Financial Management

A legal entity created by a state, separate and distinct from its owners and managers, having unlimited life, easy transferability of ownership, and limited liability known as:

• Corporation

• Partnership

• Proprietorship

• Limited Liability Company (LLC)

The situation in which the actual market price equals the intrinsic value, so investors are indifferent between buying and selling a stock known as:

• Undervalued

• Overvalued

• Equilibrium

Expenses arising from conflicts of interest between shareholders and management are known as:

• Agency Problem

• Agency Costs

• Agency Conflict

The financial markets in which funds are borrowed or loaned for short periods (less than one year) are known as:

• Futures Markets

• Money Markets

• Capital Markets

• Spot Markets

Markets in which security ties and other financial assets are traded among investors after they have been issued by corporations known as:

• Primary Markets

• Secondary Markets

A statement of a firm's financial position at a specific point in time is referred to as:

• balance sheet

• income statement

• statement of cash flows

• statement of stockholders’ equity

An increase in debt will result in:

• a decrease in assets

• a decrease in liabilities

• a decrease in equity

Negative net working capital (NWC) occurs if:

• current liabilities are greater than its current assets

• current assets are greater than its current liabilities

• current liabilities are equal to it's current assets