US CMA Part 2 Financial Management and Securities Markets — practice questions
80 free MCQs with worked solutions. Tap any question for the answer + explanation, or practice them all in the app.
Practice US CMA Part 2 Financial Management and Securities Markets in the app →Financial management is the art and science of doing what?How does the financial manager's work differ from the accountant's?What are the three key activities of the financial manager?What is the main goal of the financial manager?How is the value of a publicly owned corporation measured?Why is maximizing profits an inadequate goal on its own?What does the risk-return trade-off hold?Cash management means making sure of what?Which three instruments are named as the most popular marketable securities?Commercial paper is which kind of instrument?Which set names the three key cash management strategies?For the average manufacturing firm, accounts receivable are about what share of total assets?Production, marketing and finance managers disagree about inventory. What does the financial manager want?What makes a spending item a capital expenditure?Which process does a financial manager use to analyze long-term projects and pick the best ones?What are the most common reasons firms make capital expenditures?What separates a short-term loan from a long-term loan?On what basis is an unsecured loan granted?What are the three main types of unsecured short-term loans?A supplier delivers goods and bills the buyer for payment later. How does the buyer record that credit?Under a line of credit, what does the firm do besides pay interest on what it borrows?How does a revolving credit agreement differ from an ordinary line of credit?In what denominations and for what periods do corporations issue commercial paper?Why do many big companies use commercial paper rather than short-term bank loans?What is typically pledged as collateral for a secured short-term loan?What happens to a firm's accounts receivable in factoring?A basic principle of finance matches the term of the financing to what?What is the major advantage of debt financing?What is the financial risk that debt financing brings?Which statement correctly contrasts debt financing with equity financing?What are the three important forms of long-term debt?What maturities do term loans generally carry?A bond issuer owes the buyer which two payments?What is a mortgage loan?What does common stock represent?What is an initial public offering?Which is a genuine drawback of going public?Which three sources supply a firm with equity financing?What usually happens to the value of each share after a stock dividend is paid?What advantage do retained earnings hold over other sources of equity capital?How does a preferred stock dividend differ from a common stock dividend?Why is preferred stock more expensive for the issuing firm than debt financing?What do venture capitalists take in return for backing a new business?What share of the companies that apply do most venture capitalists actually finance?What do securities represent to the person holding them?Institutional investors account for about what share of the dollar volume of equities traded?In which market does the issuer of a security receive the proceeds of the sale?What is traded in the secondary market?What is underwriting, the main activity of the investment banker?Market interest rates fall below the fixed rate on a bond already in issue. What happens to that bond's price?What name is given to an unsecured corporate bond?How much more than high-quality corporate bonds do junk bonds generally earn?Which maturities separate Treasury bills, Treasury notes and Treasury bonds?How is the interest earned on U.S. government securities taxed?Why do revenue bonds carry higher interest rates than general obligation bonds?Why is the coupon rate on a municipal bond lower than on a corporate bond of similar quality?Which two agencies are named as the largest and best known assigners of bond ratings?Which rating marks the lowest grade still considered investment quality?What does a mutual fund do with the money its investors put in?For an investor with only $1,000, what is the main appeal of a mutual fund?How does the pricing of an exchange-traded fund differ from that of a mutual fund?How does an option differ from a futures contract?Which is the oldest and most prestigious broker market, and when did it begin?Broker markets account for about what share of the total dollar volume of shares traded in U.S. securities marA company already listed on the NYSE wants to list on the AMEX as well. What stands in its way?What share of annual share volume takes place on the regional exchanges?What did the SEC's Regulation NMS make the most important factor in securities trades?How do buyers and sellers transact in a dealer market?What was the NASDAQ when it was founded in 1971?The NASDAQ lists more companies than the NYSE. On which measure does the NYSE still lead?Why is investing in over-the-counter companies described as highly risky?Electronic communications networks let traders deal directly in what is known as which market?What does the Securities Act of 1933 require of a new securities issue?What did the 1964 amendment to the Securities Exchange Act of 1934 add to the SEC's powers?What is insider trading?The Securities Investor Protection Corporation insures each customer's account up to what amount?What does Regulation FD require of public companies?Under the rules approved in 2012, which falls in the S&P 500 Index trigger the three levels of market-wide cirHow did the NYSE answer the NASDAQ's head start in electronic trading?Since the Sarbanes-Oxley Act, what do CFOs consider their top priority?