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Multiple Choice
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1

Which of the following are microeconomic variables that help define and explain the discipline of finance?
A)risk and return
B)capital structure
C)inflation
D)all of the above
2

One primary macroeconomic variable that helps define and explain the discipline of finance?
A)capital structure
B)inflation
C)technology
D)risk
3

The money markets deal with _________.
A)securities with a life of more than one year
B)short-term securities
C)securities such as common stock
D)none of the above
4

The ability of a firm to convert an asset to cash is called ____________.
A)liquidity
B)solvency
C)return
D)marketability
5

Early in the history of finance, an important issue was:
A)liquidity
B)technology
C)capital structure
D)financing options
6

The ___________________ is the most common form of business organization in the U.S.
A)corporation
B)partnership
C)sole proprietorship
D)none of the above
7

The ____________________ has more sales in dollars than any other form of business organization.
A)sole proprietorship
B)partnership
C)corporation
D)none of the above
8

One major disadvantage of the sole proprietorship is ________________.
A)simplicity of decision-making
B)unlimited liability
C)low operational costs
D)none of the above
9

The appropriate firm goal in a capitalist society is ________________.
A)profit maximization
B)shareholder wealth maximization
C)social responsibility
D)none of the above
10

The agency problem will occur in a business firm if the goals of ____________ and shareholders do not agree.
A)investors
B)the public
C)management
D)none of the above





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