FIN358 POP QUIZ TOPIC 1

The long-run objective of financial management is to:

• maximize earnings per share.

• maximize the value of the firm's common stock.

• maximize return on investment.

• maximize market share.

Investment is the:

• Net addition made to the nations capital stocks

• persons commitment to buy a flat or a house

• employment of funds on assets to earn returns

• employment of funds on good and services that are used for production purpose

Technically, investments include:

• only financial assets

• only marketable assets

• financial and real assets that is marketable or non- marketable

• only financial and real assets that is marketable

Speculator is a person

• Who evaluates the performance of the company

• who uses his own funds only

• who is willing to take risk for high return

• who considers heresays and market behaviours

Which of the following would be considered a risk-free investment?

• gold

• equity in a house

• high-grade corporate bonds

• treasury bills

The ------- is the risk free investment

• savings account

• certificate of deposit

• treasury bill

• treasury bond

Most investors are risk averse which means:

• they will assume more risk only if they are compensated by higher expected return

• they will always invest in the investment with the lowest possible risk

• they actively seek to minimize their risks

• they avoid the stock market due to the high degree of risk

Horse racing, game of cards, lottery are the typical examples of:

• Investment

• Speculation

• Gambling

• Arbitrage

Which of the following is not an investment?

• wage

• stocks

• property

• shares

_______ is the use of long-term savings to earn a financial return.

• investing

• saving

• retirement

• all of the above