FNAN 522 Modules 1-3

Which of the following occurred during the financial crisis of 2007-2008?

A currency crisis, with investors transferring their wealth to countries with stronger currencies. Significant declines in consumer wealth and prolonged unemployment. Several major institutions failed or were subject to government takeover

Which of the following is NOT a cash equivalent?

A government bond that matures in four months.

Which of the following is a type of financial market?

Capital markets Derivative markets Money markets

A company issued debt that did not grant the bondholders the ability to seize the company's assets to settle the obligation. This debt can be traded on a public exchange. Which of the following best describes this debt?

Public, unsecured debt.

Which of the following is a factor that contributes to the conflict of interest between a company's bondholders and its shareholders?

Shareholders generally want the company to pursue riskier projects; bondholders do not. Shareholders are only paid if the company makes a profit, bondholders are paid regardless. Shareholders have a vote in how the company conducts its business; bondholders generally do not.

Which of the following statements regarding shareholder and market value is correct?

The idea of maximizing market value is related to the idea of maximizing shareholder value.

Which of the following is an accurate characteristic of a sole proprietorship?

The owner is personally liable for the business's debt and obligations

Which of the following is a legal characteristic of a general partnership?

There must be at least two business owners.

How is finance used in organizations?

To ensure that money is at the right place at the right time. To maximize shareholder value. To choose between different potential investments

Which of the following terms describes the protection of personal assets stemming from the corporate structure?

limited liability