Chapter One Financial Economics Multiple Choice 1.The primary goal of corporate management is to shareholder wealth. (a)minimize (b)maximize (c)leverage (d)mitigate Answer:(b) 2.A stock market imposes discipline on managers to take actions to maximize the market value of the firm's shares (a)competitive,strong (b)dispersed,weak (c)mature,no (d)dispersed,strong Answer:(a) 3.The form is especially well suited to the separation of ownership and management of firms because it allows relatively frequent changes in owners by share transfer without affecting the operations of the firm. (a)corporate (b)sole proprietorship (c)partnership (d)household Answer:(a) 4. is anything that has economic value. (a)A partnership (b)An asset (c)A balance sheet (d)An income statement Answer:(b) 1-11-1 Chapter One Financial Economics Multiple Choice 1. The primary goal of corporate management is to ________ shareholder wealth. (a) minimize (b) maximize (c) leverage (d) mitigate Answer: (b) 2. A ________ stock market imposes ________ discipline on managers to take actions to maximize the market value of the firm’s shares. (a) competitive, strong (b) dispersed, weak (c) mature, no (d) dispersed, strong Answer: (a) 3. The ________ form is especially well suited to the separation of ownership and management of firms because it allows relatively frequent changes in owners by share transfer without affecting the operations of the firm. (a) corporate (b) sole proprietorship (c) partnership (d) household Answer: (a) 4. ________ is anything that has economic value. (a) A partnership (b) An asset (c) A balance sheet (d) An income statement Answer: (b)