance 3101 1) At its most basic level, the function of financial intermediaries is to ________. A) track and report interest rates. B) move money from lenders to borrowers and back again. C) report all financial transactions to the federal government. D) effect a transfer of wealth in society. 2) Which of the following best identifies the four main areas of finance? A) Exchange rate management, investments, financial institutions and markets, international. B) Corporate, investments, capital structure, international. C) Corporate, investments, financial institutions and markets, international. D) Corporate, capital budgeting, financial institutions and markets, regulation. 3) Stocks are bought and sold in ________ markets. A) equity B) debt C) derivatives D) foreign exchange 4) ________ is the area of finance concerned with activities like repayment of borrowed funds through dividends or interest payments. A) Investments B) Corporate finance C) Capital budgeting D) International finance 5) "Concern with the multinational elements of financial activities" best describes which of the four main areas of finance? A) Investments B) International finance C) Corporate finance D) Financial institutions and markets 6) The sale of "used" securities, where the financial asset is being traded from one individual to another and the proceeds do not go to the original issuer of the security, is said to take place in the ________ market. A) primary B) money C) secondary D) capital
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A) capital budgeting. B) capital structure. C) accounts receivable management. D) working capital management. 8) ________ is a major disadvantage of the corporate form of business. A) Double taxation B) Unlimited liability C) Lack of ability to raise capital D) Transfer of ownership 9) Which of the following is NOT a DISADVANTAGE of a partnership? A) Unlimited liability to at least some of the owners. B) The limited life of the business. C) The potential difficulty in transferring ownership. D) All are disadvantages of a partnership. 10) The income statement begins with revenue and subtracts various operating expenses until arriving at ________. A) earning after taxes. B) net income. C) taxable income. D) EBIT. 11) To find operating cash flow for the business for the year, add depreciation expense to EBIT and then ________. A) subtract the interest expenses. B) add the taxes. C) subtract the taxes. D) add interest expenses. 12) Debts to be paid more than one year from now are claims against the firm's assets: in other words, they are long-term liabilities. These claims are from ________ who have provided capital to the firm but whose entire repayment is not due during the coming year or operating cycle. A) banks and bondholders
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This note was uploaded on 12/11/2011 for the course FIN 3101 taught by Professor Casper during the Spring '11 term at Temple.

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3101 Practice Exam Ch 1-4 - Practice Exam - Finance 3101 1)...

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