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Pontificia Universidad Católica de Puerto Rico
Recinto de Mayagüez
Colegio de Administración de Empresas

Name:____________________________ Date:________________________
Student #: ________________________ Course: FINA 315 Sec.: _________

Partial Exam # 1(Chapter 1 & 2)
I. Select the correct answer:

1) The part of finance concerned with design and delivery of advice and financial products to individuals, business, and government is called
A) Managerial Finance.
B) Financial Manager.
C) Financial Services.
D) none of the above.

2) Managerial finance
A) involves tasks such as budgeting, financial forecasting, cash management, and funds procurement.
B) involves the design and delivery of advice and financial products.
C) recognizes
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B) earnings per share.
C) cash flows available to stockholders.
D) risk.

22) The key variables in the owner wealth maximization process are
A) earnings per share and risk.
B) cash flows and risk.
C) earnings per share and share price.
D) profits and risk.
23) Cash flow and risk are the key determinants in share price. Increased cash flow results in ________, other things remaining the same.
A) a lower share price
B) a higher share price
C) an unchanged share price
D) an undetermined share price

24) Financial managers evaluating decision alternatives or potential actions must consider
A) only risk.
B) only return.
C) both risk and return.
D) risk, return, and the impact on share price.

25) An ethics program is expected to have a ________ impact on the firm's share price.
A) positive
B) negative
C) no impact
D) undetermined

26) Higher cash flow and greater risk
A) have no effect on share price.
B) have an inverse effect on share price.
C) adversely affect share price.
D) have the same effect on share price.

27) As the risk of a stock investment increases, investors'
A) return will increase.
B) return will decrease.
C) required rate of return will decrease.
D) required rate of return will increase.

28) All of the following as considered stakeholders EXCEPT
A) consumers.
B) suppliers.
C) employees.
D) competitors.

29) A financial manager must choose between four alternative Assets: 1, 2, 3, and 4. Each asset costs

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