True or False Quiz

Please answer all questions.


1	Capital budgeting is the selection of liabilities that will maximize the value of the business.
		A)	True
		B)	False


2	Current assets are those that will be turned into cash in more than a year.
		A)	True
		B)	False


3	Liabilities may take many different forms, but they are all classified as debt.
		A)	True
		B)	False


4	Secured loans are backed by collateral that the lender can claim if the borrower does not repay the loan.
		A)	True
		B)	False


5	Interest is a percentage of the principal that the bank charges for use of its money.
		A)	True
		B)	False


6	Bank loans are the most widely used form of short-term credit.
		A)	True
		B)	False


7	Commercial certificates of deposit must be held until maturity.
		A)	True
		B)	False


8	The difference between a stock's par value and its offering price is called capital in excess of par.
		A)	True
		B)	False


9	The most widely used source of short-term financing is trade credit.
		A)	True
		B)	False


10	The shorter the potential life of a project, the greater the risk.
		A)	True
		B)	False


11	Investment banking is the sale of stocks and bonds for corporations.
		A)	True
		B)	False


12	An organized exchange is a network of dealers all over the coutnry linked by computers but with no central location.
		A)	True
		B)	False


13	Many firms frequently use electronic funds transfers to speed up collections.
		A)	True
		B)	False


14	Working capital management is the management of short-term assets and liabilities.
		A)	True
		B)	False


15	Astute money managers try to keep just enough cash on hand to pay bills.
		A)	True
		B)	False


16	Primary markets exist for the trading of publicly owned securities.
		A)	True
		B)	False


17	Working capital management deals with short-term assets and liabilities.
		A)	True
		B)	False


18	Common stock is a riskier investment than preferred.
		A)	True
		B)	False


19	A bond can never be transferred from one owner to another.
		A)	True
		B)	False


20	Floating-rate bonds are a sequence of small bond issues of progressively longer maturity.
		A)	True
		B)	False

2002 McGraw-Hill Higher Education
Any use is subject to the Terms of Use and Privacy Policy.
McGraw-Hill Higher Education is one of the many fine businesses of The McGraw-Hill Companies.