Business Finance (1)

1. Large Australian company stocks such as BHP and Telstra:

• can only trade on the ASX.

• can trade on the stock exchange of their choosing as long as they qualify for listing.

• trade only in dealer markets.

• are sold to investors as private placement and are held to maturity.

The person responsible for managing a firm's cash flow, credits and capital expenditures is called a

• broker.

• stakeholder.

• chief accountant.

• treasurer.

The most important function of a financial market is:

• to facilitate the flow of funds between lenders and borrowers

• to provide a market for shares.

• to provide information about an issuing company's financial situation.

• to secure profits for brokers and agents.

A primary financial market is one that:

• involves the sale of existing securities.

• offers securities with the highest expected return.

• offers the greatest choice of shares and debentures.

• involves the sale of securities for the first time.

Secondary markets:

• allow borrowers to raise long-term funds.

• facilitate capital-raising in the primary market.

• allow borrowers to raise short-term funds.

• facilitate all of the given answers.

The top financial officer in a firm is commonly referred to as the:

• chief financial officer

• president of finance.

• controller.

• finance manager.

The amount of debt and equity used by a firm to finance its operations is called the firm's:

• debt ratio.

• working capital ratio.

• capital structure.

• financial position.

Short-term assets and short-term liabilities are referred to as the firm's:

• cash flow.

• capital budget.

• capital structure

• working capital.

The management of a firm's cash, inventory, and payables is referred to as:

• cash-flow forecasting.

• asset management.

• capital management.

• working capital management.

A business organisation that is similar to a sole proprietorship but has two or more owners is called a:

• limited liability company.

• corporation.

• dual company.

• partnership.