Sample Question of Fin110 - 1219 Words

Section A (20 Multiple Choice Questions) (50 marks) Select the appropriate response: 1. The primary financial goal of a corporation is to maximize A Shareholder’s wealth B Earnings per share C Stock price D A C 2. Which of the following is not one of the three major areas of finance? A Accounting B Investments and financial markets C Financial management of companies D The banking system 3. A savings-surplus unit is one: A that needs to borrow funds from a surplus unit B whose income exceeds its spending C whose spending exceeds its income D that generally is a company 4. A _______ is a financial intermediary that receives premium†¦show more content†¦Calculate the one-year return on Songket stock A 3.75% B 9.50% C 18.75% D 22.50% 16. If a project’s NPV is negative? A The project earns less than the cost of capital B The investment will not add value or contribute to shareholder wealth C The present value of expected cash outflows is greater than the present value of expected cash inflows D All of the above 17. The cash conversion cycle measures the time A Between the creation of receivables and their collection B It takes for inventory to be turned into product and sold C Between payment for inventory and collection of cash for its subsequent sale as product D For a check to clear the banking system 18. Which of the following is a source of a short-term financing? A Accounts payable B Accruals C Commercial paper D All of the above 19. The followings are among the 5Cs of credit EXCEPT A Character B Cooperation C Capacity D Collateral 20. Bursa Malaysia (Malaysia Stock Exchange) does all this EXCEPT A Be the market where securities that have already been issued are traded between investors. B Provide transferring ownership service to corporate securities C Being monitored by Bank Negara Malaysia and Ministry of Finance D Issue new securities (20 x 2.5m = 50) SECTION B Question 21 (15