Business Finance Exam Questions

What is the primary goal of financial management?

• Maximizing sales revenue

• Ensuring customer satisfaction

• Maximizing shareholder wealth

• Reducing employee workload

What is the process of planning and controlling a company's financial resources called?

• Financial Planning

• Market Research

• Strategic Management

• Risk Assessment

How does financial management contribute to business success?

• By increasing production capacity

• By ensuring efficient use of financial resources

• By reducing the number of employees

• By focusing solely on customer satisfaction

How does the role of a financial manager differ from that of a marketing manager?

• A financial manager focuses on investment decisions, while a marketing manager focuses on product sales

• A financial manager handles employee relations, while a marketing manager manages financial risks

• A financial manager creates advertisements, while a marketing manager prepares balance sheets

• Both have the same responsibilities in a company

Why is it important for a business to analyze its cash flow?

• To increase customer loyalty programs

• To compare its products with competitors

• To determine the number of employees needed

• To track the movement of money in and out of the company

Which financial manager function involves deciding how to finance long-term investments?

• Operating decisions

• Financing decisions

• Investing decisions

• Dividend policies

Which of the following best describes a financial institution?

• A company issuing shares

• A marketplace for trading assets

• A company providing financial services

• A legal agreement with monetary value

Which is a financial instrument?

• Commercial bank

• Insurance company

• Corporate bond

• Stock exchange

How do financial institutions differ from financial markets?

• Deal in bonds vs. deal in stocks

• Exchange assets vs. offer banking services

• Regulate markets vs. provide loans

• Provide services vs. facilitate trading

Why are financial markets important?

• Help businesses and individuals access funds

• Create financial institutions

• Fund only government projects

• Issue insurance policies