Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Chapter 01 - The Goals and Functions of Financial Management
62. Professors Harry Markowitz and William Sharpe received their Nobel prize in economics
for their contributions to the
63. Proper risk-return management means that
64. One of the major disadvantages of a sole proprietorship is
Chapter 01 - The Goals and Functions of Financial Management
65. One of the major advantages of a sole proprietorship is
66. The partnership form of an organization
67. A corporation is
Chapter 01 - The Goals and Functions of Financial Management
68. With a Subchapter S corporation
69. A Subchapter S corporation
70. Corporate governance is the
Chapter 01 - The Goals and Functions of Financial Management
71. Many companies such as Tyco, Enron, and WorldCom that suffered financial distress in
the late 1990s and early 2000s,
72. Agency theory examines the relationship between the
73. Agency theory would imply that conflicts are more likely to occur between management
and shareholders when
Chapter 01 - The Goals and Functions of Financial Management
74. Agency theory deals with the issue of
75. Agency problems are least likely to arise in which organizational form?
76. Institutional investors are important in today's business world because
Chapter 01 - The Goals and Functions of Financial Management
77. The increasing percentage ownership of public corporations by institutional investors has
78. The Sarbanes-Oxley Act was passed in an effort to
79. The Sarbanes-Oxley Act set up the Public Company Accounting Oversight Board with the
responsibility for all of the following except
Chapter 01 - The Goals and Functions of Financial Management
80. A financial manager's goal of maximizing current or short-term earnings may not be
appropriate because
81. Maximization of shareholder wealth is a concept in which
82. Which of the following is not a true statement about the goal of maximizing shareholder
wealth?
Chapter 01 - The Goals and Functions of Financial Management
83. As mergers, acquisitions, and restructuring have increased in importance, agency theory
has become more important in assessing whether
84. Insider trading occurs when
85. The major difficulty in most insider-trading cases has been
Chapter 01 - The Goals and Functions of Financial Management
86. Money markets would include which of the following securities?
87. Capital markets do not include which of the following securities?
88. When a corporation uses the financial markets to raise new funds, the sale of securities is
made in the
Chapter 01 - The Goals and Functions of Financial Management
89. Companies that have higher risk than a competitor in the same industry will generally
have
90. The financial markets allocate capital to corporations by
91. Corporate restructuring has been one result of more institutional ownership. Restructuring
can cause
Chapter 01 - The Goals and Functions of Financial Management
92. A corporate buy-back, or the repurchasing of shares, is
93. A corporate restructuring can result in
94. Which of the following is not an example of restructuring as discussed in the text?
Chapter 01 - The Goals and Functions of Financial Management
95. Future financial managers will need to understand
96. The increase in the internationalization of financial markets has led to
97. The internationalization of the financial markets has
Chapter 01 - The Goals and Functions of Financial Management
98. The Internet has affected the financial markets by
99. Increased productivity due to technology has
100. Companies that perform well
Chapter 01 - The Goals and Functions of Financial Management
101. The entity that is responsible for establishing the allocation and cost of capital is
102. Benefits of social responsibility often include
103. Regarding risk levels, financial managers should
Chapter 01 - The Goals and Functions of Financial Management
104. Match the following with the questions below:
1. sole
The ability to make profits on financial securities
An agreement of partners specifying the ownership
3. subchapter S
A form of organization that represents single person
ownership and offers the advantages of simplicity of
decision making and low organizational and operating
Examines the relationship between the owners of the
7. capital structure
A form of ownership, in which profit is taxed as direct
8. articles of
A form of ownership that carries unlimited liability to the
owners and where the profits are taxed at individual tax
Chapter 01 - The Goals and Functions of Financial Management
105. Match the following with the questions below:
1. primary
This form of capital is found on the balance sheet under
A market where the securities being traded are new public
7. secondary
Market composed of common stock, preferred stock,
commercial and government bonds and other long-term
The high inflation rates of the 1980s caused this form of
capital to hold its value better than other forms of capital
