Business Capital & Investments: Help & Review Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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Question 1 1. Kevin is an investment banker who wants to wine and dine with prospective clients. He may not have all of the cash he requires to pay. Why should he use a credit card?

Question 2 2. Which of the following is usually an attribute of common stock?

Question 3 3. How can an investor become educated about the potential stock investment they are going to make?

Question 4 4. How does common stock differ from preferred stock?

Question 5 5. The time value of money teaches us that

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Question 6 6. What type of financing involves investors becoming creditors?

Question 7 7. Why might a company choose to sell preferred stock versus common stock?

Question 8 8. Samantha just celebrated her first holy communion. Her parents opened a savings account (that earns 3% interest) for her to deposit the money that was gifted to her on this special occasion. Samantha deposits the $400 from her party. What will that amount will be worth in exactly 1 year from now?

Question 9 9. Tom works in accounting, and he has to prepare a budget that will take into account all of the activities of the company. There will be a strong investment from the acquisitions department that will impact their budget but is worth less than 2% of the company's value. Should Tom wait for a new report from the acquisition's department?

Question 10 10. Why might a business be afraid of issuing common stock?

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Question 11 11. Why might some people see preferred stock as being the BEST option?

Question 12 12. Which of the following is the best explanation of short-term financing?

Question 13 13. Why are government grants considered the cheapest form of long-term financing?

Question 14 14. How is a secured loan different from an unsecured loan?

Question 15 15. What federal government agency regulates securities such as stocks?

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Question 16 16. Why is financial feasibility an important step in financial planning?

Question 17 17. Corporations often allocate all or part of their profits to shareholders. This is called _____.

Question 18 18. Which type of credit involves the bank allowing a borrower to borrow money on an as needed basis up to a preset maximum?

Question 19 19. After allocating the resources, a company CEO is trying to control and monitor the acquisition, allocation and utilization of the financial resources. Should the CEO even perform financial control?

Question 20 20. Which of the following BEST defines long-term financing?

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Question 21 21. Tom is saving for a down payment on a new automobile. If he wants his savings account (which is earning a 5% interest rate) to be worth $5,000 in 3 years, how much money will he need to invest today?

Question 22 22. John is the owner of a small IT company. In exchange for a financial investment, he gave his friend Katerina 10% of the company. This is an example of what type of financing?

Question 23 23. Why might a business choose trade credit over other forms of short-term financing?

Question 24 24. Which of the following is NOT a feature of a stock offered to raise equity capital?

Question 25 25. Christy is buying stock. Why might she want preferred stock over common stock?

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Question 26 26. When a corporation files for bankruptcy, which party has the first right to the corporation's assets?

Question 27 27. Financial planning can best be defined as a process for making sure that _____.

Question 28 28. How can a corporation raise equity capital?

Question 29 29. Which of the following statements correctly describes the relationship between existing bond prices and market interest rates?

Question 30 30. How are raising money through equity and through debt similar for a business?

Business Capital & Investments: Help & Review Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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