Assignment

Question 1
Bonds are bought and sold in __________ markets.
A. equity
B. debt
C. derivatives
D. foreign exchange

Question 2
Of the following, which group would be considered INTERNAL PLAYERS of the firm?
A. the finance manager
B. the shop foreman
C. the human resources manager
D. all of the above

Question 3
Managing the firm's short-term financing activities is known a(n. __________ .
A. capital budgeting
B. capital structure
C. accounts receivable management
D. working capital management

Question 4
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

Question 5
In agency theory, the owners of the business are referred to as __________, and the managers are referred to as __________ .
A. bondholders, principals
B. stockholders, bondholders
C. agents, principals
D. principals, agents

Question 6
The sale of "new" securities, where the financial asset is being traded for the very first time, is said to take place in the __________ market.
A. primary
B. money
C. secondary
D. capital

Question 7
________ is the typical title of the corporate executive charged with determining the best repayment structure for borrowed funds to ensure timely repayment and sufficient cash for daily operations.
A. Chief Executive Officer (CEO).
B. Chief Financial Officer (CFO).
C. Chairman
D. Chief Operating Officer (COO.

Question 8
Options are bought and sold in ________ markets.
A. equity
B. debt
C. derivatives
D. foreign exchange

Question 9
Which of the following compensation packages is likely to work best for executive managers?
A. Piece-meal
B. Stock options
C. Quarterly bonuses
D. Commission

Question 10
Which of the following is NOT an activity of working capital management?
A. establishing the firm's receivable policies
B. establishing the firm's payment policies
C. choosing the appropriate level of inventory
D. all of the above are working capital management activities.

Question 11
Currencies are bought and sold in ________ markets.
A. equity
B. debt
C. derivatives
D. foreign exchange

Question 12
"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

Question 13
Sale of new common stock in the primary market is regulated by the ________, and sale of used common on the secondary market is regulated by the ________.
A. SEC, FDIC
B. SEC, SEC
C. FDIC, Federal Reserve
D. Federal Reserve, SEC

Question 14
Of the following, which is the most recent example of legislation passed by the federal government to deal with a major economic or highly visible corporate event?
A. The Federal Deposit Insurance Corporation Improvement Act
B. The Securities and Exchange Act
C. The Sarbanes-Oxley Act
D. The Securities Act

Question 15
Stocks are bought and sold in __________ markets.
A. equity
B. debt
C. derivatives
D. foreign exchange

Question 16
Which of the following is NOT an example of an agency cost?
A. paying an accounting firm to audit your financial statements
B. paying an insurance company to assure that building codes have been met for new construction
C. paying a landscaping firm to maintain your firm's grounds
D. all of the above are agency costs

Question 17
Of the following activities, which is MOST likely to be an interaction between the financial manager and the information systems manager?
A. developing a system to bill customers, pay suppliers, and track inventory
B. costing of products
C. setting credit policies
D. determining the appropriate pricing of products

Question 18
__________ is the name given to the processes surrounding recognition of the principal-agent problem and ways to align agents with the interests of the principals.
A. Principal theory
B. Interested party theory
C. Agency theory
D. Compensation process theory

Question 19
Which of the following is NOT an activity of a financial institution or market?
A. bringing together buyers and sellers of financial assets
B. providing a market for the transaction of financial assets
C. providing information to buyers and/or sellers of financial assets
D. all are activities of financial institutions.

Question 20
Financial institutions and markets __________ .
A. are the organized financial intermediaries and the forums that promote the cycle of money.
B. compose the set of financial activities that support the operations of a business.
C. are centered on the purchase and sale of financial assets.
D. are concerned only with the addition of a multinational element to all finance activities.