FIN 3603 - Midterm

If the lowest limit sell order for IBM stock is $138 per share and the highest limit buy order is $136, the bid-ask spread on IBM stock is

$2

when an individual or organization acquires enough stock ownership and/or the ability to vote on behalf of other shareholders to replace the board of directors against their will it is known as

a hostile takeover

If the managers of a company are not the owners of the company, they are considered

agents

the most important function of a market maker on the NYSE is to

provide liquidity

one of the most important functions of the secondary market is to

provide liquidity to investors

firms that are the easiest to value are

publicly traded firms

dark pools are alternative trading systems that

reveal limited pricing and volume information

a fractional share of ownership in a corporation is known as

stock

a disadvantage of a partnership is

unlimited liability

which of the following is one of the primary questions addressed by financial managers

which projects should the firm invest resources in to increase shareholder wealth

One of the primary tasks of the financial manager is to manage short-term cash needs, which is known as

working capital management

researchers estimate that including dark pools there are as many as _____ stock trading venues where investors can buy and sell stock

50

technology that allows a transaction to be recorded in a publicly verifiable way without the need for a trusted third party to certify its authenticity is referred to as

blockchain technology

which of the following positions typically reports to the chief financial officer (CFO)

controller

a _____ is a form of business organization that is considered an artificial being and has limited liability

corporation

a corporation may elect to make a periodic cash distribution to its shareholders which is known as a

dividend payment

shareholders exercise control of a corporation by

electing a board of directors

when an investor submits a market order to sell stock the order will be executed

immediately

a limited liability company combines the

limited liability of a corporation with the ownership of a partnership

the ability to sell an investment quickly at a price close the the price at which you could contemporaneously buy it is known as

liquidity

which of the following is one of the primary functions of the financial manager

making financing decisions

a agency problem occurs when

managers put their own self-interests above shareholders

the primary goal of the financial manager is to

maximize shareholder wealth

the primary advantage of an S corporation is that profits are

not taxed at the corporate level

the market where financial securities are offered for sale to the public for the very first time is known as the

primary market