Financial Management - Study Mode

[#386] __________ is concerned with the acquisition, financing, and management of assets with some overall goal in mind.
Correct Answer

(A) Financial management

Explanation

Solution: Financial management is concerned with the acquisition, financing, and management of assets with some overall goal in mind. Financial Management is the application of general principles of management to the financial possessions of an enterprise.

[#387] Degree of total leverage can be applied in measuring change in _________.
Correct Answer

(C) EPS to a percentage change in quantity

Explanation

Solution: Degree of total leverage can be applied in measuring change in EPS to a percentage change in quantity. Degree of total leverage is the ratio of percentage change in earnings per share to percentage change in sales revenue.

[#388] Investors can normally afford to assume larger risks in the ____ phase of the life- cycle.
Correct Answer

(B) consolidation

Explanation

Solution: Investors can normally afford to assume larger risks in the consolidation phase of the life- cycle.

[#389] The measure of business risk is __________.
Correct Answer

(A) operating leverage

Explanation

Solution: The measure of business risk is operating leverage. Operating leverage is a cost-accounting formula that measures the degree to which a firm or project can increase operating income by increasing revenue.

[#390] __________ is the most important investment decision because it determines the risk-return characteristics of the portfolio.
Correct Answer

(D) Asset allocation

Explanation

Solution: Asset allocation is the most important investment decision because it determines the risk-return characteristics of the portfolio. Asset allocation is an investment strategy that aims to balance risk and reward by apportioning a portfolio's assets according to an individual's goals, risk tolerance and investment horizon.