Finance and Market Management Principles Quiz

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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?

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?

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?

The idea that money available today is worth more than the same amount in the future Signup and view all the answers

What do financial ratios help in analyzing?

Financial performance and position of an organization Signup and view all the answers

According to Principle 2, why is a dollar received today worth more than a dollar received in the future?

Due to the opportunity to earn interest on money received today Signup and view all the answers

In principle 4, what is the incremental cash flow?

The difference between the projected cash flows if the project is selected and if it is not selected Signup and view all the answers

What does Principle 6 imply about efficient capital markets?

The values of all assets at any instant fully reflect all available information Signup and view all the answers

What is the primary concern addressed in Principle 9?

The difficulty in measuring a project's or an asset's risk Signup and view all the answers

In financial decision making according to Principle 10, what forms the basis for personal judgments about ethical behavior?

Each person's own set of values Signup and view all the answers

Finance and Market Management Principles Quiz

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Questions and Answers

According to Principle 1 of Financial Management, what is the relationship between risk and expected return?

What is the main focus of financial management?

What is the role of financial managers?

In financial management, what does the term 'time value of money' refer to?

What do financial ratios help in analyzing?

According to Principle 2, why is a dollar received today worth more than a dollar received in the future?

In principle 4, what is the incremental cash flow?

What does Principle 6 imply about efficient capital markets?

What is the primary concern addressed in Principle 9?

In financial decision making according to Principle 10, what forms the basis for personal judgments about ethical behavior?

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