KNOWLEDGE TEST - TOPIC 1

Which of the following is NOT one of the basic decision in finance

• Capital budgeting decision

• capital structure decision

• working capital management decision

• business operation decision

When two or more people share ownership of a single business, this is called

• Sole proprietorship

• corporation

• partnership

• companies

'How should the firm raise money to finance the investment' is related to

• capital budgeting decision

• capital structure decision

• long term operation decision

• working capital management

Market in which new securities are initially issued for the first time is known as

• Primary market

• Secondary market

• private placement

• financial market

Which of the following is NOT the advantage of corporation

• Limited liability

• Easy to raise capital

• Owner of the business entitled for all the firms profit

• life of the business not tied to life of investors

Institution that provide savers with a secure place to invest and offer loans to individual

• Investment banks

• Public offering

• private placement

• commercial banks

Which of the following is not a long term investment

• Purchasing a house

• Venture into new business

• Purchase a machinery for production

• purchase a 9 month corporate bonds

Which of the following is one of the advantage of sole proprietorship

• Various access of financing

• Liability is restricted to amount invested

• Easy to form

• Unlimited liability