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Business Finance - Module 1

Total questions: 20

Worksheet time: 15mins

Name
Class
Date
1.

They are concerned with the procuring of funds that can be used for long-term investing and financing daily operations.

a)

Financial Decisions

b)

Financing Decisions

c)

Business Decisions

d)

Marketing Decisions

2.

It is the area within finance that deals with the management of individual or institutional funds.

a)

Financial Investment

b)

Financial Management

c)

Investment Management

d)

Business Mangement

3.

It is one of the critical tasks in financial management in a company.

a)

Financial Risk

b)

Risk Management

c)

Entrepreneurial Risk

d)

Risk Decision

4.

This will produce theories that will lead investors in selecting the appropriate interest rates.

a)

Capital Management Theory

b)

Financial Market Theory

c)

Market Theory

d)

Capital Market Theory

5.

They are concerned with the use of funds – the buying/selling and holding of all types of assets.

a)

Financial Decisions

b)

Financing Decisions

c)

Investment Decisions

d)

Market Decisions

6.

It is the application of economic principles to decision-making that will involve the allotment of money under the conditions of uncertainty.

a)

Finance

b)

Market

c)

Entrepreneurial

d)

Management

7.

It deals with the study of decisions in transactions where one party has lot of information than the other.

a)

Information Asymmetry

b)

Symmetric Information

c)

Informational Asymmetry

d)

Information Symmetry

8.

It is a financial instrument in which the issuer agrees to pay the investor interest, plus repay the amount borrowed.

a)

Credit

b)

Debt

c)

Debit

d)

Loan

9.

These are costs associated with assessing a financial instrument’s investment attributes.

a)

Search Cost

b)

Financial Cost

c)

Information Cost

d)

Market Cost

10.

This refers to any distribution of a company’s earnings.

a)

Profit

b)

Dividends

c)

Returns

d)

Proceeds

11.

A company’s (a)   is a framework of reaching its aim of maximizing owner’s wealth.

12.

The (a)   of a company is the combination of debt and equity that management selects to raise to finance the assets of the company.

13.

The (a)   is simply the set of investment manager must choose a portfolio strategy that is coherent with the investment objectives and investment policy guidelines.

14.

The fundamental principle of (a)   is that the value of any financial asset is the present value of the expected cash flows.

15.

An investor who will go after an investment strategy that seeks to (a)   should believe that the sector of the financial market to which the strategy is applied is not highly price efficient.

16.

If a market is highly (a)   , it is very hard for investors to earn returns that are bigger than those expected for the investment’s level of risk.

17.

A (a)   can be in the form of a note, bond, or loan. The issuer must pay interest payments, which are fixed contractually.

18.

Investors interchange (a)   in a financial market.

19.

A (a)   is a financial instrument whereby the borrower promises to repay the maturity value at a specified period of time beyond one year.

20.

The primary role of derivative instruments is to provide a (a)   vehicle for protecting against various types of risk encountered by investors and issuers.