Chapter 1: Introduction to Financial Management

Functions of managerial finance are

• Planning for investments

• Raising of funds

• Working capital decisions

• All the above

The primary goal of financial manager is

• to maximise return

• to minimize risk

• to maximize the shareholder's wealth

• to maximize the stakeholder's wealth

_____ is wealth in the form of money or other assets owned by a person or organization, available for a particular purpose such as starting a company or investing.

• Consumer

• Seller

• Capital

• Demand

____ represent the cost that shareholders bear due to managers’ pursuit of their own interests

• Shareholder

• Stakeholder

• Expenses

• Agency problem

What practices can be done to reduce agency cost?

• Giving investment

• Paying salary

• Corporate governance

• Dividend

Which of the following refers to corporation

• Tax paid by individual owners

• Decision making will be done by the board of directors

• More than one person enter the business

• Unlimited liability

_____ are intermediaries that channel the saving of individuals, businesses, and governments into loans or investments.

• Financial institutions

• Kuala Lumpur Stock Exchange

• Money markets

• Financial markets

The following are types of financial institutions in Malaysia, except ____

• Commercial banks

• Investment banks

• Capital Market

• Shadow banking systems

What is the differences of money market and capital market?

• no differences

• types of funds

• one is short-term and the other is long-term.

• both are suppliers of funds

Key principles that financial managers use when making business decisions include

• time value of money

• tradeoff between return and risk

• cash

• all of the above