Test Bank For Foundations of Financial Management 10th Canadian Edition
Chapter 01 The Goals and Functions of Financial Management
| 1. |
What is the primary goal of financial management?
| C. |
Maximizing shareholder wealth |
| D. |
Minimizing risk of the firm |
|
| 2. |
Proper risk-return management means that:
| A. |
the firm should take as few risks as possible. |
| B. |
consistent with the objectives of the firm, an appropriate trade-off between risk and return should be determined. |
| C. |
the firm should earn the highest return possible. |
| D. |
the firm should value future profits more highly than current profits. |
|
| 3. |
Which of the following is not a major area of concern and emphasis in modern financial management and in this text?
| A. |
Inflation and its effect on profits |
| B. |
Stable short-term interest rates |
| C. |
Changing international environment |
| D. |
Increased reliance on debt |
|
| 4. |
Which of the following is not a major area of concern and emphasis in modern financial management and in this text?
| D. |
Changing financial institutions |
|
| 5. |
The effect of the high rates of inflation experienced during the 1970s and early 1980s was to make:
| A. |
the gold standard was eliminated. |
| B. |
purchasing power increased. |
| D. |
capital budgeting decisions less reliable. |
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