Test for current control 1

What term describes the importance or influence of something in relation to society and the economy?

• Socioeconomic significance
• Social impact
• Economic value
• Social responsibility

What are the four major types of financial decisions that finance functions involve?

• Investment, liquidity, financial, and dividend decisions
• Budgeting, forecasting, reporting, and auditing decisions
• Saving, investing, borrowing, and lending decisions
• Income, expenditure, asset, and liability decisions

What is the form of applied economics that uses quantitative data, statistics, and economic theory to optimize the goals of a corporation or other business entity?

• Business finance
• Financial management
• Financial accounting
• Financial economics

What is the term that describes the optimal mix of debt and equity that minimizes the cost of capital and maximizes the value of the firm?

• Capital structure
• Capital budgeting
• Capital rationing
• Capital adequacy

What kind of decisions involves deciding how much of the earnings should be retained in the business and how much should be distributed to the shareholders?

• Dividend decision
• Financing decision
• Investment decision
• Liquidity decision

What are the four essential topics in modern finance that are covered in the “Fundamentals of Finance” course?

• Financial statement analysis, time value of money, risk and return, and capital budgeting
• Investment decision, financing decision, dividend decision, and liquidity decision
• Financial markets and institutions, interest rates and bond valuation, stock valuation, and capital structure
• Financial planning and forecasting, working capital management, options and derivatives, and international finance

What is the term for the amount of money received from an investment, such as dividends or interest payments?

• Income
• Capital gain or loss
• Expenses
• Costs

What is the principle of business ethics that incorporates other principles such as honesty, trustworthiness, and reliability?

• Integrity
• Accountability
• Leadership
• Responsibility

In which of the following answers is the definition of the term “finance” given?

• Finance is a system of monetary relations that has an imperative form and is associated with the formation, distribution and use of monetary funds
• Finance is a set of legal relations arising in real money turnover regarding the formation, distribution and use of centralized funds of financial resources
• Finance is a barter relationship between individuals and legal entities
• Finance is a social relationship between individual groups of citizens

What is the goal of the financial manager?

• To maximize the value of the firm
• To minimize the cost of capital
• To maximize the profit margin
• To minimize the risk exposure