QUESTION What is a budget? A) a complete statement of financial management B) a financial plan covering stock options C) a financial plan showing estimated revenues and expenses D) a plan for implementing financial controls E) an estimate of the cash flow for a period of time ANSWER Answer: C Explanation: C) One part […]
QUESTION Because of FDIC insurance, a depositor’s $1,000,000 would be safe if he or she were to have it evenly deposited among four banks. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: Because the SAIF, via the SDIC, insures up to $250,000 per depositor per bank, $1,000,000 divided up evenly […]
QUESTION Beginning in the 1980s and 1990s, as memories of the Great Depression faded, massive deregulation of our financial systems took place. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: Beginning in the 1980s and 1990s, as memories of the Great Depression faded, massive deregulation of our financial systems took […]
QUESTION When a company sells stock to the general public for the first time, it is called an initial public offering. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: Initial public offering is the name given to a company’s first-time sale of its stock to the general public.
QUESTION With deregulation, the willingness of financial institutions and individuals to take on risk decreased. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: With deregulation came the trend of financial institutions and individuals taking on great risk.
QUESTION One of the Fed’s roles is to clear checks between different banks. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: It is the role of the Fed to clear checks between different banks.
QUESTION Which of the following is one of the three parts of a financial plan? A) taxation B) spending C) saving D) forecasting E) financial leverage ANSWER Answer: D Explanation: D) A financial plan has three parts: forecasting, budgeting, and financial controls.
QUESTION Selling stock means selling ownership shares in a firm. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: To sell stock is to sell ownership shares in a firm.
QUESTION Subprime loans are loans for people with blemished or limited credit histories, which carry a higher rate of interest than prime loans to compensate for increased credit risk. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: Subprime loans are loans for people with blemished or limited credit histories, which […]
QUESTION Short-term financing is typically needed when a company decides to make a major investment. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Short-term financing can help a company meet current operating needs, but long-term financing is typically needed when a company decides to make a major investment, such as […]
