PIF3013 CHAPTER 1

What is finance primarily concerned with?

• Hiring employees

• Creating new businesses

• Transferring money among businesses

• Marketing products

What is the main role of financial managers?

• To manage human resources

• To decide how to invest the firm's funds

• To oversee production

• To create marketing strategies

Which decision is considered the most important in a firm?

• Financing Decision

• Investment Decision

• Asset Management Decision

• Marketing Decision

What does wealth maximization focus on?

• Reducing costs

• Maximizing the total market value of shareholders' stock

• Maximizing profits in the short term

• Increasing sales volume

Which market deals with short-term securities?

• Money Market

• Bond Market

• Capital Market

• Stock Market

What is one of the roles of a financial manager?

• Forecasting and planning

• Conducting market research

• Designing products

• Managing customer service

What is a disadvantage of profit maximization?

• It considers risk

• It emphasizes long-term goals

• It is difficult to calculate

• It ignores risk and real-world complexities

What do financial institutions do?

• Conduct market analysis

• Manage employee relations

• Channel savings into loans or investments

• Create new businesses

What is the focus of the financing decision?

• Determining sales growth rates

• Managing production costs

• Deciding how to obtain funds

• Choosing marketing strategies

What is one advantage of shareholders' wealth maximization?

• It ignores the timing of returns

• It focuses only on short-term profits

• It considers risk in financial decisions

• It is easy to calculate