Financial Management Quiz

What is the main goal of profit maximization?

• Maximizing shareholder wealth

• Increasing market share

• Minimizing expenses

• Enhancing employee skills

What is the primary function of the primary market?

• Dealing with securities issued for the first time

• Promoting liquidity of financial assets

• Trading previously issued securities

• Providing investment advice

What is the role of the CFO in a firm?

• Managing firm finances

• Overseeing resource mobilization

• Managing firm operations

• Providing government services

What is the purpose of credit decisions in financial firms?

• Providing customer service

• Automating trade decisions

• Maximizing profits

• Minimizing default risk

What is the main focus of the money market?

• Promoting liquidity of financial assets

• Trading short-term instruments

• Trading long-term assets

• Issuing new securities

What is the significance of agency theory in finance?

• Manages investment portfolios

• Predicts stock prices

• Analyzes market trends

• Explains relationships between principals and agents

What is the main objective of shareholder wealth maximization?

• Increasing employee salaries

• Enhancing customer service

• Minimizing company expenses

• Maximizing market value of shares

What are the functions of financial markets?

• Promote liquidity of physical assets

• Provide professional investment advice

• Facilitate access to short and long term funds

• Allocate funds to non-productive units

What is the purpose of liquidity decisions in finance?

• Manage day-to-day finance requirements

• Maximize shareholder wealth

• Provide financial services

• Make investment decisions

What is the main role of the board of directors in a firm?

• Overseeing resource mobilization

• Top governing body responsible for oversight

• Managing firm finances

• Providing government services