This document contains a chapter summary on financial management and securities markets. It includes 23 true/false questions, 15 multiple choice questions, and 1 essay question assessing understanding of key concepts. The chapter discusses managing a company's current assets and liabilities, investing idle cash in marketable securities, and sources of short-term financing like trade credit and bank loans. It emphasizes minimizing cash on hand, maximizing returns on short-term assets, and different short-term investment and financing options available to companies.
Tải bài khóa luận tài chính ngân hàng với đề tài: Ứng dụng mô hình Z-Score trong Xếp hạng tín dụng khách hàng Doanh nghiệp tại Ngân hàng Thương mại cổ phẩn Đầu tư và Phát triển Việt Nam – Chi nhánh Thừa Thiên Huế. ZALO/TELEGRAM 0917 193 864
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PHÁT TRIỂN SẢN PHẨM BAO THANH TOÁN TẠI NGÂN HÀNG CÔNG THƯƠNG VIỆT NAMvietlod.com
Từ cuối năm 2006, Việt Nam đã gia nhập WTO và trở thành thành viên chính thức của tổ chức này. Theo cam kết gia nhập WTO, từ năm 2008, các tổ chức tài chính tín dụng nước ngoài được tham gia ngày một mở rộng và sâu hơn trong lĩnh vực tài chính ngân hàng. Đây là một thách thức đối với ngành tài chính ngân hàng Việt Nam. Chính vì thế, đa dạng hóa và phát triển sản phẩm mới là một trong những chiến lược để tồn tại và phát triển của bất cứ ngân hàng Việt Nam nào. Muốn đạt mục tiêu đó, các định chế tài chính Việt Nam không còn con đường nào khác là phải nhanh chóng đưa vào áp dụng các sản phẩm tài chính mới đã được áp dụng trên thế giới, trong đó có nghiệp vụ bao thanh toán (factoring). Bao thanh toán nếu được triển khai tích cực và hiệu quả, sẽ góp tên vào danh mục các sản phẩm ngân hàng, góp phần nâng cao tính cạnh tranh của ngân hàng Việt Nam so với các ngân hàng nước ngoài.
http://nckh.vietlod.com/
Tải bài khóa luận tài chính ngân hàng với đề tài: Ứng dụng mô hình Z-Score trong Xếp hạng tín dụng khách hàng Doanh nghiệp tại Ngân hàng Thương mại cổ phẩn Đầu tư và Phát triển Việt Nam – Chi nhánh Thừa Thiên Huế. ZALO/TELEGRAM 0917 193 864
Nhận viết luận văn đại học, thạc sĩ trọn gói, chất lượng, LH ZALO=>0909232620
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Download luận văn đồ án tốt nghiệp ngành kế toán với đề tài: Hoàn thiện công tác kế toán doanh thu, chi phí và xác định kết quả kinh doanh tại Công ty Cổ phần SIVICO, cho các bạn làm luận văn tham khảo
PHÁT TRIỂN SẢN PHẨM BAO THANH TOÁN TẠI NGÂN HÀNG CÔNG THƯƠNG VIỆT NAMvietlod.com
Từ cuối năm 2006, Việt Nam đã gia nhập WTO và trở thành thành viên chính thức của tổ chức này. Theo cam kết gia nhập WTO, từ năm 2008, các tổ chức tài chính tín dụng nước ngoài được tham gia ngày một mở rộng và sâu hơn trong lĩnh vực tài chính ngân hàng. Đây là một thách thức đối với ngành tài chính ngân hàng Việt Nam. Chính vì thế, đa dạng hóa và phát triển sản phẩm mới là một trong những chiến lược để tồn tại và phát triển của bất cứ ngân hàng Việt Nam nào. Muốn đạt mục tiêu đó, các định chế tài chính Việt Nam không còn con đường nào khác là phải nhanh chóng đưa vào áp dụng các sản phẩm tài chính mới đã được áp dụng trên thế giới, trong đó có nghiệp vụ bao thanh toán (factoring). Bao thanh toán nếu được triển khai tích cực và hiệu quả, sẽ góp tên vào danh mục các sản phẩm ngân hàng, góp phần nâng cao tính cạnh tranh của ngân hàng Việt Nam so với các ngân hàng nước ngoài.
http://nckh.vietlod.com/
Nhận viết luận văn Đại học , thạc sĩ - Zalo: 0917.193.864
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20511
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Đề cương chi tiết kế toán doanh thu, chi phí và xác định kinh doanh, kế toán xác định kết quả kinh doanh, đề cương báo cáo thực tập kế toán
This document contains a practice exam for a corporate finance course. It includes 25 multiple choice questions covering various corporate finance topics such as goals of the firm, forms of business organization, analysis of financial statements, valuation, capital budgeting, risk and rates of return. The questions require calculations and analysis to determine the best answer from the options provided.
For more content and questions refer (Copy and Paste this link)
https://clickuniv.com/introduction-to-accounting/
Follow me on: https://twitter.com/Afzalindian
Here in this slide fundamentals of accounting are discussed. After studying this slide you will be able to know
Meaning and Definition of Accounting
Attributes (Characteristics) of accounting
Functions of Accounting
Accounting Process
Bookkeeping
Objectives of Accounting
Advantages of Accounting
Limitations of Accounting
Users of Accounting Information
Systems of Accounting
Basis of Accounting
The document is the 2013 K to 12 Curriculum Guide for Mother Tongue education in the Philippines from grades 1 to 3. It discusses the framework and principles of Mother Tongue-Based Multilingual Education (MTB-MLE) which uses the student's native language as the primary language of instruction to build literacy and develop higher-order thinking skills before additional languages are introduced. MTB-MLE aims to produce lifelong learners who are proficient in their first, second, and third languages to succeed academically and contribute to society. The guide provides standards and examples for teaching meaning and accuracy in listening, speaking, reading, writing, and viewing in both the primer track focused on correctness and the story track focused on meaning.
A model for reducing information security risks due to human errorAnup Narayanan
My recent presentation at cOcOn, an international Cyber Security and Policing Conference in Trivandrum Kerala. The talk focuses on reducing information security risks due to human error using information security awareness and competence management solutions.
The document discusses entry strategies and strategic alliances for international business. It begins by examining Diebold's expansion into foreign markets through distribution agreements and joint ventures. It then outlines the key decisions around which markets to enter, when to enter, and the scale of entry. The document also analyzes different entry modes like exporting, licensing, franchising, joint ventures, and wholly owned subsidiaries. It concludes by discussing strategic alliances, partner selection, structuring alliances to reduce opportunism, and managing alliances over time.
This document discusses international marketing strategies. It explains that while basic marketing functions are the same worldwide, the marketing mix must often be adapted for local markets due to sociocultural, economic, legal and other differences. Companies must decide whether to standardize their marketing mix globally or adapt it in some markets. Consumer products usually require more adaptation than industrial products. Factors like culture, laws and the internet affect decisions around product, promotion, price and distribution strategies in international markets.
1) The Family Court is the proper forum to determine if Husband's bankruptcy discharge applies to debts from the divorce decree. The discharge order did not specify which debts were discharged.
2) Debts from a divorce decree, including a hold harmless provision requiring Husband to pay half the credit union debt, are not automatically discharged through bankruptcy.
3) Husband's nonspecific bankruptcy discharge does not override his obligation in the divorce decree to pay half the credit union debt. The Commissioner erred in ruling the debt was discharged.
This document provides an overview of the different sources of corporate financing, including internally generated funds, equity issues, and debt issues. It defines key terms related to equity such as common stock, preferred stock, treasury stock, authorized shares, issued shares, and outstanding shares. It also discusses the characteristics of different types of debt such as secured vs. unsecured debt, callable bonds, and convertible securities. The document uses examples to illustrate equity terminology and scenarios involving debt conversions.
Chapter 7 bankruptcy provides relief of future debt obligations by liquidating assets, except for keeping personal items like a house or car if associated payments are made. Chapter 13 requires individuals to pay back all or half of debts over 3 to 5 years depending on the court-approved plan, while still making regular payments on long-term debt and mortgages. Chapter 11 allows businesses and corporations to reorganize debts and continue operations, and Chapter 12 similarly helps commercial fishermen and farmers restructure payments to align with their seasonal revenue cycles.
The document covers various topics related to developing and pricing goods and services, including describing a total product offer, identifying different classes of consumer and industrial goods, and explaining the product development process and product life cycle. It provides learning goals for the chapter and examples to illustrate concepts like new product development, distributed product development, and classifying different types of consumer goods.
This document provides a test correlation table and learning objectives for a chapter on environmental forces that influence organizations. The table lists true/false, multiple choice, and essay style questions mapped to three levels of difficulty that assess comprehension of the chapter's four learning objectives. The objectives cover how economic/cultural factors influence organizations, the five competitive forces that affect industries, political/legal strategies used by managers, and how technological forces drive industry changes. The document provides a high-level overview of the chapter's content and assessment of student understanding through different question types.
Long term asset allocation portfolio in 2016 - results 6 monthsAleksandr Babylon
Half year pasts. Let's summarize the results.
Our long-term investment portfolio “Babylon Globe” gets 6.07% between 22-23 December 2015 and 1 July 2016. Rather good results for asset allocation portfolio. S&P 500 for this period increases in 3.75%.
This document outlines key concepts regarding sales contracts, including rights and duties of buyers and sellers, breach of contract, and warranties. It defines tender of performance and outlines what is required for proper tender by buyers and sellers. It also discusses remedies available to buyers and sellers in cases of breach, including cover, damages, and price recovery. The document explains express and implied warranties, including how warranties can be excluded, and key provisions of the Magnuson-Moss Warranty Act regarding consumer protections.
Nhận viết luận văn Đại học , thạc sĩ - Zalo: 0917.193.864
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Download luận văn đồ án tốt nghiệp ngành kế toán với đề tài: Hoàn thiện công tác kế toán vốn bằng tiền tại Công ty TNHH thương mại dịch vụ Kihin, cho các bạn làm luận văn tham khảo
Download luận văn thạc sĩ ngành kế toán với đề tài: Gian lận trong báo cáo tài chính của các công ty xây dựng niêm yết trên thị trường chứng khoán Việt Nam, cho các bạn có thể tham khảo
Nhận viết luận văn Đại học , thạc sĩ - Zalo: 0917.193.864
Tham khảo bảng giá dịch vụ viết bài tại: vietbaocaothuctap.net
Download luận văn đồ án tốt nghiệp ngành tài chính tín dụng với đề tài: Phát hành thẻ tại ngân hàng thương mại cổ phần Đông Nam Á chi nhánh Quảng Ngãi, cho các bạn làm luận văn tham khảo
20511
Nhận viết luận văn đại học, thạc sĩ trọn gói, chất lượng, LH ZALO=>0909232620
Tham khảo dịch vụ, bảng giá tại: https://vietbaitotnghiep.com/dich-vu-viet-thue-luan-van
Đề cương chi tiết kế toán doanh thu, chi phí và xác định kinh doanh, kế toán xác định kết quả kinh doanh, đề cương báo cáo thực tập kế toán
This document contains a practice exam for a corporate finance course. It includes 25 multiple choice questions covering various corporate finance topics such as goals of the firm, forms of business organization, analysis of financial statements, valuation, capital budgeting, risk and rates of return. The questions require calculations and analysis to determine the best answer from the options provided.
For more content and questions refer (Copy and Paste this link)
https://clickuniv.com/introduction-to-accounting/
Follow me on: https://twitter.com/Afzalindian
Here in this slide fundamentals of accounting are discussed. After studying this slide you will be able to know
Meaning and Definition of Accounting
Attributes (Characteristics) of accounting
Functions of Accounting
Accounting Process
Bookkeeping
Objectives of Accounting
Advantages of Accounting
Limitations of Accounting
Users of Accounting Information
Systems of Accounting
Basis of Accounting
The document is the 2013 K to 12 Curriculum Guide for Mother Tongue education in the Philippines from grades 1 to 3. It discusses the framework and principles of Mother Tongue-Based Multilingual Education (MTB-MLE) which uses the student's native language as the primary language of instruction to build literacy and develop higher-order thinking skills before additional languages are introduced. MTB-MLE aims to produce lifelong learners who are proficient in their first, second, and third languages to succeed academically and contribute to society. The guide provides standards and examples for teaching meaning and accuracy in listening, speaking, reading, writing, and viewing in both the primer track focused on correctness and the story track focused on meaning.
A model for reducing information security risks due to human errorAnup Narayanan
My recent presentation at cOcOn, an international Cyber Security and Policing Conference in Trivandrum Kerala. The talk focuses on reducing information security risks due to human error using information security awareness and competence management solutions.
The document discusses entry strategies and strategic alliances for international business. It begins by examining Diebold's expansion into foreign markets through distribution agreements and joint ventures. It then outlines the key decisions around which markets to enter, when to enter, and the scale of entry. The document also analyzes different entry modes like exporting, licensing, franchising, joint ventures, and wholly owned subsidiaries. It concludes by discussing strategic alliances, partner selection, structuring alliances to reduce opportunism, and managing alliances over time.
This document discusses international marketing strategies. It explains that while basic marketing functions are the same worldwide, the marketing mix must often be adapted for local markets due to sociocultural, economic, legal and other differences. Companies must decide whether to standardize their marketing mix globally or adapt it in some markets. Consumer products usually require more adaptation than industrial products. Factors like culture, laws and the internet affect decisions around product, promotion, price and distribution strategies in international markets.
1) The Family Court is the proper forum to determine if Husband's bankruptcy discharge applies to debts from the divorce decree. The discharge order did not specify which debts were discharged.
2) Debts from a divorce decree, including a hold harmless provision requiring Husband to pay half the credit union debt, are not automatically discharged through bankruptcy.
3) Husband's nonspecific bankruptcy discharge does not override his obligation in the divorce decree to pay half the credit union debt. The Commissioner erred in ruling the debt was discharged.
This document provides an overview of the different sources of corporate financing, including internally generated funds, equity issues, and debt issues. It defines key terms related to equity such as common stock, preferred stock, treasury stock, authorized shares, issued shares, and outstanding shares. It also discusses the characteristics of different types of debt such as secured vs. unsecured debt, callable bonds, and convertible securities. The document uses examples to illustrate equity terminology and scenarios involving debt conversions.
Chapter 7 bankruptcy provides relief of future debt obligations by liquidating assets, except for keeping personal items like a house or car if associated payments are made. Chapter 13 requires individuals to pay back all or half of debts over 3 to 5 years depending on the court-approved plan, while still making regular payments on long-term debt and mortgages. Chapter 11 allows businesses and corporations to reorganize debts and continue operations, and Chapter 12 similarly helps commercial fishermen and farmers restructure payments to align with their seasonal revenue cycles.
The document covers various topics related to developing and pricing goods and services, including describing a total product offer, identifying different classes of consumer and industrial goods, and explaining the product development process and product life cycle. It provides learning goals for the chapter and examples to illustrate concepts like new product development, distributed product development, and classifying different types of consumer goods.
This document provides a test correlation table and learning objectives for a chapter on environmental forces that influence organizations. The table lists true/false, multiple choice, and essay style questions mapped to three levels of difficulty that assess comprehension of the chapter's four learning objectives. The objectives cover how economic/cultural factors influence organizations, the five competitive forces that affect industries, political/legal strategies used by managers, and how technological forces drive industry changes. The document provides a high-level overview of the chapter's content and assessment of student understanding through different question types.
Long term asset allocation portfolio in 2016 - results 6 monthsAleksandr Babylon
Half year pasts. Let's summarize the results.
Our long-term investment portfolio “Babylon Globe” gets 6.07% between 22-23 December 2015 and 1 July 2016. Rather good results for asset allocation portfolio. S&P 500 for this period increases in 3.75%.
This document outlines key concepts regarding sales contracts, including rights and duties of buyers and sellers, breach of contract, and warranties. It defines tender of performance and outlines what is required for proper tender by buyers and sellers. It also discusses remedies available to buyers and sellers in cases of breach, including cover, damages, and price recovery. The document explains express and implied warranties, including how warranties can be excluded, and key provisions of the Magnuson-Moss Warranty Act regarding consumer protections.
This document provides an overview of analyzing financial statements and key ratios. It discusses understanding the business, industry, and economic factors. It then covers various commonly used ratios to analyze a company's profitability, liquidity, solvency, and market performance including return on equity, return on assets, current ratio, quick ratio, and price-to-earnings ratio. Sample calculations are shown for analyzing the financial statements of Home Depot using these different ratios.
This document provides a quiz for an economics course on foreign direct investment and political risk. It includes 20 multiple choice questions and true/false statements covering topics like the OLI paradigm for explaining FDI, modes of foreign market entry, and types of political risk faced by multinational enterprises. An answer key is not provided.
The document provides an overview of exporting, importing, and countertrade. It discusses the promise and pitfalls of exporting, improving export performance, export strategy, export and import financing including letters of credit and bills of lading. It also covers export assistance programs, countertrade arrangements including barter, counterpurchase, offset, buyback, and switch trading.
Here are the answers to the objective type questions:
1. D
2. B
3. C
4. B
5. A
6. B
7. A
8. C
9. A
10. B
11. A
12. C
13. B
14. B
15. A
16. B
17. C
18. B
19. C
20. C
This document discusses financial management and analysis for new ventures. It explains that financial management involves raising funds and managing finances to achieve high returns. New ventures use historical and pro forma financial statements like income statements, balance sheets, and cash flow statements to assess performance and forecast future finances. Financial ratios are calculated from these statements to evaluate objectives like profitability, liquidity, efficiency and stability. Budgets and forecasts are made based on sales estimates and industry benchmarks to aid financial planning.
The document discusses the relationship between marginal cost, average total cost, and average variable cost. It states that marginal cost curves always intersect average cost curves at the minimum point. When marginal cost exceeds average cost, average cost is rising. When marginal cost is less than average cost, average cost is falling. Marginal cost also indicates whether average variable cost is rising or falling in the same way.
This document discusses various types of short-term financing. It defines short-term financing as financing for one year or less, including short-term loans from banks, trade credit from suppliers, and commercial paper. The document outlines the advantages of short-term financing over long-term options and describes how firms can use accounts receivable and inventory as collateral for short-term loans. Various short-term financing sources and their costs are defined, including calculations for determining effective interest rates.
The document discusses equity financing options for firms. It defines primary and secondary markets, with primary markets involving the initial sale of new securities to raise capital, often via an IPO, while secondary markets allow existing securities to be traded among investors. When issuing equity, firms incur costs such as investment banking fees for services like underwriting an IPO. The document also outlines sources of equity financing for firms, including retained earnings, preferred stock, and venture capital.
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This document is a project report on bond portfolio management submitted for a Master of Business Administration degree. It includes an introduction to bonds, corporate bonds, and government bonds. It discusses the key components of bonds such as nominal principal amount, issue price, maturity date, and coupon payments. The report will analyze bond data and trends to evaluate objectives related to correlation and regression tests.
Dear students get fully solved assignments
Send your semester & Specialization name to our mail id :
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Dear students get fully solved assignments
Send your semester & Specialization name to our mail id :
“ help.mbaassignments@gmail.com ”
or
Call us at : 08263069601
(Prefer mailing. Call in emergency )
1. The document provides an overview of financial systems, markets, institutions, instruments and crises. It discusses topics such as direct and indirect finance, balance sheets, income statements, financial management decisions, business organizations, and goals of financial management.
2. Key concepts covered include financial instruments like stocks, bonds, and loans, as well as financial markets and institutions. Examples of major financial crises throughout history are also summarized such as the Panic of 1907, Credit Crisis of 1772, and Japan's Lost Decade.
3. The subprime mortgage crisis of 2008 and related Financial Crisis are examined in more depth, noting the role of easy credit availability, the housing bubble, and subsequent crash in housing prices.
The document contains a chapter on corporations and the financial manager from a textbook. It includes 54 true/false and multiple choice questions covering topics such as different forms of business organization, the distinguishing characteristics of corporations, and the roles and responsibilities of financial managers. The questions test understanding of concepts like limited liability, capital budgeting decisions, real versus financial assets, and the goals of the financial manager.
Mf0015 international financial management..smumbahelp
This document provides information about getting fully solved assignments. It gives a contact email and phone number to send requests to. It then provides details of an assignment for the subject International Financial Management, including the semester, course code, credits, marks and evaluation scheme. It lists 6 questions for the assignment along with sample answers for some of the questions. The questions cover topics like forward markets, interest rate parity theory, cash concentration strategies, foreign currency translation methods, international credit markets, and principles of taxation and double taxation.
The document provides an overview of securitization and the mortgage-backed securities market. It discusses how companies fund projects through equity and debt, and introduces securitization as a way to pool similar mortgage loans and issue securities backed by the pooled loans. It then covers the basics of fixed income markets, how mortgage payments are calculated, the process of issuing agency-conforming and non-conforming mortgage-backed securities, and the major investors in the MBS market like pension funds, insurance companies, and GSEs.
17 Commercial Bank OperationsCHAPTER OBJECTIVESThe specific ob.docxaulasnilda
17 Commercial Bank Operations
CHAPTER OBJECTIVES
The specific objectives of this chapter are to:
· ▪ describe the market structure of commercial banks,
· ▪ describe the most common sources of funds for commercial banks,
· ▪ explain the most common uses of funds for commercial banks, and
· ▪ describe typical off-balance sheet activities for commercial banks.
Measured by total assets, commercial banks are the most important type of financial intermediary. Like other financial intermediaries, they perform the critical function of facilitating the flow of funds from surplus units to deficit units.
17-1 BACKGROUND ON COMMERCIAL BANKS
Up to this point, the text has focused on the role and functions of financial markets. From this point forward, the emphasis is on the role and functions of financial institutions. Recall from Chapter 1 that financial institutions commonly facilitate the flow of funds between surplus units and deficit units. Commercial banks represent a key financial intermediary because they serve all types of surplus and deficit units. They offer deposit accounts with the size and maturity characteristics desired by surplus units. They repackage the funds received from deposits to provide loans of the size and maturity desired by deficit units. They have the ability to assess the creditworthiness of deficit units that apply for loans, so they can limit their exposure to credit (default) risk on the loans they provide.
17-1a Bank Market Structure
In 1985, more than 14,000 banks were located in the United States. Since then, the market structure has changed dramatically. Banks have been consolidating for several reasons. One reason is that interstate banking regulations were changed in 1994 to allow banks more freedom to acquire other banks across state lines. Consequently, banks in a particular region are now subject to competition not only from other local banks but also from any bank that may penetrate that market. This has prompted banks to become more efficient in order to survive. They have pursued growth also as a means of capitalizing on economies of scale (lower average costs for larger scales of operations) and enhanced efficiency. Acquisitions have been a convenient way to grow quickly.
As a result of this trend, there are less than half as many banks today as there were in 1985, and consolidation is still occurring. Exhibit 17.1 shows how the number of banks has declined over time, thereby increasing concentration in the banking industry. The largest 100 banks now account for about 75 percent of all bank assets versus about 50 percent in 1985. The largest five banks now account for more than 50 percent of bank assets, versus 30 percent in 2001. JPMorgan Chase & Company is the largest bank in the United States with about $2.3 trillion in assets, while Bank of America Corporation has about $2.2 trillion in assets and Citigroup Inc. has about $1.9 trillion in assets.
Large banks have expanded over time by acquiring othe ...
RISK MANAGEMENT 14CHAPTER 16 Working Capital M.docxSUBHI7
RISK MANAGEMENT 14
CHAPTER 16: Working Capital Management
Successful Firms Efficiently Manage Their Working Capital
Working capital management involves finding the optimal levels for cash, marketable securities, accounts receivable, and inventory, and then financing that working capital at the least cost. Effective working capital management can generate considerable amounts of cash.
As any small business person can tell you, one way to generate cash is to have your customers pay you more quickly than you pay your suppliers. Recognizing this point on a much larger scale, Amazon has created strong competitive advantages through its effective use of working capital management. When customers order books online from Amazon, they must provide a credit card number. Amazon then receives next-day cash, even before the product is shipped and before it has paid its suppliers.
Another key component of working capital management is efficient inventory usage. Best Buy, the large consumer electronics retailer, pays particular attention to inventories. To maintain sales, its stores must be well stocked with the goods customers are seeking at the time they are shopping. This involves determining what new products are hot, finding where they can be obtained at the lowest cost, and delivering them to stores in a timely manner. Dramatic improvements in communications and computer technology have transformed the way Best Buy manages its inventories. It now collects real-time data from each store on how each product is selling, and its computers place orders automatically to keep the shelves full. Moreover, if sales of an item are slipping, prices are lowered to reduce stocks of that item before the situation deteriorates to the point that drastic price cuts are necessary.
Working capital management has become particularly difficult in the declining economic environment following the recent financial crisis. Some companies have been stuck with unused inventory, while others are reluctant to purchase additional inventory until they see clear evidence that consumer spending has rebounded. Still other companies have found it more difficult to obtain short-term loans from financial institutions, so they have increasingly relied on trade credit from their suppliers as a substitute form of financing. At the same time, many suppliers are faced with a dilemma—in order to generate new sales they find it necessary to provide their customers with generous payment terms—but in doing so, they worry that in a weak economy many of these customers may not be able to pay them back in a timely fashion.
As you can see, effective working capital management is a continual balancing act that has an important influence on the company’s value. After studying this chapter, you should understand how working capital should be managed so as to maximize profits and stock prices.
Putting Things in Perspective
About 50% of the typical industrial or retail firm’s assets are he ...
The document discusses the distinction between financial institutions, financial instruments, and financial markets. It provides examples of different types of financial institutions like banks, insurance companies, and pension funds. It also explains classifications of financial markets based on term, type of issue, and gives examples of different types of markets like money markets, capital markets, and secondary markets.
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My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
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"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
1. Chapter 16 - Financial Management and Securities Markets
Chapter 16
Financial Management and Securities Markets
True / False Questions
1. (p. 489) One aspect of financial management involves managing funds for a business.
TRUE
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Easy
Learning Objective: 1
2. (p. 491) A lockbox is a technique for getting cash into a business's account faster.
TRUE
AACSB: Technology
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 1
3. (p. 491) A marketable security is a temporary investment of cash.
TRUE
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Easy
Learning Objective: 1
4. (p. 491) Commercial paper is issued by large companies and backed by collateral.
FALSE
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Easy
Learning Objective: 1
16-1
2. Chapter 16 - Financial Management and Securities Markets
5. (p. 492) Eurodollar deposits can only be made at banks located in London.
FALSE
AACSB: Technology
Bloom's Taxonomy: Knowledge
Difficulty: Easy
Learning Objective: 1
Multiple Choice Questions
6. (p. 489) Overall, financial management primarily involves acquiring and managing
A. equity.
B. funds.
C. liabilities.
D. inventory.
E. employees.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Easy
Learning Objective: 1
7. (p. 489) In the area of short-term assets and liabilities, a word that is synonymous with "short
term" is
A. minimal.
B. current.
C. small.
D. least.
E. fiat.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 1
16-2
3. Chapter 16 - Financial Management and Securities Markets
8. (p. 489) Cash, investments, accounts receivable, and inventory are also known as
A. current assets.
B. current liabilities.
C. long-term assets.
D. long-term liabilities.
E. fixed assets.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Easy
Learning Objective: 1
9. (p. 489) Current assets include all of the following except
A. accounts receivable.
B. accounts payable.
C. investments.
D. inventory.
E. cash.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 1
10. (p. 489) Short-term debt obligations that must be repaid within a year are
A. long-term assets.
B. long-term liabilities.
C. current liabilities.
D. current assets.
E. fixed liabilities.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 1
16-3
4. Chapter 16 - Financial Management and Securities Markets
11. (p. 489) All of the following are current liabilities except
A. accrued taxes.
B. short-term bank loans.
C. accounts payable.
D. marketable securities.
E. accrued salaries.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 1
12. (p. 489) If a financial manager focuses on monitoring and influencing the company's current
assets and liabilities, he or she is involved with
A. working capital.
B. current accounts.
C. long-term financing.
D. debt resolution.
E. savings enhancement.
AACSB: Reflective Thinking
Bloom's Taxonomy: Comprehension
Difficulty: Medium
Learning Objective: 1
13. (p. 489) A firm may increase its return to the business through improved management of
A. cash.
B. temporary investments.
C. inventory.
D. accounts receivable.
E. all of the above.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 1
16-4
5. Chapter 16 - Financial Management and Securities Markets
14. (p. 489) The goal of financial managers who focus on current assets is to
A. maximize returns on short-term assets.
B. minimize returns on short-term liabilities.
C. minimize returns on short-term assets.
D. decrease return on working capital.
E. none of the above.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 1
Scrambling: Lokced
15. (p. 490) Good financial managers minimize the amount of cash available to pay bills in
A. marketable securities.
B. transaction balances.
C. inventory.
D. the float.
E. banker's acceptances.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Hard
Learning Objective: 1
16. (p. 491) Because having idle cash on hand is undesirable, a manager may choose to invest in
A. credit cards.
B. debit cards.
C. working capital.
D. marketable securities.
E. capital outlay.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Easy
Learning Objective: 1
16-5
6. Chapter 16 - Financial Management and Securities Markets
17. (p. 490) Managing working capital by having a bank pick up payments and immediately
record them is known as
A. electronic funds transfer.
B. playing the float.
C. lockbox collections.
D. a transaction balance.
E. economic order quantity.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 1
18. (p. 491) To raise money for its operating expenses, the U.S. government may issue short-
term debt obligations called
A. commercial paper.
B. certificates of deposit.
C. banker's acceptances.
D. Treasury bills.
E. stock certificates.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 1
19. (p. 491-492) All of the following are ways to invest idle cash for the short term except
A. certificates of deposit.
B. Eurodollars.
C. Treasury bills.
D. commercial paper.
E. unsecured loans.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 1
16-6
7. Chapter 16 - Financial Management and Securities Markets
20. (p. 493) Which of the following can serve as a short-term source of funds during a cash
shortfall?
A. Inventory
B. Certificates of deposit
C. Accounts Receivable
D. Suppliers
E. Cutting workers' salaries
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 1
21. (p. 493) If a firm tries to produce goods just in time to meet sales demand, its level of
inventory will tend to be
A. relatively low.
B. very high.
C. relatively high.
D. excessive.
E. wasteful.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 1
22. (p. 493) Companies often keep a close watch on the amount of inventory on hand to
minimize costs. If a company produces inventory in a constant, level pattern, when sales go
down, its inventory level will
A. remain constant.
B. increase.
C. decrease.
D. be optimal.
E. be just right.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Hard
Learning Objective: 1
16-7
8. Chapter 16 - Financial Management and Securities Markets
Essay Questions
23. (p. 491-492) Why would a firm want to invest its idle cash?
Cash ties up business funds just as investments in inventory or plants and equipment do.
Unused or idle cash earns no money so financial managers try to minimize the amount of cash
kept on hand to pay bills. Most businesses invest any cash not needed for such transactions in
marketable securities or use it to reduce debt.
AACSB: Reflective Thinking
Bloom's Taxonomy: Comprehension
Difficulty: Medium
Learning Objective: 1
True / False Questions
24. (p. 494) Trade credit is the most widely used source of short-term financing.
TRUE
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Easy
Learning Objective: 2
25. (p. 494) Principal is the amount of money a business pays to use a bank's funds.
FALSE
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Easy
Learning Objective: 2
16-8
9. Chapter 16 - Financial Management and Securities Markets
26. (p. 494) Lenders first evaluate a borrower's history of borrowing and repaying loans by
looking at the borrower's past credit history.
TRUE
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Easy
Learning Objective: 2
27. (p. 494) Unsecured loans are backed by collateral that the lender can claim if the borrower
does not repay the loan.
FALSE
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 2
28. (p. 494) Interest is a percentage of the principal that the bank charges for use of its money.
TRUE
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Easy
Learning Objective: 2
Multiple Choice Questions
16-9
10. Chapter 16 - Financial Management and Securities Markets
29. (p. 494) Dan bought three new trucks with money borrowed from the First National Bank. If
he fails to repay the loan, the bank will repossess the trucks. The trucks are
A. bought with an unsecured loan.
B. bought with a line of credit.
C. collateral.
D. interest.
E. principal.
AACSB: Reflective Thinking
Bloom's Taxonomy: Comprehension
Difficulty: Medium
Learning Objective: 2
30. (p. 493) If a boat manufacturer orders 50 units of fiberglass material and promises to pay the
supplier at a later date, the manufacturer will record the amount to be paid as a(n)
A. account receivable.
B. current asset.
C. long-term liability.
D. account payable.
E. equity account.
AACSB: Reflective Thinking
Bloom's Taxonomy: Comprehension
Difficulty: Hard
Learning Objective: 2
31. (p. 494) The most widely used source of short-term financing is
A. trade credit.
B. bank loans.
C. commercial paper.
D. mothers and fathers.
E. finance companies.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 2
16-10
11. Chapter 16 - Financial Management and Securities Markets
32. (p. 494) Sherry arranged for her business to borrow up to $10,000 whenever it was needed by
writing a check on its account with the First National Bank. This is a(n)
A. secured loan.
B. line of credit.
C. collateral loan.
D. commercial paper.
E. unsecured loan.
AACSB: Reflective Thinking
Bloom's Taxonomy: Comprehension
Difficulty: Medium
Learning Objective: 2
33. (p. 494) If a real estate developer borrows $100,000 from a bank and ends up paying back
$120,000, the $100,000 represents the
A. collateral.
B. interest.
C. down payment.
D. principal.
E. security.
AACSB: Reflective Thinking
Bloom's Taxonomy: Comprehension
Difficulty: Easy
Learning Objective: 2
34. (p. 494) If Linda Wilson borrows $20,000 to buy a car and ends up paying the lender a total
of $24,000, the $4,000 difference represents the
A. principal.
B. collateral.
C. security.
D. discount.
E. interest.
AACSB: Reflective Thinking
Bloom's Taxonomy: Comprehension
Difficulty: Easy
Learning Objective: 2
16-11
12. Chapter 16 - Financial Management and Securities Markets
35. (p. 494) If the interest rate on a loan changes according to the daily average of the prime rate
over the life of the loan, the interest rate is said to be
A. floating.
B. non-variable.
C. fixed.
D. sporadic.
E. flexible.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Hard
Learning Objective: 2
36. (p. 495) A finance company to whom businesses sell their accounts receivable, usually for a
percentage of the total face value, is known as a(n)
A. factor.
B. secured lender.
C. trade creditor.
D. line creditor.
E. trade lender.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Easy
Learning Objective: 2
Essay Questions
37. (p. 495) Are banks the only sources of short-term funds for businesses?
No. In fact, virtually all financial institutions, including insurance companies, pension funds,
money market funds, and finance companies make short-term loans to organizations. Large
U.S. companies also engage in borrowing from the Eurodollar and commercial paper markets.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Hard
Learning Objective: 2
16-12
13. Chapter 16 - Financial Management and Securities Markets
True / False Questions
38. (p. 495) Most business failures are the result of poor long-term financial planning.
FALSE
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Hard
Learning Objective: 3
39. (p. 495) Short-term financing is often required for long-term assets.
FALSE
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Hard
Learning Objective: 3
40. (p. 495) Fixed assets, such as production facilities, are expected to last for many years.
TRUE
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Easy
Learning Objective: 3
41. (p. 495) Businesses must reinvest in new equipment to stay competitive.
TRUE
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 3
16-13
14. Chapter 16 - Financial Management and Securities Markets
42. (p. 496) Capital budgeting is the process of analyzing business needs and the selection of
assets that will maximize the value of the business.
TRUE
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Easy
Learning Objective: 3
Multiple Choice Questions
43. (p. 495) Plants, offices, and equipment are considered
A. long-term assets.
B. short-term assets.
C. relatively inexpensive items.
D. liabilities.
E. factors.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Easy
Learning Objective: 3
44. (p. 495) The financial arrangements required for investment in fixed assets can be
A. quite easily arranged.
B. challenging for even the most profitable organization.
C. trivial.
D. short-term.
E. inexpensive.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 3
16-14
15. Chapter 16 - Financial Management and Securities Markets
45. (p. 495) Of the following, which would not be a fixed asset for the Tops Manufacturing
Company?
A. A 10,000-square-foot factory
B. Plastic extruding equipment with a 15-year lifespan
C. $10,000 in T-bills
D. Molds for plastic with lifespan of five years
E. Furniture
AACSB: Reflective Thinking
Bloom's Taxonomy: Comprehension
Difficulty: Hard
Learning Objective: 3
46. (p. 495) Long-term assets are also called which type of asset?
A. Current
B. Lengthy
C. Comprehensive
D. Fixed
E. Relevant
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 3
47. (p. 495) Long-term assets are
A. easily made liquid.
B. convertible to cash in less than six months.
C. expected to last for many years.
D. liabilities.
E. dividends.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 3
16-15
16. Chapter 16 - Financial Management and Securities Markets
48. (p. 495) Unless fixed assets are improved and modernized,
A. businesses lose their competitive edge.
B. companies must pay back earnings.
C. equity increases.
D. retained earnings grow.
E. labor costs increase.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Hard
Learning Objective: 3
49. (p. 495) Purchasing new technologically improved equipment
A. is usually too costly.
B. is necessary to a firm's continued productivity.
C. increases labor costs.
D. creates problems with OSHA.
E. reduces retained earnings.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 3
50. (p. 496) The amount of money budgeted for the purchase of long-term assets is called the
A. master budget.
B. year's budget.
C. current budget.
D. fixed budget.
E. capital budget.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 3
16-16
17. Chapter 16 - Financial Management and Securities Markets
51. (p. 496) When a company invests a lot of money in a particular project, it is concerned about
the amount of risk involved. In general, the longer the expected life of a project or asset, the
potential risk is
A. lesser.
B. constant.
C. greater.
D. unchanged.
E. nonexistent.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Hard
Learning Objective: 3
52. (p. 496) Which of the following is the most risky?
A. Adding to a product line
B. Introducing a new product in a foreign market
C. Introducing a new product in a familiar market
D. Buying new equipment for an established market
E. All of the above carry the same risk.
AACSB: Reflective Thinking
Bloom's Taxonomy: Comprehension
Difficulty: Medium
Learning Objective: 3
Essay Questions
16-17
18. Chapter 16 - Financial Management and Securities Markets
53. (p. 496-497) Explain the risk factors a firm must assess when considering an investment in a
new asset.
When considering the risk associated with a prospective asset or project, financial managers
must consider several things. If the investment is foreign, risk assessments must include the
political climate and economic stability of the region. Time is another factor to assess when
considering a new asset. The longer an asset is expected to last, the greater is its potential risk.
Other factors are the stability and competitive nature of the marketplace.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Hard
Learning Objective: 3
True / False Questions
54. (p. 499) Liabilities may take many different forms, some of which are not considered debt.
FALSE
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Easy
Learning Objective: 4
55. (p. 499) A bond can be transferred from one owner to another.
TRUE
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 4
56. (p. 499) A bond contract is also known as an indenture.
TRUE
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Hard
Learning Objective: 4
16-18
19. Chapter 16 - Financial Management and Securities Markets
57. (p. 500) The par value is the interest rate on a bond.
FALSE
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Hard
Learning Objective: 4
58. (p. 499) Bonds can be issued not only by corporations but also by governments and nonprofit
organizations.
TRUE
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Hard
Learning Objective: 4
Multiple Choice Questions
59. (p. 499) Which of the following is an example of a long-term liability?
A. Stock
B. Bond
C. Revenue
D. Discount
E. Equity
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 4
16-19
20. Chapter 16 - Financial Management and Securities Markets
60. (p. 499-500) A method of long-term financing that requires repaying funds with interest is
A. issuing bonds.
B. using retained earnings.
C. issuing stocks.
D. buying insurance.
E. all of the above.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Hard
Learning Objective: 4
61. (p. 499) Long-term liabilities are
A. debts that are due in less than six months.
B. debts that will be repaid over a number of years.
C. assets.
D. equity.
E. retained earnings.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Easy
Learning Objective: 4
62. (p. 499) Items such as a bond's value, date, and rate are specified in the
A. indenture.
B. prospectus.
C. equity preface.
D. ledger.
E. T-account.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 4
16-20
21. Chapter 16 - Financial Management and Securities Markets
63. (p. 500) A bond
A. must be repaid according to the terms set in its indenture.
B. may be defaulted without penalty.
C. is the same as a stock.
D. is a fixed asset.
E. is a current liability.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 4
64. (p. 498) What is the sign of a successful capital budgeting program?
A. lower than normal costs and decreasing stock price
B. higher than normal profits and increasing sales
C. higher employee satisfaction
D. decreased production times
E. increased customer satisfaction
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Hard
Learning Objective: 4
65. (p. 500) Which of the following is a sequence of small bond issues of progressively longer
maturity?
A. Secured bonds
B. Serial bonds
C. Progressive bonds
D. Junk bonds
E. Sequence bonds
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 4
Essay Questions
16-21
22. Chapter 16 - Financial Management and Securities Markets
66. (p. 499-501) Other than bank loans and short-term loans, discuss how firms raise long-term
capital using liabilities.
Many corporations can raise capital by issuing bonds, which are long-term debt securities that
a company sells to raise long-term funds. A bond represents a loan from the purchaser to the
issuer of the bonds, and it must be repaid with interest by the date specified.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Hard
Learning Objective: 4
True / False Questions
67. (p. 502) The market value of common stock is the price at which it is currently trading.
TRUE
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Easy
Learning Objective: 5
68. (p. 502) The par value is the dollar amount printed on a stock certificate.
TRUE
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 5
69. (p. 502) Retained earnings may be used to finance long-term assets.
TRUE
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Easy
Learning Objective: 5
16-22
23. Chapter 16 - Financial Management and Securities Markets
70. (p. 502) Common stock is a safer investment than preferred.
FALSE
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 5
71. (p. 503) An investment banker sells securities for corporations.
TRUE
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Easy
Learning Objective: 5
Multiple Choice Questions
72. (p. 502) The last in line for the payment of profits are the
A. bondholders.
B. common stockholders.
C. preferred stockholders.
D. government.
E. customers.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Hard
Learning Objective: 5
16-23
24. Chapter 16 - Financial Management and Securities Markets
73. (p. 502) Stockholders who may receive dividends but cannot vote are called
A. common stockholders.
B. uncommon stockholders.
C. standard stockholders.
D. majority stockholders.
E. preferred stockholders.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Hard
Learning Objective: 5
74. (p. 502) When a stock quote includes the stock symbol followed by the letters "pf," it
indicates
A. price fixing.
B. pretty farfetched.
C. common stock.
D. preferred stock.
E. poorly financed.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Hard
Learning Objective: 5
75. (p. 502) The 52-week high and low are the highest and lowest prices, respectively, paid for a
stock in the last
A. month.
B. year.
C. decade.
D. week.
E. earnings period.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Easy
Learning Objective: 5
16-24
25. Chapter 16 - Financial Management and Securities Markets
76. (p. 502) The only long-term funds that a company can generate internally are
A. dividend yields.
B. unretained earnings.
C. retained earnings.
D. payout earnings.
E. earnings paid out.
AACSB: Reflective Thinking
Bloom's Taxonomy: Comprehension
Difficulty: Hard
Learning Objective: 5
77. (p. 503) If a company retains all of its earnings, then it will not pay
A. dividends.
B. taxes.
C. expenses.
D. bills.
E. suppliers.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 5
78. (p. 503) Corporations usually employ an investment banking firm to help sell their securities
in
A. the primary market.
B. secondary markets.
C. tertiary markets.
D. singular markets.
E. multiple markets.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Hard
Learning Objective: 5
Essay Questions
16-25
26. Chapter 16 - Financial Management and Securities Markets
79. (p. 502) Explain the difference between common and preferred stock.
Preferred stock is corporate ownership that grants the owner preference in the distribution of
the company's profits but not the voting rights given to common stockholders. Preferred
stockholders receive dividends before common stockholders and are given preference over
common stockholders in the liquidation process. Consequently, preferred stock is a safer
investment than common stock.
AACSB: Reflective Thinking
Bloom's Taxonomy: Comprehension
Difficulty: Hard
Learning Objective: 5
True / False Questions
80. (p. 504-505) Securities markets provide liquidity.
TRUE
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Hard
Learning Objective: 6
81. (p. 505) Secondary markets exist for the trading of publicly owned securities.
TRUE
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Hard
Learning Objective: 6
82. (p. 505) On organized exchanges, investors buy and sell only for their own accounts.
FALSE
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Hard
Learning Objective: 6
16-26
27. Chapter 16 - Financial Management and Securities Markets
83. (p. 505-506) The over-the-counter markets do not have a central location for trading.
TRUE
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 6
Multiple Choice Questions
84. (p. 504) Securities markets provide
A. a mechanism for buying and selling stocks and bonds.
B. the primary market where firms raise capital.
C. a secondary market.
D. liquidity.
E. all of the above.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 6
85. (p. 505) Once a corporation's stock is publicly owned, owners can trade it in
A. the singular market.
B. tertiary markets.
C. multiple markets.
D. secondary markets.
E. the primary market.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Hard
Learning Objective: 6
16-27
28. Chapter 16 - Financial Management and Securities Markets
86. (p. 505) The two biggest stock markets in the United States are
A. American Stock Exchange and New York Stock Exchange.
B. Chicago Stock Exchange and NASDAQ.
C. New York Stock Exchange and NASDAQ.
D. Southeast Regional Stock Exchange and New York Stock Exchange.
E. Tokyo Stock Exchange and NASDAQ.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 6
87. (p. 507) Which of the following compares current stock prices with those in a specified base
period?
A. Average
B. Index
C. Dow Jones Industrial Average
D. Dividend yield
E. Current yield
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 6
88. (p. 506) The over-the-counter market
A. trades most corporate bonds and all U.S. government securities.
B. is only for small companies just getting started.
C. isn't as current in its quotes as the NYSE.
D. is located in Philadelphia.
E. is located in Chicago.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 6
16-28
29. Chapter 16 - Financial Management and Securities Markets
89. (p. 508) Which of the following is a sluggish, retreating market with declining stock prices?
A. Lion market
B. Deer market
C. Bull market
D. Bear market
E. Horse market
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Easy
Learning Objective: 6
Essay Questions
90. (p. 505-506) Explain how the over-the-counter markets differ from other exchanges.
The over-the-counter market is a network of dealers all over the country linked by computers,
telephones, and teletype machines. Unlike the other exchanges, it does not have a central
location. Also, the dealers own the securities they trade, and they buy and sell their own
inventories of securities. So, the dealers must balance their supply of securities by changing
the prices they charge to buy and sell.
AACSB: Reflective Thinking
Bloom's Taxonomy: Comprehension
Difficulty: Medium
Learning Objective: 6
16-29
30. Chapter 16 - Financial Management and Securities Markets
91. (p. 513) Normally, rapidly increasing sales is a good thing. What seems to be the problem
here?
A rule of thumb in finance is to always match short- and long-run investments with short- and
long-term financing, respectively. Organizations experiencing a temporary surge in sales may
use short-term loans to finance the increased sales (added costs from overtime, extra raw
materials, and so forth). However, short-term funds come at a premium, which is why they
should be used only for short-run investments (such as a temporary increase in sales). If sales
are expected to increase from year to year (and assuming the firm is already operating at or
near capacity), operation expansion is the best alternative—a long-run investment that is best
financed through long-term loans. The main problem with Glasspray is that each year it
finances the increased sales with short-term financing (excessive current liabilities). Over
time, this method of capitalizing the organization has produced an undesirable capital
structure—excessive current liabilities relative to current assets.
AACSB: Reflective Thinking
Bloom's Taxonomy: Analysis
Difficulty: Hard
Learning Objective: 7
92. (p. 513) List the important components of a firm's working capital. Include both current
assets and current liabilities.
The current assets associated with working capital include cash, investments, accounts
receivable, and inventory. The current liabilities associated with working capital include
accounts payable, accrued salaries, accrued taxes, and short-term bank loans.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 7
16-30
31. Chapter 16 - Financial Management and Securities Markets
93. (p. 513) What are some management techniques applied to current liabilities that Glasspray
might use to improve its working capital position?
Students' answers may vary, but each should get at reducing current liabilities. For example,
Glasspray could begin by replacing some of the short-term debt with long-term financing or
equity (the debt used to finance the increased sales), and it could take advantage of any trade
credit its suppliers offer.
AACSB: Reflective Thinking
Bloom's Taxonomy: Knowledge
Difficulty: Medium
Learning Objective: 7
16-31