Financial Management CH1

What is the primary focus of financial management?

• Employee satisfaction

• Maximizing shareholder wealth

• Increasing market share

• a)       Reducing costs

Which of the following is NOT an element of financial management?

• Investment decisions

• Dividend decisions

• Marketing strategy

• Financial decisions

What is the main objective of financial management?

• Maximizing sales

• Maximizing profits

• Maximizing shareholder wealth

• Minimizing costs

Which decision involves determining the mix of debt and equity capital in a company?

• Investment decision

• Financing decision

• Dividend decision

• Working capital decision

What is the primary responsibility of a finance manager?

• Marketing strategy

• Procurement of raw materials

• Managing cash flows

• Employee recruitment

What is the legal reason for finance managers to focus on maximizing shareholder wealth?

• Regulatory requirements

• Ethical considerations

• Shareholders' ownership in the firm

• Tax benefits

Which party is responsible for channeling funds from those with surplus funds to those with a shortage of funds?

• Financial managers

• Investors

• Financial markets

• Government

Which market deals with short-term securities with a maturity of less than one year?

• Capital market

• Primary market

• Secondary market

• Money market

What is the main role of commercial banks in the money market?

• Providing long-term loans to firms

• Facilitating the purchase of government bonds

• Converting cash reserves into short-term assets

• Issuing new shares to the public

Which market includes securities with a life of more than one year?

• Primary market

• Secondary market

• Money market

• Capital market