Lesson 1-3: Introduction to Financial Management (QUIZ)

Question 1

T/F: High cash flow is generally associated with a higher share price whereas
higher risk tends to result in a lower share price.

Answer 1

True

i think its a life insurance company

Question 2

T/F: The wealth of corporate owners has measured by the share price of the
stock.

Answer 2

true

Question 3

T/F: When considering each financial decision alternative or possible action in
terms of its impact on the share price of the firm’s stock, financial
managers should accept only those actions that expected to maximize
shareholder value.

Answer 3

True

Question 4

T/F: Financial markets are intermediaries that channel the savings of
individuals, businesses, and government into loans or investments.

Answer 4

FALSE

its financial institutions

Question 4

T/F: Stockholders expect to earn higher rates of return on investments of lower
risk and lower rates of return on investments of higher risk.

Answer 4

FALSE

higher ROI=high-risk investments and low ROI=low-risk investments

Question 5

T/F: Commercial banks obtain most of their funds from borrowing in the
capital markets.

Answer 5

FALSE

they gain funds from deposits from accounts held by ppl and businesses

Question 6

T/F: The money market involves trading of securities with maturities of one
year or less while the capital market involves the buying and selling of
securities with maturities for more than one year.

Answer 6

TRUE

Question 7

T/F: Primary and secondary markets are markets for short-term and long-term
securities, respectively

Answer 7

FALSE

its money and capital markets, respectively

Question 8

T/F: A mutual fund is a type of financial intermediary that obtains funds
through the sale of shares and uses the proceeds to acquire bonds and
stocks issued by various business and governmental units.

Answer 8

TRUE

Question 9

T/F: Credit unions are the largest type of financial intermediary handling
individual savings.

Answer 9

FALSE
Commercial Banks