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C214 FINANCIAL MANAGEMENT OVERVIEW CONCEPT QUESTIONS AND ANSWERS UPLOADED 2024, Exams of Nursing

California Career SchoolNursing

C214 FINANCIAL MANAGEMENT OVERVIEW CONCEPT QUESTIONS AND ANSWERS UPLOADED 2024C214 FINANCIAL MANAGEMENT OVERVIEW CONCEPT QUESTIONS AND ANSWERS UPLOADED 2024C214 FINANCIAL MANAGEMENT OVERVIEW CONCEPT QUESTIONS AND ANSWERS UPLOADED 2024

Typology: Exams

2023/2024

Available from 07/18/2024

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C214 FINANCIAL MANAGEMENT OVERVIEW CONCEPT
QUESTIONS AND ANSWERS UPLOADED 2024
1. The goal of the corporation is to:
a. Maximize profits
b. Maximize market share
c. Maximize stock price
d. Minimize risk - Correct Answer c. Maximize stock price
2. Risk premium is best described as
a. Return on risky securities
b. Compensation for risk-taking
c. Return on stocks
d. Expected return on securities - Correct Answer b. Compensation for risk-taking
3. What is the relationship between risk and required return?
a. The two are independent
b. Higher required return causes lower risk
c. Higher risk causes higher required return
d. None of the above - Correct Answer c. Higher risk causes higher required return
4. The value of money depends upon
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Download C214 FINANCIAL MANAGEMENT OVERVIEW CONCEPT QUESTIONS AND ANSWERS UPLOADED 2024 and more Exams Nursing in PDF only on Docsity!

QUESTIONS AND ANSWERS UPLOADED 2024

  1. The goal of the corporation is to: a. Maximize profits b. Maximize market share c. Maximize stock price d. Minimize risk - Correct Answer c. Maximize stock price
  2. Risk premium is best described as a. Return on risky securities b. Compensation for risk-taking c. Return on stocks d. Expected return on securities - Correct Answer b. Compensation for risk-taking
  3. What is the relationship between risk and required return? a. The two are independent b. Higher required return causes lower risk c. Higher risk causes higher required return d. None of the above - Correct Answer c. Higher risk causes higher required return
  4. The value of money depends upon

QUESTIONS AND ANSWERS UPLOADED 2024

a. The timing of the receipt b. The certainty of receipt c. The size of the receipt d. All of the above - Correct Answer d. All of the above

  1. What is the purpose of the SEC 10-K filing requirement? a. Promote transparency and efficiency b. Prevent insider trading c. Regulate sales practices d. Prevent monopolies - Correct Answer a. Promote transparency and efficiency
  2. Which line item is not part of net working capital? a. Inventory b. Bonds c. Accounts Payable d. Accrued expenses - Correct Answer b. Bonds
  3. Which action causes a cash outflow? a. Increase in accounts payable

QUESTIONS AND ANSWERS UPLOADED 2024

a. Depreciation expense b. Dividends paid c. Addition to retained earnings d. Both a and c - Correct Answer d. Both a and c

  1. What item is added to net income to calculate net cash flow? a. Taxes b. Depreciation expense c. Dividends paid d. None of the above - Correct Answer b. Depreciation expense
  2. Which represents cash earned by producing and selling the product a. Cash flow operations b. Cash flow financing c. Cash flow investing d. None of the above - Correct Answer a. Cash flow operations
  3. Which ratio reflects a firm's reliance on debt financing? a. Quick ratio

QUESTIONS AND ANSWERS UPLOADED 2024

b. Net Margin c. Financial leverage d. Asset turnover - Correct Answer c. Financial leverage

  1. If two firms use different inventory valuation methods, it is called: a. Timing issue b. Seasonal effect c. Cross industry effect d. Accounting difference - Correct Answer d. Accounting difference
  2. What affects the required return on a security? a. Perceived riskiness of the security b. Degree of investor risk aversion c. Trading in financial markets d. All of the above - Correct Answer d. All of the above
  3. Which is the most frequent type of transaction in financial markets? a. IPO's b. Secondary market trades

QUESTIONS AND ANSWERS UPLOADED 2024

c. Expected return d. All of the above - Correct Answer d. All of the above

  1. Which signifies a need to change the calculator to Begin mode? a. Cash deposited at the beginning of the year b. Recurring payments made at the beginning of each year c. Payments are made more frequently than annually d. None of the above - Correct Answer b. Recurring payments made at the beginning of each year
  2. Why is an annuity due more valuable than an ordinary annuity? a. Payments are received earlier b. Interest is compounded c. It is not more valuable; they are the same d. Use different interest rates. - Correct Answer a. Payments are received earlier
  3. Which annuity provides increasing payments over time? a. Annuity Due b. Ordinary Annuity

QUESTIONS AND ANSWERS UPLOADED 2024

c. Perpetual Annuity d. Perpetual Growth Annuity - Correct Answer d. Perpetual Growth Annuity

  1. What causes uncertainty in financial decisions? a. GAAP changes b. Erroneous future projections c. Computer error d. Both b and c - Correct Answer b. Erroneous future projections
  2. An increase in net working causes a. A cash inflow b. A cash outflow c. Does not affect cash flow d. Depends upon accrual accounting - Correct Answer b. A cash outflow
  3. What feature distinguishes bonds from stock? a. Price determined in market trading b. Required cash payments to investors c. Mandatory redemption date

QUESTIONS AND ANSWERS UPLOADED 2024

d. Never - Correct Answer b. At par price

  1. For a semi-annual pay bond, which inputs must be adjusted? a. N and I/Y b. N and PMT c. N, I/Y, and PMT d. PV and FV - Correct Answer c. N, I/Y, and PMT
  2. Which describes the relationship between price and yield a. Both change in the same direction b. Price increases cause yield decreases c. The two are independent d. Indenture sets yield; trading sets price - Correct Answer b. Price increases cause yield decreases
  3. Which does not affect a bond's required yield? a. Treasury yields b. Earnings per share c. Term to maturity

QUESTIONS AND ANSWERS UPLOADED 2024

d. Firm riskiness - Correct Answer b. Earnings per share

  1. A bond's duration causes: a. Default risk b. Market risk c. Credit risk d. Event risk - Correct Answer b. Market risk
  2. If a bond's price is at a discount, then a. Bond yield is less that coupon rate b. Bond yield is equal to the coupon rate c. Bond yield is more than the coupon rate d. Insufficient information - Correct Answer c. Bond yield is more than the coupon rate
  3. What is the difference between common and preferred stock? a. Preferred stock has a maturity date b. Preferred stock dividends are fixed c. Common stock has priority of claims in bankruptcy

QUESTIONS AND ANSWERS UPLOADED 2024

d. Beta - Correct Answer c. Excess return over risk free rate

  1. What best describes Beta? a. A measure of financial leverage b. The market risk premium c. Relative riskiness of a stock d. Measure of stock's required return - Correct Answer c. Relative riskiness of a stock
  2. Which is not a means of eliminating idiosyncratic risk? a. A diversified portfolio b. Hold a portfolio with a Beta = 1. c. Buy a low beta stock d. Hold a portfolio of high beta stocks - Correct Answer c. Buy a low beta stock
  3. The required return on stocks is derived from: a. Idiosyncratic risk b. Systematic risk c. Total risk

QUESTIONS AND ANSWERS UPLOADED 2024

d. Size of the portfolio - Correct Answer b. Systematic risk

  1. A prudent investor would seek a. The lowest risk possible b. The highest return possible c. An appropriate risk exposure d. Minimize the return-to-risk ratio - Correct Answer c. An appropriate risk exposure
  2. A stock whose return is affected substantially by a recession is: a. Low beta stock b. High beta stock c. Low PE stock d. High PE stock - Correct Answer b. High beta stock
  3. Which factor does not affect WACC a. Firm risk exposure b. Treasury yields c. Tax Rate

QUESTIONS AND ANSWERS UPLOADED 2024

  1. Why does a firm calculate WACC? a. It is needed to calculate net income b. It is the cost of financing the firm c. Required input on SEC 10-K report d. Required by GAAP - Correct Answer b. It is the cost of financing the firm
  2. Which rule best described investor behavior? a. Maximize expected return b. Minimize risk c. Maximize the return-to-risk ratio d. Minimize the return-to-risk ratio - Correct Answer c. Maximize the return-to- risk ratio
  3. A firm's stock price depends upon a. Its current earnings per share b. Its current dividend rate c. Expected dividends in the future d. Its S&P rating - Correct Answer c. Expected dividends in the future

QUESTIONS AND ANSWERS UPLOADED 2024

  1. Which measures sales growth that can be financed internally? a. DFN b. CFO c. SGR d. DFN - Correct Answer c. SGR
  2. Why are accurate sales forecast desirable? a. To plan resource acquisition b. To calculate price c. To reduce working capital d. Requirement for 10-K report - Correct Answer a. To plan resource acquisition
  3. What components of ICF are included in Gross PPE a. Cost of asset b. Shipping & installation expense c. Increase in Net Working Capital d. Both a and b - Correct Answer d. Both a and b

QUESTIONS AND ANSWERS UPLOADED 2024

  1. Firms with high leverage a. Have lower net income b. Have more volatile profits c. Have higher required returns d. Both b and c - Correct Answer d. Both b and c
  2. Excessive leverage will likely result in a. Increased WACC b. Reduced stock price c. Reduced profits d. Both a and b - Correct Answer b. Reduced stock price
  3. Why might a firm buy back stock a. Increase financial leverage b. Reduce financial leverage c. Reduce operating leverage d. Increase operating leverage - Correct Answer a. Increase financial leverage
  4. A bond's market risk is measured by

QUESTIONS AND ANSWERS UPLOADED 2024

a. S&P rating b. Duration c. Beta d. Both a and c - Correct Answer b. Duration

  1. Which ratio might be used in working capital management a. ROE b. Quick Ratio c. Fixed asset turnover d. None of the above - Correct Answer b. Quick Ratio
  2. What happens if a firm adopts a project with negative NPV? a. Stock price increases b. Stock price decreases c. Stock price not impacted by NPV d. Value of the firm increases - Correct Answer b. Stock price decreases
  3. The market risk premium is compensation for? a. Idiosyncratic risk