Chapter 1: The scope of corporate finance

The limited partners in a limited partnership:
1. are taxed as if the partnership was a general partnership.
2. have limited liability.
3. must be involved in the day to day management of the firm.
4. answers a and b are both correct.
An agent of the firm is:
1. any supplier of services to the firm.
2. any manager who owns less than 100% of the firm.
3. any outside entity that supplies a product to the firm.
4. none of the above.
Which career path will lead to serving the needs of a bank's customers?
1. investment banking
2. commercial banking
3. corporate finance
4. investment analysis
Risk management encompasses:
1. the management of acts of nature which the firm may be exposed to.
2. the management of the firms hedgeable financial risks.
3. the management of the firms exposure to foreign currency fluctuations.
4. all of the above.
Which legal form of business organization offers the greatest protection to all of the owners of the firm in the event that the firm has a legal judgement against it?
1. sole proprietorship
2. limited partnership
3. corporation
4. all of the above provide the same protection
Which of the following is the most beneficial form of business that is in the start-up of phase of its business when it anticipates net losses for the next few years?
1. corporation
2. partnership
3. limited partnership
4. answers b and c are both correct
The Sarbanes-Oxley Act of 2002 prevents a publicly traded U.S. corporation's auditors from:
1. providing consulting services.
2. providing advisory services.
3. providing valuation services.
4. all of the above.
Which of the following is what managers should be trying to do for the firm?
1. Maximize revenue.
2. Minimize expenses.
3. Maximize shareholder wealth.
4. Maximize the current period's net income.
Which form of capital is expected to remain permanently invested in the firm?
1. debt capital
2. equity capital
3. human capital
4. political capital
The financial position within a company that is typically responsible for formulating and implementing an integrated financial plan for a company or a division is:
1. the assistant treasurer.
2. the cash manager.
3. the controller.
4. the capital budgeting analyst.

Chapter 1: The scope of corporate finance

Quiz