Quiz Chp 16 BA 1301

The Securities Investor Protection Corporation (SIPC):

"insures the accounts of customers of brokerage firms for up to $500,000 against a firm failure"

The three main types of unsecured short-term loans are:

"trade credit, bank loans, and commercial paper"

" Which of the following businesses would be most likely to require an unsecured bank loan, such as a line of credit or a revolving credit agreement?"

a Christmas tree farm

"In finance, the potential for loss is called probability."

false

A term loan is a loan with a maturity of less than a year.

false

_____ management is the art and science used to determine the most effective ways to acquire and use funds to achieve the firm's goals.

financial

Electronic communications networks (ECNs):

have permitted the creation of the fourth market

The cost of inventory to the firm includes all of the following EXCEPT:

selling costs

Business loans available from commercial banks with terms generally five to twelve years and secured or unsecured are called _____ loans.

term

A mortgage loan is a long-term loan that uses real estate as collateral.

true

Payments in the form of more stock to existing stockholders are called:

stock dividends

"When Magna Manufacturing sells hand on screwdriver sets to Malloy Building Supply Company, Magna bills the tool manufacturer for the screwdriver purchase with terms of payment, which specify when the account is due. This type of unsecured loan is called _____ credit."

trade

"Financial managers focus on _____, the inflow and outflow of cash."

cash flows

Dividends and interest payment are both tax-deductible.

false

Keisha Hunter keeps track of day-to-day operational data to make sure her employer has enough cash to run the business and will determine if and when the company she works for should open a second distribution center. Hunter is a(n) _____ manager.

financial