Financial Management | Chapter 1 | Part 4 | MBA MCQs | FM
Finacial Management MCQs
- The controller's responsibilities are primarily…………..in nature, while the treasurer's responsibilities are primarily related to………….
- operational; financial management
- financial management; accounting
- accounting; financial management
- financial management; operations
- In the US, the………………..has been given the power to adopt auditing, quality control, ethics, and disclosure standards for public companies and their auditors as well as investigate and discipline those involved.
- American Institute of Certified Public Accountants (AICPA)
- Financial Accounting Standards Board (FASB)
- Securities and Exchange Commission (SEC)
- public Company Accounting Oversight Board (PCAOB)
- A company's………….is (are) potentially the most effective instrument of good corporate governance.
- common stock shareholders
- board of directors
- top executive officers
- all of these
- The Sarbanes-Oxley Act of 2002 (SOX) was largely a response to:
- a series of corporate scandals involving Enron, WorldCom, Global Crossing, Tyco and numerous others.
- charges of excessive compensation to top corporate executives.
- rising complaints by investors and security analysts over the financial accounting for stock options
- a dramatic rise in the US trade deficit.
- ___________ refers to meeting the needs of the present without compromising the ability of future generations to meet their own needs.
- Corporate Social Responsibility (CSR)
- Sustainability
- Convergence
- Green Economics
- The field of finance is closely related to the fields of:
- statistics and economics
- economics and accounting
- statistics and risk analysis
- accounting and comparative return analysis
- The first area of study to benefit from the focus in the 1950's to a more analytical, decision oriented approach was:
- capital budgeting (allocating financial capital to the purchase of plant and equipment)
- cash and inventory management
- capital structure formulation (the balance between liabilities and equity) D. dividend policy ( the relationship between dividends and earnings)
- The ultimate measure of performance is:
- the amount of the firm's earnings
- return on the firm's total assets
- the firm's profit margin
- how the earnings are valued by the investor
- Which of the following is not the responsibility of financial management?
- allocation of funds to current and capital assets
- preparation of the firm's accounting statements
- development of an appropriate dividend policy
- obtaining the best mix of financing alternatives
- Which of the following are not among the daily activities of financial management
- sale of shares and bonds
- the receipt and disbursement of funds
- inventory control
- credit management
- A main benefit to the corporate form of organization is:
- double taxation of corporate income
- limited liability for the corporate shareholders
- simplicity of decision making and low organizational complexity
- a major management role exists for the firm's owners
- In analyzing the firm, the investor should consider:
- the risk inherent in the firm's operation
- the quality and reliability of the firm's reported earnings
- all of the above should be considered
- the time patterns over which the firm's earnings increase/decrease
- Agency theory examines the:
- relationship between the owners and managers of the firm
- insurability of the firm's assets
- relationship between dividend policy and firm value
- value of the firm relative to other firms in the industry
- Financial markets:
- exist as a vast global network of individuals and financial institutions
- circulate information quickly that affects prices of securities
- include a broad group representing lenders, borrowers, owners, institutional investors, corporations, government units and others
- all of the above
- Capital is allocated by financial markets by:
- a lottery system between investment dealers
- pricing securities based on their risk and expected future cash flows
- by pricing risky securities higher than low-risk securities
- by a government risk-rating system based on AAA for low risk and CCC for high risk
- The allocation of capital is determined by:
- expected rates of return.
- the initial sale of securities in the primary market
- the Bank of Canada
- the size of the federal debt
- The mix of debt and equity in a firm is referred to as the firm's:
- primary capital
- capital structure
- cost of capital
- capital composition
- The main focus of finance for the last 40 years has been
- mergers and acquisitions
- risk-return relationships
- inflation
- conglomerate firms
- To financial analysts, "working capital" means the same thing as __________.
- total assets
- current assets minus current liabilities.
- fixed assets
- current assets
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