Chapter 1
Introduction to Sport Finance
Quiz Questions
Multiple Choice
1. Three interrelated sectors exist within finance. Which of the following sectors focuses
on security choices made by individual and institutional investors as portfolios are
being built?
a. Money and capital markets
b. Investments
c. Financial management
d. Derivative trading
e. None of the above
2. When an organization borrows money that must be paid back over time, usually with
interest, what kind of financing is being used?
a. Debt
b. Equity
c. Retained earnings
d. Government
e. Gift
3. Three interrelated sectors exist within finance. The goal or outcome of those working
in which of the following sectors is to acquire and secure funds to maximize
shareholder wealth?
a. Money and capital markets
b. Investments
c. Financial management
d. Derivative trading
e. None of the above
4. This type of financing includes charitable donations, either cash or in-kind, made to an
organization and is the primary source or operating and investing income for major
collegiate sports programs.
a. Debt
b. Equity
c. Retained earnings
d. Government
e. Gift
5. Three interrelated sectors exist within finance. Which of the following includes
securities markets, investment banking, insurance, and mutual fund management?
a. Money and capital markets
b. Investments
c. Financial management
d. Derivative trading
e. None of the above
6. Typically, owners in a specific industry compete for wealth maximization. Owners in
sport might not be interested in this goal. Rather, they may be interested in
__________.
a. Winning championships
b. Seeking celebrity status
c. Protecting a community asset
d. All of the above
e. None of the above
7. For all sport and entertainment organizations, __________ financing may include land
use, tax abatements, direct facility financing, and infrastructure improvements.
a. Debt
b. Equity
c. Retained earnings
d. Government
e. Gift
8. Of the following statements regarding the Arts, Entertainment, and Recreation
segment (NAICS 71) of our economy, which of the following is true?
a. The industry employs a large number of full-time workers and relatively few
seasonal and part-time workers.
b. Those working in the industry tend to be older than those working in other
industries.
c. Wages for those working in the industry tend to be higher than wages paid to
those working in other industries.
d. Almost all leisure time activities, including watching movies, are a part of this
sector.
e. Rising incomes and increasing leisure time over the next 10 years should lead
to an increase in demand in this sector.
9. Under this sport franchise ownership model, __________ is the most common model
of team ownership.
a. Single Owner/Private Investor Model
b. Multiple Owners/Private Investment Syndicate Model
c. Multiple Owners/Publicly Traded Corporation Model
d. Single Entity Model
e. Distributed Club Ownership Model
10. Other than __________, sport leagues in the United States are subject to the Sherman
Act.
a. The National Football League
b. The National Basketball League
c. Major League Baseball
d. The National Hockey League
e. Major League Soccer
1. T or F The sport industry relies on the discretionary income of spectators and
participants.
2. T or F The single entity structure is used by MLB, the NBA, the NHL, and the NFL.
3. T or F The single entity structure is used by Major League Soccer.
4. T or F Distributed club ownership model leagues are sometimes structured as non-
profit organizations.
5. T or F Yankee Stadium was financed by the team using a form of equity financing.
6. T or F Gift financing is a minor source of operating income for major collegiate sports
programs.
7. T or F The sport industry is classified as an industry by the U.S. Census Bureau.
8. T or F The largest grouping of sport businesses is within NAICS 71, the Arts,
Entertainment, and Recreation segment.
9. T or F The Gross Domestic Sports Product (GDSP) is the market value of a nation’s
output of sport-related goods and services in a given year.
10. T or F Antitrust law applies to single-entity sport leagues.
Answers to Quiz Questions
Multiple Choice
