Corporate Finance Decisions Quiz

Financing decisions focus on how to finance long-term investments and working capital only.

Investing decisions are supported by a capital budgeting analysis to minimize the probability of failure.

Operating decisions mainly deal with long-term investment financing.

Dividend policies determine how to distribute all profits among equity shareholders.

The financial system only connects savers and borrowers.

Savings for the financial system can only come from households and government agencies.

Shares of stocks issued by publicly listed companies are examples of financial instruments.

Debt securities issued by the National Government cannot be traded.

Insurance companies invest insurance premiums in various securities until needed to pay off claims.

Commercial banks primarily use deposited funds to purchase stocks of firms or government agencies.

Financial institutions provide business and services like banking, insurance, and investment management.

Insurance companies attempt to influence firm management to improve their own performance.

Individuals deposit funds at commercial banks for purchasing insurance protection.

Financial institutions can include entities like commercial banks and government agencies.