Chapter 17 Financial Management

The senior financial manager has the title of ________.

• chief financial officer
• chief operations officer
• treasurer
• controller

Which of the following individuals has the direct responsibility for shareholder relations?

• Controller
• Chief financial officer
• Chief executive officer
• Treasurer

In the typical firm, the ________ is the chief accounting manager.

• chief financial officer
• treasurer
• controller
• chief executive officer

Which of the following is the best definition of financial risk?

• Risk is the possibility that an investment will lose money.
• Risk is the possibility that an investment will earn a negative return.
• Risk is the possibility that an investment's actual return will be less than its expected return.
• Risk is the uncertainty regarding the gain or loss from an investment.

The gain or loss that results from an investment over a specified period of time is known as ________.

• risk
• return
• uncertainty
• expected value

A(n) ________ is a document that specifies the funds a firm will need for a period of time, the timing of inflows and outflows, and the most appropriate sources and uses of funds.

• asset management plan
• budget
• strategic plan
• financial plan

A company's financial plan should answer all of the following questions EXCEPT ________.

• What is the contingency plan in case of bankruptcy?
• What funds will the firm require during the appropriate period of operations?
• How will it obtain the necessary money?
• When will it need more cash?

All of the following are considered to be marketable securities EXCEPT ________.

• treasury bills
• commercial paper
• repurchase agreements
• bonds

All of the following actions result in equity capital EXCEPT ________.

• issuing bonds
• liquidating assets
• issuing stock
• reinvesting earnings

Kaitlyn's company needs to obtain funds in order to keep the business going; however, she does not want stockholders influencing the direction of her company. What type of financing should Kaitlyn acquire?

• Equity capital
• Combination of debt and equity capital
• Angel investor
• Debt capital