Corporate Finance Quiz

Which of the following is NOT a type of business organization?

• Sole Proprietorship

• Partnership

• Corporation

• Syndicate

In a sole proprietorship, the owner has:

• Limited liability

• Unlimited liability

• No liability

• Liability only up to the amount invested

Which business structure allows owners to have limited liability while being taxed as personal income?

• Sole Proprietorship

• Partnership

• Limited Liability Company (LLC)

• Corporation

The primary goal of a financial manager is to:

• Maximize profits

• Minimize costs

• Maximize shareholder wealth

• Ensure company growth

Which of the following is a primary market transaction?

• Buying shares on the NYSE

• A company issuing new bonds to investors

• An investor selling shares to another investor

• Trading stocks on the NASDAQ

Which of the following best describes a corporation?

• A business owned by a single individual

• A legal entity separate from its owners

• A business with unlimited liability for its owners

• A temporary business arrangement

Which of the following statements is true regarding the board of directors?

• They are involved in daily operations

• They are elected by shareholders

• They have unlimited liability

• They cannot be removed once elected

A financial manager's responsibilities include all of the following EXCEPT:

• Making investment decisions

• Making financing decisions

• Managing cash flow

• Auditing financial statements

Which of the following is an example of a secondary market transaction?

• A company issuing new stock

• An investor buying shares from another investor

• A company repurchasing its own stock

• A private placement of securities

Which of the following is NOT a function of financial intermediaries?

• Pooling resources of small savers

• Providing liquidity

• Insuring investments against loss

• Diversifying risk