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Questions and Answers
Financing decisions focus on how to finance long-term investments and working capital only.
Financing decisions focus on how to finance long-term investments and working capital only.
False
Investing decisions are supported by a capital budgeting analysis to minimize the probability of failure.
Investing decisions are supported by a capital budgeting analysis to minimize the probability of failure.
True
Operating decisions mainly deal with long-term investment financing.
Operating decisions mainly deal with long-term investment financing.
False
Dividend policies determine how to distribute all profits among equity shareholders.
Dividend policies determine how to distribute all profits among equity shareholders.
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The financial system only connects savers and borrowers.
The financial system only connects savers and borrowers.
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Savings for the financial system can only come from households and government agencies.
Savings for the financial system can only come from households and government agencies.
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Shares of stocks issued by publicly listed companies are examples of financial instruments.
Shares of stocks issued by publicly listed companies are examples of financial instruments.
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Debt securities issued by the National Government cannot be traded.
Debt securities issued by the National Government cannot be traded.
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Insurance companies invest insurance premiums in various securities until needed to pay off claims.
Insurance companies invest insurance premiums in various securities until needed to pay off claims.
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Commercial banks primarily use deposited funds to purchase stocks of firms or government agencies.
Commercial banks primarily use deposited funds to purchase stocks of firms or government agencies.
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Financial institutions provide business and services like banking, insurance, and investment management.
Financial institutions provide business and services like banking, insurance, and investment management.
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Insurance companies attempt to influence firm management to improve their own performance.
Insurance companies attempt to influence firm management to improve their own performance.
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Individuals deposit funds at commercial banks for purchasing insurance protection.
Individuals deposit funds at commercial banks for purchasing insurance protection.
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Financial institutions can include entities like commercial banks and government agencies.
Financial institutions can include entities like commercial banks and government agencies.
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