Which of the following is not considered to be one of the three major forms of business
ownership in the United States?
a. proprietorship
b. partnership
c. public limited company
d. corporation
Which of the following would not be part of primary bank capital?
a. bank premises
b. common stock of the bank
c. loan loss reserves
d. perpetual preferred stock
The ratio between the present value of a project’s cash inflows and the present value of
its initial investment is called the:
a. MIRR.
b. IRR.
c. PM.
d. NPV.
e. none of the above are correct
Which of the following statements is most correct?
a. There is an inverse relation between the present value interest factor of an annuity
and the future value interest factor of an annuity, i.e., one is the reciprocal of the other.
b. The future value of an ordinary annuity can be determined as the product of the
annual payment and the appropriate future value interest factor for an ordinary annuity.
c. If a bank uses daily compounding for a savings account, the nominal rate (or APR)
will be greater than the effective annual rate.
d. Each of the above statements is equally true.
The principal liabilities of all depository institutions are:
a. certificates of deposits
b. deposits
c. loans
d. all the above
___________________________________ has the goal of a creating a single market
for investment services across the European Union as well as creating a single set of
regulations for financial services firms.
a. European Securities Services (ESS)
b. Euro Capital Markets Accord (ECMA)
c. Continental Brokerage Services (CBS)
d. Money Market Clearing House (MMCH)
e. none of the above.
Which of the following would not normally be discussed when describing a firm’s
operating cycle?
a. manufacturing process
b. selling effort
c. acquiring financing
d. collection period
Which one of the following is not a basic element or component of the percentage of
sales approach to long-term financial planning?
a. asset investment requirements
b. internally generated financing
c. spontaneous increases in current liabilities
d. automatic increases in cash inflows
The price level of goods and services may be eXpressed as the ratio of _____________.
a. GDP to real output
b. real output to GDP
c. Velocity to GDP
d. real output to velocity
________________ involves making decisions relating to issuing and investing in
stocks and bonds.
a. Financial economics
b. Financial management
c. Investment management
d. Asset allocation
e. none of the above
The cash conversion cycle measures the time between when a firm pays its suppliers for
inventory and when it collects cash from customers on a sale of the finished product.
The four groups of policy makers that are actively involved in achieving the nation€s
economic policy objectives are the Federal Reserve System, the President, Congress,
and the U.S. Treasury.
Credit unions are cooperative nonprofit organizations that exist primarily to provide
member depositors with consumer credit.
Advance factoring is where the firm selling its accounts receivable is paid on the
normal collection date or net due date of the account.
Representative full-bodied money consists of paper money fully backed by a precious
metal.
Financial assets include ownership of land, buildings, machinery, inventory,
commodities, and precious metals.