Financial Management & Markets

Which of the following best describes the primary goal of financial management?. Maximizing sales revenue. Maximizing shareholder wealth. Minimizing cost of production. Increasing market share.

Which financial decision focuses on determining the firm’s optimal capital structure?. Investment decision. Dividend decision. Financing decision. Working capital decision.

The primary market is a market for: Trading previously issued securities. New issues of securities. Derivative instruments. Foreign exchange.

Which of the following is NOT a function of financial markets?. Providing liquidity. Price discovery. Managing company operations. Facilitating capital formation.

The money market deals primarily with: Long-term securities. Short-term debt instruments. Equity shares. Derivative contracts.

Which of the following best describes the role of a financial intermediary?. To issue government bonds. To link savers and borrowers. To regulate interest rates. To prevent inflation.

An efficient financial market is one in which: Prices fully reflect all available information. Prices are determined only by government policy. Only institutional investors can participate. Market participants are always rational.