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 […]
QUESTION What is the name given to the overall business function of obtaining funds for a company and managing them to accomplish the company’s objectives? A) finance B) forecasting C) budgeting D) asset collection E) capital expenditure ANSWER Answer: A Explanation: A) Finance is the business function of obtaining funds for a company and […]
QUESTION Both government-issued coins and paper money are referred to as currency. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: Government-issued coins and paper money are both referred to as currency.
QUESTION Currency represents roughly 3/4 of all media of exchange in the United States. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Currency represents only about 1/3 of all media of exchange in the United States.