FIN 226: Chapters 1-5 Practice Questions
the control of a firm is separated from the firm's ownership.
An agency issue is most apt to develop when:
General partnership
Deandre and Mason both enjoy sunshine, water, and surfboards. Thus, the two friends decided to create a business together renting surfboards, paddle boats, and inflatable devices in California. Deandre and Mason will equally share in the decision making and in the business profits or losses. Which type of business did they create if they both have full personal liability for the firm's debts?
stakeholder.
Levi had an unexpected surprise when he returned home this morning. He found that a chemical spill from a local manufacturer had spilled over onto his property. The potential claim that he has against this manufacturer is that of a(n):
International finance
Silvia is employed as a currency trader in the Japanese yen market. Her job falls into which one of the following areas of finance?
Corporate accounting and financial fraud
The Sarbanes-Oxley Act in 2002 was primarily prompted by which one of the following from the 1990s?
working capital
The daily financial operations of a firm are primarily controlled by managing the:
current market value per share.
The goal of financial management is to increase the:
Agency
The potential conflict of interest between a firm's owners and its managers is referred to as which type of conflict?
market value of the firm.
The primary goal of financial management is most associated with increasing the:
frequently use accounting information
When conducting a financial analysis of a firm, financial analysts:
Any one of the partners can be held solely liable for all of the partnership's debt.
Which one of the following applies to a general partnership?
Limited partnership
Which one of the following forms of business organization offers liability protection to some of its owners but not to all of its owners?
ABC Company
Which one of the following parties can sell shares of ABC stock in the primary market?
Basing management bonuses on the length of employment
Which one of the following situations is most apt to create an agency conflict?
All over-the-counter sales occur in dealer markets.
Which one of the following statements is correct?
The primary purpose of the NYSE is to match buyers with sellers.
Which one of the following statements is correct?
Determining which customers will be granted credit
Working capital management includes which one of the following?
secondary market.
You contacted your stock broker this morning and placed an order to sell 300 shares of a stock that trades on the NYSE. This sale will occur in the:
prefers its profits be taxed as personal income to its owners.
A limited liability company (LLC):
automatically increasing management salaries on an annual basis.
Probably the least effective means of aligning management goals with shareholder interests is:
