Finance is the study of how individuals, institutions, and businesses acquire, spend, and manage money and other financial resources
True
Financial markets provide the mechanism for allocating financial resources or funds from savers to borrowers
True
The goal of the financial manger in a profit-seeking organization should be to maximize the owners' wealth
True
The secondary securities markets are involved in creating and issuing new securities, mortgages, and other claims to wealth
False
Money markets are the markets where debt securities with maturities of one year or less are issued and traded
True
One of the most significant functions of the monetary system within the financial system is the creation of money, which serves as a medium of exchange
True
Personal finance is the study of how growth- driven performance-focused, early-stage firms raise financial capital and manage operations and assets
False
Personal finance is the study of how individuals prepare for financial emergencies, protect against premature death and property losses, and accumulate wealth
True
An effective financial system is a complex mix of government and policy makers, a monetary system, financial institutions, and financial markets that interact to expedite the flow of financial capital from saving into investment
True
Capital markets are markets where debt securities with maturities of greater than one year and equity securities are issued and traded
True
Money markets are markets where equity securities and debt securities with maturities of greater than one year are traded
False
The six principles of finance include (1) Money has a time value, (2) Higher returns are expected for taking on more risk, (3) Diversification of investments can reduce risk, (4) Financial markets are efficient in pricing securities, (5) Manager and stock
True
The principle of finance that "money has a time value" implies money in hand today is worth less than the promise of receiving the same amount in the future because of a sum of money today could be invested and grow over time
False
The principle of finance that "lower returns are expected for taking on less risk" implies that rational investors would choose a risky investment only if they feel the expected return is high enough to justify the greater risk
True
The principle of finance that "financial markets are efficient in pricing securities" implies that the prices of securities reflect some information available to the public and that when new information becomes available prices change over time to reflect
False
The principle of finance that "management objectives may differ from owner objectives" implies that owner returns may suffer as a result of manager objectives
True
The principle of finance that "management objectives may differ from owner objectives" can be resolved by increasing manager salaries
False
The principle of finance that "reputation matters" implies that for institutions or businesses to be successful, they must have the trust and confidence of their customers, employers, and owners, as well as the community and society within which they oper
True
The principle of finance that "reputation matters" sometimes is harmed by the different objectives of owners and managers
True
While the financial press chooses to highlight examples of unethical behavior, most individuals exhibit sound ethical behavior in their personal and business dealings and practices
True
The U.S Treasury Department is primarily responsible for the amount of money that is created in the U.S ecomony
False
The functions of financial institutions include accumulating savings and lend funds
True
Three financial system components are the U.S Treasury, financial institutions, and financial markets
False
Individuals and businesses hold money for purchases or payments they expect to make in the near future
True
Money markets are where debt securities with maturities of one year or more are issued and traded
False
Derivative securities may be used to speculate on the future price direction of the underlying financial assets or to reduce price risk associated with holding the underlying financial assets
True
Because the relative values of currencies may change, firms cannot use the currency exchange markets to reduce the risk of holding too much of certain currencies
False
Entrepreneurial finance is the study of how individuals prepare for financial emergencies, protect against premature death and property losses, and accumulate wealth
False
Finance is the study of how individuals, institutions, and businesses acquire, spend, and manage money and other financial resources
True
Financial markets provide the mechanism for allocating financial resources or funds from savers to borrowers
True
The goal of the financial manger in a profit-seeking organization should be to maximize the owners' wealth
True
The secondary securities markets are involved in creating and issuing new securities, mortgages, and other claims to wealth
False
Money markets are the markets where debt securities with maturities of one year or less are issued and traded
True
One of the most significant functions of the monetary system within the financial system is the creation of money, which serves as a medium of exchange
True
Personal finance is the study of how growth- driven performance-focused, early-stage firms raise financial capital and manage operations and assets
False
Personal finance is the study of how individuals prepare for financial emergencies, protect against premature death and property losses, and accumulate wealth
True
An effective financial system is a complex mix of government and policy makers, a monetary system, financial institutions, and financial markets that interact to expedite the flow of financial capital from saving into investment
True
Capital markets are markets where debt securities with maturities of greater than one year and equity securities are issued and traded
True
Money markets are markets where equity securities and debt securities with maturities of greater than one year are traded
False
The six principles of finance include (1) Money has a time value, (2) Higher returns are expected for taking on more risk, (3) Diversification of investments can reduce risk, (4) Financial markets are efficient in pricing securities, (5) Manager and stock
True
The principle of finance that "money has a time value" implies money in hand today is worth less than the promise of receiving the same amount in the future because of a sum of money today could be invested and grow over time
False
The principle of finance that "lower returns are expected for taking on less risk" implies that rational investors would choose a risky investment only if they feel the expected return is high enough to justify the greater risk
True
The principle of finance that "financial markets are efficient in pricing securities" implies that the prices of securities reflect some information available to the public and that when new information becomes available prices change over time to reflect
False
The principle of finance that "management objectives may differ from owner objectives" implies that owner returns may suffer as a result of manager objectives
True
The principle of finance that "management objectives may differ from owner objectives" can be resolved by increasing manager salaries
False
The principle of finance that "reputation matters" implies that for institutions or businesses to be successful, they must have the trust and confidence of their customers, employers, and owners, as well as the community and society within which they oper
True
The principle of finance that "reputation matters" sometimes is harmed by the different objectives of owners and managers
True
While the financial press chooses to highlight examples of unethical behavior, most individuals exhibit sound ethical behavior in their personal and business dealings and practices
True
The U.S Treasury Department is primarily responsible for the amount of money that is created in the U.S ecomony
False
The functions of financial institutions include accumulating savings and lend funds
True
Three financial system components are the U.S Treasury, financial institutions, and financial markets
False
Individuals and businesses hold money for purchases or payments they expect to make in the near future
True
Money markets are where debt securities with maturities of one year or more are issued and traded
False
Derivative securities may be used to speculate on the future price direction of the underlying financial assets or to reduce price risk associated with holding the underlying financial assets
True
Because the relative values of currencies may change, firms cannot use the currency exchange markets to reduce the risk of holding too much of certain currencies
False
Entrepreneurial finance is the study of how individuals prepare for financial emergencies, protect against premature death and property losses, and accumulate wealth
False