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MIDTERM EXAM
FINC 330 – Summer 2013
DIRECTIONS: Exam consists of 51 multiple choice questions, worth 2 points each.
Please answer on the answer key and submit in your homework folder by midnight Eastern Time,
1) Which of the following is a reason why an expertise in international finance is important?
A) Because the process of assessing risk among many countries is more difficult than assessing risk for a single country
B) Because financial regulatory rules and requirements differ from country to country
C) Because changes in economic conditions impact the relative values of currency among countries
D) All of the above are reasons for gaining expertise in international finance.
2) Financial assets that will mature within a year are bought and sold in the ________ market.
A) debt
B) capital
C) stock
D) money
3) ________ is the typical title of the corporate executive charged with determining the best repayment structure for borrowed funds to ensure timely repayment and sufficient cash for daily operations.
A) Chief Executive Officer (CEO)
B) Chief Financial Officer (CFO)
C) Chairman
D) Chief Operating Officer (COO)
4) A firm’s stock price most closely reflects which of the following?
A) Current interest rates
B) Expected future cash flows of the firm
C) The amount of debt held by the firm
D) None of the above
5) A ________ has limited liability, is a legal entity, and has the greatest potential to raise capital.
A) sole proprietorship
B) general partnership
C) limited partnership
D) corporation
6) Which of the statements below is FALSE?
A) The purpose of studying financial statements is to understand those portions of the statements that have relevance for financial decision making.
B) We need to understand how to interpret and use the information presented in financial statements to form a picture of the financial profile of the firm.
C) Accounting, it has been said, looks back to where a company has been — somewhat like looking…