Mastering Financial Management

10 Questions | Total Attempts: 104

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Mastering Financial Management

This 10-question quiz covers material presented in Chapter 19 of Business (Pride, Hughes, & Kapoor, 2014). Pride, W. M. , Hughes, R. J. , & Kapoor, J. R. (2014). Business(12thEd. ). Mason, OH: South-Western, Cengage Learning.


Questions and Answers
  • 1. 
    One of the most important priorities for someone interested in a finance career is (select the best answer):
    • A. 

      Making money

    • B. 

      Dressing well

    • C. 

      Having a nice car

    • D. 

      Honesty

  • 2. 
    Short-term financing  is money that will be used for five years or less. 
    • A. 

      True

    • B. 

      False

  • 3. 
    The steps in financial planning include (check all that apply):  
    • A. 

      Establishing organizational goals and objectives

    • B. 

      Setting up a slush fund

    • C. 

      Budgeting for financial needs

    • D. 

      Identifying sources of funds

  • 4. 
    Short-term debt financing is usually easier to obtain than long-term debt financing because (select the best answer): 
    • A. 

      For the lender, the shorter repayment period means less risk of non-payment.

    • B. 

      The dollar amounts of short-term loans are usually smaller than those of long-term loans.

    • C. 

      A close working relationship normally exists between the short-term borrower and the lender.

    • D. 

      All of the above

  • 5. 
    Unsecured financing is financing that is not backed by collateral. 
    • A. 

      True

    • B. 

      False

  • 6. 
    Sources of unsecured short-term financing include (check all that apply):
    • A. 

      Trade credit

    • B. 

      Promissory notes issued to suppliers

    • C. 

      Unsecured bank loans

    • D. 

      Commercial paper

    • E. 

      Inventory

    • F. 

      Accounts receivable

    • G. 

      All of the above

  • 7. 
    A factor is a firm that specializes in buying other firms’ (select the best answer): 
    • A. 

      Trade credit

    • B. 

      Promissory notes

    • C. 

      Inventory

    • D. 

      Accounts receivable

  • 8. 
    An initial public offering (IPO) occurs when a corporation sells common stock to the general public for the first time.
    • A. 

      True

    • B. 

      False

  • 9. 
    The secondary market is a market for existing financial securities that are traded between investors, and includes (check all that apply): 
    • A. 

      Initial public offerings

    • B. 

      Primary markets and investment banking firms

    • C. 

      Securities exchanges

    • D. 

      The over-the-counter (OTC) market

    • E. 

      All of the above