Question

1.) What are the four basic areas of Finance Study?

a.) Corporate, Investments, Institutions, and Personal

b.) Personal, Taxes, Stocks, and Interest Rates

c.) Corporate, Personal, Taxes, and Insurance

d.) Capital Budgeting, Structure, Leverage, and Working Capital

2.) Shares of a company's stock can be traded by any member if the public are said to be publicly traded. Shares of a company's stock that are not publicly traded are considered to be:

a.) closely held

b.) risk free

c.) a good buy

d.) bonds

3.) What is a company's effective tax rate?

a.) total tax dollars owed for the current year

b.) the tax rate paid on the company's first income bracket

c.) the tax rate applied to the company's next dollar income

d.) the average rate of tax which a company pays as determined by dividing its tax liability by taxable income

Answer 1

1: a Corporate, Investments, Institutions, and Personal

The 4 basic areas of finance include study of corporate finance, investments management, financial institution management and personal finance such as retirement planning. Other options are not the core segments of finance but sub areas.

2: a.) closely held

If shares are not publicly traded, they are privately held by the owners. Other options do not relate to listing of stocks

3: d

Effective tax rate is the tax rate actually paid on Income. Hence it is Total tax/ Taxable income. Other options are not the definition of effective tax.