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Questions and Answers
According to Principle 1 of Financial Management, what is the relationship between risk and expected return?
According to Principle 1 of Financial Management, what is the relationship between risk and expected return?
- Higher risk does not affect the expected return
- Risk and expected return are not related
- The higher the risk, the lower the expected return
- The more risk, the higher the expected return (correct)
What is the main focus of financial management?
What is the main focus of financial management?
- Understanding the concept of corporate world and financial statements
- Achieving the goals of the organization through efficient management of money (correct)
- Organizing and directing financial activities of the organization
- Managing the market and finance function
What is the role of financial managers?
What is the role of financial managers?
- Efficient and effective management of money to achieve organizational goals (correct)
- Planning and organizing financial activities
- Controlling the financial activities of the organization
- Understanding the concept of time value of money and financial statements
In financial management, what does the term 'time value of money' refer to?
In financial management, what does the term 'time value of money' refer to?
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What do financial ratios help in analyzing?
What do financial ratios help in analyzing?
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According to Principle 2, why is a dollar received today worth more than a dollar received in the future?
According to Principle 2, why is a dollar received today worth more than a dollar received in the future?
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In principle 4, what is the incremental cash flow?
In principle 4, what is the incremental cash flow?
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What does Principle 6 imply about efficient capital markets?
What does Principle 6 imply about efficient capital markets?
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What is the primary concern addressed in Principle 9?
What is the primary concern addressed in Principle 9?
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In financial decision making according to Principle 10, what forms the basis for personal judgments about ethical behavior?
In financial decision making according to Principle 10, what forms the basis for personal judgments about ethical behavior?
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