Question 21 Question Types: Multiple choice questions: in financial management, measure the size of the risk indicators ().

1. Expectations 2. The standard deviation of 3. Standards slip away 4. Variance Question 22 Question Types: Multiple choice questions: financial markets, the properties of the financial instruments can be divided into (). 1. The basis of financial markets 2. Financial derivatives market 3. Issuance market 4. Circulation market Question 23 Question Types: Multiple choice questions: Coordination between the owners and creditors of the main ways of conflict of interest (). 1. By the Government in formulating appropriate legal provisions safeguarding the interests of creditors 2. Call the **** or not the borrower 3. Creditor incentives owner 4. Restrictive borrowing Title 24 Question Type: Multiple choice questions: an annuity in accordance with the receivables, payment differences can be divided into (). 1. Deferred annuities 2. Pay a pension 3. Ordinary annuity 4. Perpetuity Question 25 Question Types: Multiple choice questions: the development of financial management experience of the main (). 1. To focus on financing the management of stage 2. To focus on the management of the internal control phase of 3. Focus on the management of the investment stage 4. To the capital for the first phase of the integrated management of the center of gravity Question 26 Question Types: Multiple choice questions: The following does not belong to the principles of financial management is () 1. the principle of maximizing the value of 2. the principles of risk and return balance 3. costeffective 4. time to question the value of the principles of Title 27 of the type: Multiple choice questions: the financial market to finance an object divided into (). 1. Capital Markets 2. Gold market 3. Stock Market 4. The **** market Question 28 Question Types: Multiple choice questions: time value of money is deducted () after the social average profit margin funds. 1. Interest rates 2. 3. Free rate 4. Question 29 of Title Inflation Type: Multiple choice questions: Which of the following tax revenue generated by the project will affect (). 1. Corporate finance decision-making 2. Enterprise Investment 3. Enterprise cash flow 4. Corporate profit distribution section 30 Question Title Type: Multiple choice questions: the financial management of the micro-environment include (). 1 .. their quality 2. Financial Markets 3. Management level 4. Production status

ur Results:
The correct answer for each question is indicated by a .

INCORRECT The field of finance is closely related to the fields of: A)statistics and economics B)statistics and risk analysis C)economics and accounting D)accounting and comparative return analysis Feedback: Finance links economic theory with the numbers of accounting. Refer to text page 3.

CORRECT

The first area of study to benefit from the focus in the 1950's to a more analytical, decision oriented approach was: A)cash and inventory management B)capital budgeting (allocating financial capital to the purchase of plant and equipment) C)capital structure formulation (the balance between liabilities and equity) D)dividend policy ( the relationship between dividends and earnings) Feedback: A starting point was Joel Dean's CAPITAL BUDGETING (New York: Columbia University Press, 1951.). Refer to text page 4.

INCORRECT The ultimate measure of performance is:

A)the amount of the firm's earnings B)how the earnings are valued by the investor C)the firm's profit margin D)return on the firm's total assets Feedback: In the valuation approach profits are important but the ultimate measure of performance is how investors value the earnings of the firm. Refer to text page 7.

INCORRECT Which of the following is not the responsibility of financial management? A)allocation of funds to current and capital assets B)obtaining the best mix of financing alternatives C)preparation of the firm's accounting statements D)development of an appropriate dividend policy Feedback: Preparing accounting statements is not a function of a financial manager but rather accounting. Refer to text page 13.

CORRECT

Which of the following are not among the daily activities of financial management? A)sale of shares and bonds B)credit management C)inventory control D)the receipt and disbursement of funds Feedback: The sale of shares and bonds are less frequent routine responsibilities of the financial manager. Refer to text page 14.

INCORRECT A main benefit to the corporate form of organization is: A)double taxation of corporate income B)simplicity of decision making and low organizational complexity C)limited liability for the corporate shareholders D)a major management role exists for the firm's owners Feedback: All except C are drawbacks of the corporation. Refer to text page 15.

INCORRECT In analyzing the firm, the investor should consider: A)the risk inherent in the firm's operation B)the time patterns over which the firm's earnings increase/decrease C)the quality and reliability of the firm's reported earnings D)all of the above should be considered Feedback: The financial manager should be sensitive to all these considerations. Refer to text page 7.

INCORRECT Agency theory examines the: A)relationship between the owners and managers of the firm B)insurability of the firm's assets C)relationship between dividend policy and firm value D)value of the firm relative to other firms in the industry Feedback: Answer A is the definition of agency theory. Refer to the text page 5.

INCORRECT Financial markets: A)exist as a vast global network of individuals and financial institutions B)include a broad group representing lenders, borrowers, owners, institutional investors, corporations, government units and others C)circulate information quickly that affects prices of securities D)all of the above Feedback: The question reinforces that the financial markets have become international and that any organization that sells or buys shares, bonds, or other securities are part of the financial markets. Refer to text page 15.

10

CORRECT

Capital is allocated by financial markets by: A)a lottery system between investment dealers B)pricing securities based on their risk and expected future cash flows C)by pricing risky securities higher than low-risk securities D)by a government risk-rating system based on AAA for low risk and CCC for high risk Feedback: Capital markets allocate capital by pricing those securities high that have low risk, high returns relative to other companies, and good expectations for the future. By pricing these securities high, the market allows "good" firms to raise money less expensively than low priced "poor" firms. Refer to text page 17.

11

INCORRECT The allocation of capital is determined by: A)expected rates of return B)the Bank of Canada C)the initial sale of securities in the primary market D)the size of the federal debt Feedback: Capital flows to where it can receive the best return for given risk. Refer to text page 18.

12

INCORRECT The mix of debt and equity in a firm is referred to as the firm's: A)primary capital B)capital composition C)cost of capital D)capital structure Feedback: The source of capital for the firm is its capital structure. Refer to text page 5.

13

INCORRECT The main focus of finance for the last 40 years has been: A)mergers and acquisitions B)conglomerate firms C)inflation D)risk-return relationships Feedback: From the 1960s to today the main focus of financial management has been risk-return relationships and the maximization of return for a given level of risk. Refer to text page 5