MULTIPLE CHOICES FOR CORPORATE FINANCE 1. Money in notes and coins are called .. a. cash c. reserves b. capital d.

salary 2. The dollar, the mark and the yen are all .. a. currencies c. money b. funds d. exchanges 3. Money borrowed from a bank is a .. a. deposit c. loan b. income d. tax 4. Borrowed money that has to be paid back constitutes a .. a. debt c. subsidy b. fund d. income 5. All the money received by a person or a company is known as .. a. aid c. wages b. income d. outgoings 6. The money earned for a weeks manual work is called .. a. income c. wages b. salary d. commissions 7. The money paid for a months work is a .. a. loan c. wages b. rent d. salary 8. Money placed to banks and other savings institutions constitutes .. a. capital c. finance b. mortgage d. deposits 9. Money paid by the government or a company to a retired person is a .. a. pension c. subsidy b. rebate d. living expenses 10. The money that will ultimately be used to pay pensions is kept in a .. a. budget c. fund b. deposit d. reserves 11. The money needed to start a company is called a. aid c. capital b. debt d. deposit 12. Estimated expenditure and income is written in a a. budget c. reserve b. statement d. report 13. A persons money in a business is known as his or her a. deposit c. fund b. income d. stake 14. Money given to producers to allow them to sell cheaply goods is called a a. loan c. subsidy b. rebate d. liabilities
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15. The money paid to lawyers, architects, private schools, etc. is called a. fees c. wages b. installments d. salaries 16. Money given to developing countries by richer ones is known as a. aid c. subsidy b. debt d. payment 17. People who buy stocks or shares are called in Britain, and stockholders in the U. S. A (although most of the shares of all leading companies are held by institutional investors such as pension funds and insurance companies). a. shareholders c. investors b. depositors d. debtors 18. People who buy securities expecting their price to rise so they can resell them before the next settlement day are known as a. bears c. bulls b. stags d. investors 19. People who sell shares hoping to buy them back at a lower price before the next settlement day are called a. bears c. stags b. bulls d. depositors 20. People who buy new share issues, hoping to resell them at a profit if the issue is over-subscribed are known as a. bears c. bulls b. debtors d. stags 21. Shareholders place their orders with, and sometimes seek advice from , who are members of the Stock Exchange, but who can work anywhere with a telephone and a computer screen connected to the Stock Exchange. a. arbitrageurs c. market-makers b. day traders d. stockbrokers 22. The people who invest money in shares are called a. creditors c. shareholders b. debtors d. entrepreneurs 23. is financial protection against medical expenses for sickness or accidental injuries. a. Living expenses c. Social security b. Heath insurance d. Bonus 24. Money paid to salespeople and agents: a certain percentage of the income the employee generates is ... a. salary c. pension b. bills d. commission 25. American and European companies usually put the assets on the and capital and liabilities on the a. right/left c. vertical axis b. left/right d. none of the above
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26. Cash, goods, machinery, plant, equipment are considered as a. tangible assets c. intangible assets b. current assets d. company assets 27. People who are owed money are called a. creditors c. lenders b. debtors d. liabilities 28. Trade advantages, patents, trademarks and prestige are considered a. current assets c. tangible assets b. intangible assets d. fixed assets 29. are companies or people who owe money they will have to pay in the near future. a. Debtors c. Creditors b. Borrowers d. Lenders 30. are people who put money into a business in the hope of making a profit. a. Spenders c. Customers b. Lenders d. Investors 31. Money invested in a company just before it joins a stock exchange is sometimes called financing. a. return c. mezzanine b. net worth d. exit 32. Stocks, shares and bonds can collectively be called a. equities. c. gifts. b. securities. d. share capital. 33. The place where the stocks and shares of listed or quoted companies are bought and sold are called a. public company. c. stock markets. b. primary markets. d. over the counter. 34. If you would like to borrow money to buy a house, you should ask the bank for a a. social security. c. mortgage. b. commission. d. health insurance. 35. A company gets independent accountants to produce a report before going public. a. profit and loss c. financial b. balance d. due diligence 36. If the company goes into liquidation, holders of are repaid before the other shareholders, but after owners of bonds and other debts. a. ordinary shares c. common shares b. preference shares d. stocks 37. are stocks in large companies with a reputation for quality, reliability and profitability. a. blue chips c. income stocks b. value stocks d. growth stocks
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38. The is the price it is currently being traded at on the stock exchange and it can change every minute during trading hours. a. nominal value c. market share b. primary market d. market price 39. are people who buy and sell shares rapidly, hoping to make a profit. a. Investors c. Creditors b. Speculators d. Lenders 40. are investors who buy stocks in issues that are over-subscribed, so they can resell them as a profit. a. Bulls c. Stags b. Bears d. Borrowers 41. Stockholders can make a - it means that they can increase the amount of money they have by selling their stocks at a higher price than they paid for them. a. capital gain c. dividend b. profit d. commission 42. Brokers in turn buy shares from and sell them to , who are wholesalers in stocks and shares, and who guarantee to make a market at all times with brokers. a. market makers c. debtors b. bears d. bulls 43. are people who occupy a position of trust within an organization and possess information not known to the public: buying or selling shares when in possession of such information that affects their price is illegal. a. Insiders c. Arbitrageurs b. Market-makers d. Stockholders 44. The stock market consists of a. the capital and loan markets. b. the stock and bond markets. c. the exchange and short-term loan markets. d. the interbank and long-term markets. 45. Based on the mode of the markets, stock exchange can be classified as a. the debt and capital share markets. b. the exchange and over-the-counter markets. c. the primary and secondary markets. d. the stock and bond markets. 46. The market where the IPOs is introduced is called a. the money market. c. the secondary market. b. the primary market. d. the exchange market. 47. Which of the following statement is TRUE to the primary market? a. The primary market is the place to increase the capital for the economy. b. The primary market is the place where all the unlisted shares are traded.
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c. The primary market is the place to make the cash flow increase. d. The issued share prices are equal to their par value. 48. The secondary market is a. the place where the listed stocks are traded. b. the place where all the issued stocks are traded. c. the place where the middle and long-term capital is mobilized. d. the place where the blue-chips and growth stocks are traded. 49. The following characteristics belong to the preference shares EXCEPT a. The holders have their right to manage and control the company. b. The holders have their priority in receiving their dividends. c. The holders have received the fixed dividends. d. The holders have their prior rights than the ones of ordinary shares in case of bankruptcy. 50. The financial assets consist of a. the banknotes. c. coins. b. stocks, bonds, notes, etc. d. all of them 51. The secondary market is a. the place where all the IPOs are traded. b. the place where the capital is made to the issuers. c. the place where all the stocks are sold or purchased to the other investors. d. the place where the stocks are traded on the OTC. 52. Which of the following characteristics do not belong to the ordinary shares or stocks? a. high risks. b. holders are prior to repay the debt in case of bankruptcy. c. high return. d. the floating prices, especially in the secondary market. 53. Preference shares are similar to the bonds in a. paying the capital equal to the par value at the maturity. b. paying fixed dividends and being issued on the percentage of the par value. c. converting into shares. d. all of them. 54. The people who possess the shares or stocks are called a. lenders. c. members. b. bondholders. d. shareholders/stockholders 55. Which of the following people are considered the possessors of the public companies? a. debtors c. bondholders b. ordinary and preference shareholders d. neither of them 56. When purchasing shares or stocks, the investors become a. the people who own their capital. b. the people who use their capital.
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c. a & b d. a & b are wrong 57. The primary market is the place where a. to purchase and sell the issued stocks or shares. b. to exchange the possession of the stocks or shares. c. only to buy the issued shares. d. only to sell the IPOs. 58. When the company is in liquidation, the holders of the ordinary shares a. do not have anything from that liquidation. b. are the first holders to repay the capital. c. are the holders who will be repaid before the holders of preference shares. d. are the last holders to be repaid. 59. The market prices of the shares are a. the value of the shares on the book value. b. the value of the shares in the market. c. the initial bidding prices of the investors. d. the value that reflects the capital of the issued companies. 60. are issued along with the bonds or preference shares that allow the holders to have their rights to purchase a number of the right shares with fixed prices and at a given period of time. a. Ordinary shares c. Warrants b. Bonds d. Options 61. are sometimes issued with bonds, and give the buyer the right to buy the same firms equities within a certain period. Unlike convertible bonds, the bond itself is not converted into shares. a. Options c. Swaps b. Futures d Warrants 62. pay no interest, but are sold at a large discount and ultimately redeemed at face value. They consequently yield capital gain, often taxed at a lower rate than interest, which is considered as income. a. Deposits c. Forwards c. Derivatives d. Zero coupon bonds 63. are high yielding bonds issued by less secure companies and by companies seeking to finance leveraged buyouts. a. Junk bonds c. Convertible bonds c. Floating rate bonds d. Fallen angel bonds 64. Future markets deal in contracts for standardized quantities of commo-dities, currencies, etc, for specific time period, while non-standardized deals can be negotiated in an over-the-counter market, called a. future contracts c. forward contracts b. derivative contracts d. call option contracts 65. An .. is something owned by a company which has the power to make money. a. asset c. deposit
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b. auditor d. exposure 66. A .. is an amount of money owned by a company to a lender of supplier. a. dividend c. deposit b. debtor d. liability 67. .. is the capital that a company has from shares rather than from loans. a. Securities c. Retained earnings b. Equity d. Earnings per share 68. A new company is called a start .. a. off c. down b. in d. up 69. Options and futures are types of .. a. debts. c. derivatives. b. accounts. d. strategies. 70. If a company borrows money to fund the major part of an investment, the investment is said to be highly .. a. risky. c. subsidized. b. leveraged. d. costly. 71. Before making an investment, it is wise to make a thorough investment .. a. research. c. study. b. test. d. analysis. 72. When a company stops operating because of financial difficulty and its assets are sold to pay its debts, this is called .. a. liquidity. c. liquidation. b. bankruptcy. d. closure. 73. Because of the profit potentials, institutions like .. and .. are increasingly investing in new companies, particularly hi-tech ones. a. pension funds/insurance companies. c. pensions/public companies b. insurance/angel investors d. angel investors/pensions 74. .. generally invest in the early stage of a new company. a. Venture companies c. Angel investors b. Venture capitalists d. Bull investors 75. A firm listed on a stock exchange is a .. a. start-up company. c. private company. b. venture company. d. public company. 76. New businesses often have to get finance from .. companies. a. public c. risk capital b. private d. financial 77. Banks are usually .. to lend money to new companies. a. flexible c. strict b. reluctant d. available 78. The company produces a .. which explains to financial position, and gives details about the senior managers and the financial results from previous years. a. prospectus c. due diligence
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b. financial status d. flotation 79. The public company gets advice from a(n) .. bank about how many shares to offer and at what prices. a. commercial c. state b. private d. investment 80. Holders of preference shares have more chance of getting some of their capital back if a company .. a. goes run. c. goes bankrupt. b. goes into liquidation. d. go public. 81. The .. of a share the price written on a share is rarely the same as its market price. a. discount price c. nominal price b. goods price d. ordinary price 82. Companies that require further capital can issue .. to their existing shareholders. a. preference shares c. ordinary shares b. junk shares d. right issues 83. Stocks in large companies with a reputation for quality, reliability and profitability are called .. a. growth shares. c. junk stocks. b. blue chips. d. income shares. 84. .. are the stocks that investors believe they are trading for less than they are worth. a. Value shares. c. Blue chips b. Income stocks d. Defense shares 85. In Britain, government bonds are known as .., while in American, it is called Treasury bonds. a. gilt-edged bonds c. corporate bonds b. treasury notes d. commercial paper 86. .. pay no interest but are sold at a big discount on their par value. a. Junk bonds c. Zero coupon bonds b. Convertible shares d. Preference bonds 87. The contract that an asset is sold at a fixed price on a fixed date in the future is called . a. option contract. c. derivative contract b. future contract. d. swap contract. 88. .. are contracts that specify the price at which a certain currency will be bought or sold on a specified date. a. Currency futures c. Interest rate futures b. Stock futures d. Commodity futures 89. .. are like futures that they give the possibility but not the obligation to buy or sell an asset in the future. a. Swaps c. Options b. Warrants d. Futures
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90. Some companies issue .., which, like options, give the right to buy stocks in the future at a particular price, probably higher than the current market price. a. derivatives c. forwards b. takeover bids d. warrants 91. Finance refers to offering funds to .. a. individuals. c. governments b. enterprises. d. all of the above. 92. In order to raise capital for projects, the government .. a. borrows money from the World Bank. b. imposes tax on small companies. c. increases interest rate. d. issue bonds. 93. After getting large deposits from customers, the bank .. a. keeps them in the reserve. c. pays employees salaries. b. lends. d. buys foreign currency. 94. The financial institution is as an intermediary since .. a. it gets deposits from customers and then it provides loans to customers. b. it operates between the buyers and the sellers. c. it takes capital from its reserve and offers to its creditors. d. it interferes with financial activities. 95. A corporate can raise capital by selling .. to investors. a. assets c. business plans b. stocks d. human resources 96. An association of two or more people who come together to run a business is called .. a. creditor. c. partnership. b. debtor. d. angel. 97. .. is an organized market for the issue of new securities and the exchange of second-hand ones. a. Stock exchange c. Trading floor b. Traditional market d. The over-the-counter market 98. People who have ideas for setting up new businesses are called .. a. lenders. c. entrepreneurs. b. investors. d. borrowers. 99. New businesses often have to get finance from .. companies. a. financial c. insurance b. venture or risk capital d. stock 100. Individuals who lend money to new companies are sometimes called .. a. entrepreneurs. c. investors. b. debtors. d. angels/angel investors 101. The market where the newly-issued shares are gone to the public is .. a. money market. c. secondary market. b. financial market. d. primary market.
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102. Which of the following sentences is TRUE to the primary market? a. to raise the investment capital to the economy. b. the place where all the listed securities are sold. c. to increase the moneys velocity of circulation. d. the issued price is the same as the nominal price. 103. The secondary market is .. a. the place where all the listed shares are only bought. b. the place where all the issued shares are traded. c. the place where enterprises mobilize their medium and long term capital by issuing shares or stocks. d. the place where the growth and preference shares are sold. 104. The stock exchange consists of .. a. capital and hire purchase market. b. share and bond market. c. foreign exchange and money market. d. cross-holding bank and financial market. 105. If I expect a stock price to go up in the short term, I buy .. instead of the stock. a. put option c. call option b. in-the-money d. out-of-the-money 106. .. are arrangements between institutions to exchange interest rate of currencies, for example, dollar for yen. a. Swaps c. Options b. In-the-money d. Out-of-the-money 107. If your stock is trading at below the exercise, the seller will gain the .. a. warrant. c. swap. b. option d. premium. 108. Investors can buy a .. to hedge against falls in the price of stocks. a. call option c. warrant b. put option d. swap 109. The .. theory states that it is impossible to predict future changes in stock prices. a. random walk c. effective market b. technical analysis d. fundamental analysis 110. .. believes that market prices result from the psychology of investors rather than the real economic value. a. random walk theory c. technical analysis b. fundamental analysis d. effective market hypothesis 111. .. are things that impact on individual companies, for instance, production problems or sudden fall in sales. a. Systematic risks c. Market risks b. Unsystematic risks d. Potential risks 112. Which gives the highest potential return to an investor? a. A corporate bond c. A junk bond
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b. A Treasury bond d. A zero coupon bond 113. Credit agencies like Standard & Poors and Moodys gives the .. to grand or rate the ability to repay the principal. a. default c. convertibles b. credit ratings d. fallen angels 114. Which is the most profitable for an investor if interest rates rise? a. a Treasury bond. c. a Treasury note. b. a floating rate note. d. corporate bonds 115. .. are agreements between banks and investors and companies to issue fixed income securities bonds, certificates of deposit, money market deposits, etc. a. Currency futures c. Interest rate futures b. Stock futures d. Standardized contracts

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