Finance 522 Midterm Study Guide Module 1:

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Finance 522 Midterm Study Guide Module 1: 1. Which of the following best defines finance? 1. A study of fund management and asset allocation over time. 2. Which answer best summarizes how ... the fields of accounting, finance, and economics relate to each other? 1. Accounting is backwards looking, finance projects forward, and economics studies cause and effect. 3. How is finance used in organizations? 1. All of these answers. 4. Which of the following is NOT something a corporation must consider when making an investment decision? 1. Whether you can accurately calculate the guaranteed return on the investment. 5. When a corporation needs to raise money to expand its operations, it can: 1. Borrow from a bank, borrow from the public by issuing bonds, and take money from its retained profits. 6. Which is the following is a way a business can finance a new business opportunity. 1. All of these answers 7. Which of the following is a job function associated with a corporate finance department? 1. All of these answers 8. Which of the following is a responsibility of a financial manager? 1. All of these answers 9. Which of the following does a financial manager NOT need to have to carry out her responsibilities? 1. Knowledge of the what the business's cash flows will be in the future. 10. Which of the following is a reason why a person would study finance? 1. All of these answers 11. Which of the following is NOT a true statement regarding the valuation process? 1. Valuation is a forward-looking process, so historical data is unimportant. 12. Which of the following statements regarding shareholder and market value is correct? 1. The idea of maximizing market value is related to the idea of maximizing shareholder value. 13. Which of the following is a stakeholder in a company? 1. All of these 14. Each of the following is an argument for considering the interests of a broad group of stakeholders when making corporate decisions EXCEPT: 1. Since stakeholders are direct owners of the company, their interests should be protected. 15. Which of the following occurred during the financial crisis of 2007-2008? 1. All of these answers 16. Which of the following is NOT a correct definition of growing area of the finance sector? 1. Impact investing is choosing investments based on its impact on a sector of the market. 17. Which of the following jobs require a background in finance? 1. All of these answers. 18. What are the three central components of business ethics? 1. Personal, professional and corporate. 19. Which of the four central moral reasoning components refers to the way in which persistence, despite fatigue or the temptation of a simpler or easier path, reflects morality? 1. Moral character 20. Moral is best defined as an individual's ability to achieve 'proportionality' relative to understanding the perspective or viewpoints of others. 1. Imagination 21. Cultural relativism, or the concept that there are different sets of norms, values and ethics on the global level, is the antithesis of . 1. Universalism 22. According to Shivam Sherman, which age group generally falls into the socialization period? 1. 13-21 23. Large corporations often have the stigma of focusing on instead of . 1. profits; people 24. Robert Prentice hypothesizes that can strongly influence ethical decision making. 1. Self-image 25. Which of the following should you consider when choosing an organizational structure for a business? 1. All of these answers. 26. Which of the following is NOT a characteristic of a sole proprietorship? 1. The owner must file a separate tax return for the business. Which of the following is an accurate characteristic of a sole proprietorship? * The owner is personally liable for the business's debt and obligations. 27. Which of the following is a legal characteristic of a general partnership? 1. There must be at least two business owners. 28. Which of the following is a characteristic of a corporation? 1. All of these answers 29. Which of the following terms describes the protection of personal assets stemming from the corporate structure? 1. Limited Liability 30. At what level is income taxed in the S corporation? 1. Shareholde [Show More]

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