Which of the following is an advantage of a

sole proprietorship

?

Question options:

The owner’s unlimited liability

The lack of continuity upon death   of the owner

The ease of start-up

The ability to raise

capital

Question 2

5 / 5 points

Stocks are bought and sold in __________ markets.

Question options:
  

equity

debt

derivatives

foreign exchange

Question 3

5 / 5 points
       

The common objective of borrowing and lending is to:

Question options:
  

make all parties better off.

gain a profit at the other’s   expense.

make a firm or individual appear   more liquid than is really the case.

thwart regulatory authority.

Question 4

5 / 5 points
       

__________ are the forums where buyers and sellers of financial assets and commodities meet.

Question options:
  

Housing markets

Federal Reserve banks

Financial markets

Automotive shows

Question 5

5 / 5 points
       

Financial assets that will mature within a year are bought and sold in the __________ market.

Question options:
  
debt
 
capital
 

stock

money

Question 6

5 / 5 points
       

The set of financial activities that support the OPERATIONS of a business is best described by which main area of finance?

Question options:
  

Corporate finance

Investments

Financial institutions and markets

International finance

Question 7

5 / 5 points
       

At its most basic level, the function of financial intermediaries is to:

Question options:
  

track and report interest rates.

move money from lenders to   borrowers and back again.

report all financial transactions   to the federal government.

effect a transfer of wealth in   society.

Question 8

5 / 5 points
       

__________ addresses the question of how to handle our day-to-day business needs.

Question options:
  

Capital budgeting

Capital structure

Working capital management

Accounts receivable management

Question 9

5 / 5 points
       

__________ is a major disadvantage of the corporate form of business.

Question options:
  

Double taxation

Unlimited liability

Lack of ability to raise capital

Transfer of ownership

Question 10

5 / 5 points
       

In agency theory, the owners of the business are referred to as __________, and the managers are referred to as __________.

Question options:
  

bondholders, principals

stockholders, bondholders

agents, principals

principals, agents

Question 11

5 / 5 points
       

Options are bought and sold in __________ markets.

Question options:
  
equity
 
debt
 
derivatives
 
foreign exchange
 

Question 12

5 / 5 points
       

Of the following, which is NOT one of the four main areas of finance?

Question options:
  

International Finance

Corporate Finance

 
Investments
 

All are considered main areas of   finance.

Question 13

5 / 5 points
       

The problem of motivating one party to act in the best interest of another party is known as the:

Question options:
  

leadership directive.

management priority.

principal-agent problem.

sigma six structure.

Question 14

5 / 5 points
       

The means by which a company is financed refers to the firm’s ________.

Question options:
  

capital budgeting

capital structure

accounts receivable management

working capital management

Question 15

5 / 5 points
       

Currencies are bought and sold in __________ markets.

Question options:
  
equity
 
debt
 
derivatives
 
foreign exchange
 

Question 16

5 / 5 points
       

__________ addresses the question of what business we should be in over the long run.

Question options:
  
Capital budgeting
 
Capital structure
 
Working capital management
 
Accounts receivable management
 

Question 17

5 / 5 points
       

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.

Question options:
  

primary

 
money
 

secondary

 
capital
 

Question 18

5 / 5 points
       

__________ is the area of finance concerned with activities like borrowing funds to finance projects such as plant expansions or new product launches.

Question options:
  
Working capital management
 
International finance
 
Investments
 
Corporate finance
 

Question 19

5 / 5 points
       

A __________ is a business that is owned entirely by an individual.

Question options:
  
sole proprietorship
 

partnership

subchapter S

corporation

 
corporation
 

Question 20

5 / 5 points
       

__________ is the area of finance concerned with the activities of buying and selling financial assets such as stocks and bonds.

Question options:
  
Investments
 
Corporate finance
 
International finance
 

Financial markets and institutions