The steps in financial planning include (check all that apply):

Establishing organizational goals and objectives

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

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

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

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

Sources of unsecured short-term financing include (check all that apply):

Promissory notes issued to suppliers

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

The over-the-counter (OTC) market

Primary markets and investment banking firms

The over-the-counter (OTC) market

Business Quiz: Mastering Financial Management

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| Written by Susanjoypaul

Susanjoypaul

Community Contributor

Quizzes Created: 6 | Total Attempts: 2,025

Questions: 10 | Attempts: 245 | Updated: Mar 21, 2023

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Book reference for the quiz: Business (Pride, Hughes, & Kapoor, 2014)

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
Correct Answer
D. Honesty

Explanation
See page 554 in Business (Pride, Hughes, & Kapoor, 2014).

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2.

Short-term financing is money that will be used for five years or less.
- A.
  
  True
- B.
  
  False
Correct Answer
B. False

Explanation
Short-term financing is money that will be used for one year or less. See page 554 in Business (Pride, Hughes, & Kapoor, 2014).

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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
Correct Answer(s)
A. Establishing organizational goals and objectives
C. Budgeting for financial needs
D. Identifying sources of funds

Explanation
See pages 557-559 in Business (Pride, Hughes, & Kapoor, 2014).

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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
Correct Answer
D. All of the above

Explanation
See page 559 in Business (Pride, Hughes, & Kapoor, 2014).

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5.

Unsecured financing is financing that is not backed by collateral.
- A.
  
  True
- B.
  
  False
Correct Answer
A. True

Explanation
See page 559 in Business (Pride, Hughes, & Kapoor, 2014).

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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
Correct Answer(s)
A. Trade credit
B. Promissory notes issued to suppliers
C. Unsecured bank loans
D. Commercial paper

Explanation
Inventory and accounts receivable are sources of secured short-term financing. See pages 559-561 in Business (Pride, Hughes, & Kapoor, 2014).

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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
Correct Answer
D. Accounts receivable

Explanation
See page 562 in Business (Pride, Hughes, & Kapoor, 2014).

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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
Correct Answer
A. True

Explanation
See page 563 in Business (Pride, Hughes, & Kapoor, 2014).

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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
Correct Answer(s)
C. Securities exchanges
D. The over-the-counter (OTC) market

Explanation
Initial public offerings and sale of stock by investment banking firms are part of the primary market. See pages 563-565 in Business (Pride, Hughes, & Kapoor, 2014).

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Business Quiz: Mastering Financial Management

One of the most important priorities for someone interested in a finance career is (select the best answer):

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

The steps in financial planning include (check all that apply):

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

Unsecured financing is financing that is not backed by collateral.

Sources of unsecured short-term financing include (check all that apply):

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

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

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