MGT 448
FINAL EXAM
Name:

Place a mark next to the correct answer. Please be careful to answer all 20 questions. 1. The rapid globalization of capital markets enables individuals and institutions based in one nation to invest in corporations based elsewhere with relative ease. a. True (X – Correct Answer) b. False 2. Systematic risk refers to movements in a stock portfolio’s value that are attributable to macroeconomic forces affecting all firms in an economy, rather than factors specific to an individual firm. c. True (X – Correct Answer) d. False 3. Market makers are: e. Financial service companies that connect investors and borrowers. (X – Correct Answer) f. Those who want to borrow money including individuals, companies and governments. g. Nonbank financial institutions who want to invest money. h. High net worth individuals with surplus cash to invest. 4. An equity loan i. Is a share of stock that does not give the holder a claim to a firm’s profit stream. j. Is made when a corporation sells stock to investors. (X – Correct Answer) k. Includes cash loans from banks and funds raised from the sale of corporate bonds. l. Requires the corporation to repay a predetermined portion of the loan amount at regular intervals regardless of how much profit it is making.

5. A company’s political economy and culture are independent of each other. m. True n. False (X – Correct Answer) 6. In a market economy if demand for a product exceeds supply, prices will rise, signaling to producers to produce more. o. True (X – Correct Answer) p. False 7. The activity that controls the transmission of physical materials through the value chain, from procurement through production and into distribution is known as logistics. q. True