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Business Management - Test 3


1. How much money did Facebook pay to acquire WhatsApp?

    A. 16 billion
    B. 1.6 billion
    C. 160 million
    D. 16 million


2. In technical analysis, what is the statistical measure of the degree that two variables are linked?

    A. coefficient of variation
    B. variance
    C. covariance
    D. certainty equivalence


3. In determining the balance of current assets, firms are confronted with a trade-off between?

    A. profitability and risk
    B. liquidity and marketability
    C. equity and debt
    D. short-term vs long-term borrowing


4. Which of the following is NOT true of stock splits?

    A. market price per share is reduced
    B. the number of outstanding shares is increased
    C. retained earnings are changed
    D. proportional ownership is unchanged


5. What is the process of managing assets in a way that will maximize a firm's value?

    A. financial leveraging
    B. lease management
    C. capital planning
    D. capital budgeting


6. What is the difference between a stock's par value and its offering price?

    A. payout in excess of yield
    B. capital in excess of par
    C. preferred yield
    D. expected yield


7. In general, the shorter the term of a certificate of deposit, the:

    A. less safe it is
    B. higher its interest rate
    C. lower its value
    D. lower its interest rate


8. What is the ratio that reflects a company's liquidity after inventory has been deducted?

    A. quick ratio
    B. asset turnover
    C. future ratio
    D. current ratio


9. What is the sale of common stock by a subsidiary in which the parent company has majority control?

    A. a pure play
    B. a spin-off
    C. a partial sell-off
    D. an equity carve-out


10. Which of the following may be included in a cash budget?

    A. depreciation charges
    B. dividends
    C. goodwill
    D. patent amortization






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