Questions on Financial and Investment Management

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The ______________ is a term used to describe the financial system, institutions, markets, businesses, individuals, and global interactions that help the economy operate efficientlyAnswer | | financial environment|

| | regulatory environment|
| | international environment|
| | operating environment|
2 points
Question 2
1. An area of finance that involves the sale or marketing of securities, the analysis of securities, and the management of investment risk through portfolio diversification is referred to as: Answer

| | financial management|
| | investments|
| | financial institutions|
| | financial markets|
2 points
Question 3
1. ____________________ provide the record-keeping mechanism for showing ownership of the financial instruments used in the flow of financial funds between savers and borrowers and record revenues, expenses, and profitability of organizations that produce and exchange goods and services. Answer

| | Financial Managers|
| | Accountants|
| | Operations Managers|
| | Statisticians|
2 points
Question 4
1. ____________________ in business involves making decisions relating to the efficient use of financial resources in the production and sale of goods and services. Answer
| | Financial management|
| | Financial economics|
| | Investment management|
| | Asset allocation|
2 points
Question 5
1. ______________ behavior refers to how an individual or organization treats others legally, fairly, and honestly. Answer
| | Principal-agent|
| | Stakeholder|
| | Responsible|
| | Ethical|
2 points
Question 6
1. Rational investors would consider an investment in a risky business venture only if they feel the expected return is high enough to justify the Answer
| | greater risk.|
| | higher cost.|
| | longer useful life.|
| | more complex designs.|
2 points
Question 7
1. ________________ involves making decisions relating to issuing and investing in stocks and bonds. Answer
| | Financial economics|
| | Financial management|
| | Investment management|
| | Asset allocation|
2 points
Question 8
1. The possible conflict between managers and owners is sometimes called the Answer
| | principal-subordinate problem|
| | principal-agent problem|
| | boss-subordinate problem|
| | boss-agent problem|
2 points
Question 9
1. The financial environment:
Answer
| | encompasses the financial markets and global interactions that contribute to an efficiently operating economy.| | | encompasses the financial institutions and financial markets that contribute to an efficiently operating economy.| | | encompasses the financial system, financial institutions, financial markets, business firms, individuals, and global interactions that contribute to an efficiently operating economy.| | | none of the above. |

2 points
Question 10
1. Two risk assets can be combined to lower the overall risk of a portfolio. This principle is commonly referred to as Answer
| | blending|
| | asset allocation|
| | diversification|
| | portfolio segmentation|
2 points
Question 11
1. Which of the following are not depository institutions? Answer
| | The Federal Reserve|
| | credit unions|
| | savings banks|
| | commercial banks|
2 points
Question 12
1. The U.S. bimetallic standard was based on:
Answer
| | gold and platinum|
| | silver and gold|
| | gold and copper|
| | silver and copper|
2 points
Question 13
1. When it is a means of paying for goods and services and discharging debts, money is referred to as a: Answer
| | store of purchasing power|
| | medium of exchange|
| | standard of value|
| | liquid asset|
2 points
Question 14
1. Paper money fully backed by a precious metal and issued by the government is...
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