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- 1. Multiple Choice
A business owned by a several individuals who have limited liability for its debt is called a:
A. corporation.
B. sole proprietorship.
C. general partnership.
D. limited liability company
- 2. Multiple Choice
A business partner whose potential financial loss in the partnership will not exceed his or her investment in that partnership is called a:
A. generally partner
B. sole proprietor
C. limited partner
D. corporate shareholder
- 3. Multiple Choice
A shareholder is:
A. any person who has voting rights and receive dividends based on stock ownership of a corporation.
B. a person who initially founded a firm and currently has management control over that firm.
C. a creditor to whom a firm currently owes money.
D. none of the above.
- 4. Multiple Choice
A stakeholder is:
A. any person who has voting rights and receive dividends based on stock ownership of a corporation.
B. a person who initially founded a firm and currently has management control over that firm.
C. a creditor to whom a firm currently owes money.
D. none of the above.
- 5. Multiple Choice
Which of the following questions are addressed by financial managers?
I. How should a product be marketed?
II. Should customers be given 30 or 45 days to pay for their credit purchases?
III. Should the firm borrow more money?
IV. Should the firm acquire new equipment?
A. II and III only
B. I, II, and III only
C. II, III, and IV only
D. I, II, III, and IV
- 6. Multiple Choice
Which one of the following statements concerning a sole proprietorship is correct?
A. The life of a sole proprietorship is potentially unlimited.
B. A sole proprietor can generally raise large sums of capital quite easily.
C. Transferring ownership of a sole proprietorship is easier than transferring ownership of a corporation.
D. It is not easy to create a sole proprietorship.
- 7. Multiple Choice
Decisions made by financial managers should primarily focus on increasing which one of the following?
A. size of the firm
B. growth rate of the firm
C. market value per share of outstanding stock
D. total sales
- 8. Multiple Choice
Which of the following represent cash outflows from a corporation?
I. issuance of securities
II. payment of dividends
III. Net profits
IV. payment of salaries/wages
A. II and IV only
B. I and IV only
C. I, II, and IV only
D. II, III, and IV only
- 9. Multiple Choice
Which of the following are not a financial intermediary?
A. Insurance companies
B. Banks
C. Brokers
D. Government
- 10. Multiple Choice
Which of the following could be an investor?
A. Insurance companies
B. Banks
C.Government
D. All the above
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