| 1 CORRECT | | Generally, a corporation is owned by its: | | | A) | Managers | | | B) | Board of Directors | | | C) | Shareholders | | | D) | All of the above | | | | 2 CORRECT | | Limited liability is an important feature of: | | | A) | Sole proprietorships | | | B) | Partnerships | | | C) | Corporations | | | D) | All of the above | | | | 3 CORRECT | | Financial markets serve which of the following functions? | | | A) | Provide liquidity for investors | | | B) | Allow investors to adjust risk exposure | | | C) | Allow firms to manage risk | | | D) | All of the above | | | | 4 CORRECT | | A firm's investment decision is also called the: | | | A) | Financing decision | | | B) | Capital budgeting decision | | | C) | Liquidity decision | | | D) | None of the above | | | | 5 CORRECT | | The treasurer usually oversees the following functions of a corporation except: | | | A) | Preparation of financial statements | | | B) | Investor relationships | | | C) | Cash management | | | D) | Obtaining finances | | | | 6 CORRECT | | The treasurer is usually responsible for the following functions of a corporation except: | | | A) | Raising new capital | | | B) | Cash management | | | C) | Banking relationships | | | D) | Internal accounting | | | | 7 CORRECT | | The following are advantages of separation of ownership and management of corporations except: | | | A) | Corporations can exist forever. | | | B) | Facilitate transfer of ownership without affecting the operations of the firm. | | | C) | Hire professional managers | | | D) | Incur agency costs | | | | 8 CORRECT | | The financial goal of a corporation is to: | | | A) | Maximize sales | | | B) | Maximize profits | |