Finman RAR 1

From a financial point of view, a company that decides to develop new product is making ...

• a financing decision

• an investment decision

• a capital structure decision

• a cash flow decision

What do we learn in Finance?

• How political, social, and economic forces affect corporations

• How to maximizing profits

• How to reducing risk

• how people and businesses make investment decisions and how to finance those decisions

Which of the following is NOT an advantage of the sole proprietorship?

• Limited liability

• No time limit imposed on its existence

• No legal requirements for starting the business

• None of the above

Assume that you are starting a business that is expected to grow very quickly and a great deal of capital will be needed soon. What type of business organization would you choose?

• Corporation

• General Partnership

• Sole Proprietorship

• Limited partnership

Which of the following types of business forms is least risky to investors?

• Sole proprietorship

• Limited partnership

• General partnership

• A public corporation

Which forms of organization are free of initial legal requirements?

• Sole proprietorship

• Partnership

• Corporation

• Both A and B

The principal participants in in the financial markets are ...

• businesses, banks, government

• borrowers, savers, financial institutions.

• mutual finds, hedge funds, investment bankers

• dealers, brokers, regulators

Firms that wish to raise funds for investment purposes issue securities in the ...

• primary and secondary markets

• primary markets

• secondary markets

• intermediary markets

Bonds are less risky than are stocks because their return is more predictable

• TRUE

• FALSE

A company has the option to pay bond interest or not

• TRUE

• FALSE