Introduction to Financial Management

The ____ is created by a financial relationship between supplier and users of short-term funds.

• Financial Market

• Money Market

• Capital Market

• Financial institutions

A business owned by a single individual is called a:

• corporation.

• sole proprietorship.

• general partnership.

• limited partnership.

A business created as a distinct legal entity composed of one or more individuals or entities is called a:

• Corporation

• Sole proprietorship.

• General partnership

• Limited partnership

Which one of the following business types is best suited to raising large amounts of capital?

• sole proprietorship.

• limited liability company

• corporation

• general partnership.

Which of the following is not a financial institution?

• A pension fund

• A newspaper publisher

• A commercial bank

• An insurance company

Which of the following is not a service provided by financial institutions?

• Buying the business of customers

• Investing customers' savings in stock and bonds

• Paying savers' interest on deposited funds

• Lending money to customers

By definition, money market involves the buying and selling of

• funds that mature in more than one year.

• flows of funds.

• stocks and bonds.

• short-term funds

Long-term debt instruments used by both government and business are known as

• bonds

• equities

• stocks

• bills

Which of the following represent cash outflows from a corporation?

I. issuance of securities

II. payment of dividends

III. Net profits

IV. payment of salaries/wages

• A. II and IV only

• B. I and IV only

• C. I, II, and IV only

• D. II, III, and IV only

Which of the following would be considered an advantage of the SOLE PROPRIETORSHIP form of business organization?

• unlimited life

• wide access to capital

• income taxed at only one level

• pooled expertise