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