Test your basic knowledge |

Managerial Finance

Subject : business-skills
Instructions:
  • Answer 50 questions in 15 minutes.
  • If you are not ready to take this test, you can study here.
  • Match each statement with the correct term.
  • Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. A potential conflict of interest between outside shareholders (owners) and managers who make decisions about how to operate the firm.






2. A paid individual - corporation - or commercial bank trust department that acts as the third party to a bond indenture and can take specified actions on behalf of the bondholders if the terms of the indenture are violated






3. Assumes that the stock will pay the same dividend each year - year after year






4. A rising trend in the prices of most goods and services






5. Issued shares of common stock held by investors - this includes private and public investors.






6. Is usually applied to debt instruments such as bank loans or bonds; the compensation paid by the borrower of funds to the lender; from the borrower's point of view - the cost of borrowing funds.






7. Is a stream of equal periodic cash flows - over a specified time period. These cash flows can be inflows of returns earned on investments or outflows of funds invested to earn future returns.






8. Money flows directly from investor to corporation - $ flows from investor to corp through an investment bank ('privileged subscription')






9. Investment bank underwrites issuance - risk is on the investment bank






10. Is usually applied to equity instruments such as common stock; the cost of funds obtained by selling an ownership interest.






11. A portion of a security registration statement that describes the key aspects of the issue - the issuer - and its management and financial position






12. Money has a time value - Risk requires a reward - Cash flow is what matters - Market prices are generally correct - and Conflicts of interest create agency problems.






13. The process of finding present values; the inverse of compounding interest






14. Preferred stock is preferred stock for which passed (unpaid) dividends do not accumulate.






15. Mixture of debt and equity to finance long-term investments






16. A widely cited dividend valuation approach that assumes that dividends will grow at a constant rate - but a rate that is less than the required return.






17. The risk that a company will be unable to pay the bond's face amount or interest payments as it becomes due.






18. Allows bondholders to change each bond into a stated number of shares of common stock






19. The actual rate of interest charged by the supplier of funds and paid by the demander






20. Type of bonds representing property put up as collateral






21. Interest on an annual basis deducted in advance on a loan






22. Interest compounds four times per year.






23. Privately raised external equity capital used to fund early-stage firms with attractive growth prospects.






24. Price of assets traded fully reflect all available information - and investors must be rational






25. The current dollar value of a future amount - the amount of money that would have to be invested today at a given interest rate over a specified period to equal the future amount.






26. Ownership in a Corporation (stock)






27. Shares of ownership in a public corporation. The shareholder has voting rights in the corporation.






28. Investment bank underwrites issuance - risk is on the investment bank - bid on shares






29. Shares of common stock that have been put into circulation. - = outstanding shares + treasury stock






30. The rate that creates equilibrium between the supply of savings and the demand for investment funds in a perfect world - without inflation - where suppliers and demanders of funds have no liquidity preferences and there is no risk






31. High-risk - high-interest bonds






32. Inflation - opportunity cost - risk






33. An unsecured type of bond that pays interest only when the debtor company has positive earnings.






34. Estimates stock value by multiplying the firm's expected earnings per share (EPS) by the average price/earnings (P/E) ratio for the industry.






35. Is a complex and lengthy legal document stating the conditions under which a bond has been issued.






36. All else equal - the longer the time to maturity - the greater the interest rate risk to the investor






37. Is an annuity for which the cash flow occurs at the beginning of each period.






38. Providers of venture capital; typically - formal businesses that maintain strong oversight over the firms they invest in and that have clearly defined exit strategies.






39. Investors bid to buy shares - risk is on corporation

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183


40. Periodic payments of profit to the shareholders






41. When interest is credited twice a year.






42. The value at a given future date of an amount placed on deposit today and earning interest at a specified rate. Found by applying compound interest over a specified period of time.






43. The percentage of a bond's par value that will be paid annually - typically in two equal semiannual payments - as interest.






44. A statement transferring the votes of a stockholder to another party






45. Allows common stockholders to maintain their proportionate ownership in the corporation when new shares are issued - thus protecting them from dilution of their ownership.






46. Is interest that is earned on a given deposit and has become part of the principal at the end of a specified period.






47. Day to day operations - how much cash to keep on hand - how much inventory to keep on hand - will we allow to buy on credit?






48. First time selling stock - indirectly with financial intermediary - indirectly with investment bank






49. Is preferred stock with a stated face value that is used with the specified dividend percentage to determine the annual dollar dividend.






50. Preferred stock is preferred stock for which all passed (unpaid) dividends in arrears - along with the current dividend - must be paid before dividends can be paid to common stockholders







Sorry!:) No result found.

Can you answer 50 questions in 15 minutes?


Let me suggest you:

Browse all subjects

Browse all tests

Most popular tests



Major Subjects

Tests & Exams


AP
CLEP
DSST
GRE
SAT
GMAT

Browse all subjects

Browse all tests

Most popular tests