Only for Siddharth

1. Which of the following is often cited as the most significant stumbling block in achieving 

compliance goals within large financial organizations: 

A. Poor data quality C. Inadequate funding 

B. Lack of training D. Improper accounting system 

 

 2. Clayton recently invested $50,000 in an oil company. The company has agreed to use 

Clayton’s investment strictly for exploration purposes. Rather than writing off $50,000 from 

its corporate taxes, the company passed the deduction on to Clayton. Clayton can now 

write off the entire amount of his investment against his taxes. Clayton invested his money 

in 

A. offshore companies. C. government bonds. 

B. flow-through shares. D. derivatives. 

 

 3. To accommodate recent regulation changes, a brokerage firm must implement new 

financial reporting activities. What positive action can the firm take to help its employees 

adapt to the change? 

A. Hire additional employees who are knowledgeable about the regulations 

B. Survey the employees to get their opinions about the regulatory changes 

C. Revise the firm’s vision statement to include the importance of following regulations 

D. Educate and train the employees about the regulatory changes 

 

 4. Which of the following statements regarding financial institutions is true: 

A. Finance and insurance institutions typically hinder the flow or movement of money 

through the economy. 

B. If the flow of money into a financial institution slows down, there is less money 

available for the institution to lend or invest. 

C. Financial institutions concentrate the risk that individual savers and investors face 

among a small number of borrowers. 

D. Because each financial institution functions independently, the failure of one 

financial institution has little effect on the others. 

 

 5. Analyze the information in the mutual fund table about the AnMl mutual fund. 

 

 Total Returns Max Init 

Chrg 

Exp Ratio 

Name NAV Net 

 Chg 

YTD 

%ret 

4Wk

 %ret 

1 yr 3yr-R 5yr-R 

AnMl 21.52 -0.12 +17.7 +3.5 NA +22.3A +19.4A 0.00 1.40 

 

 Based on the information provided, what type of mutual fund is the AnMl fund? 

A. Back-load C. No-load 

B. Front-load D. Expiring back-load 

 

 6. Which of the following can be used to identify the unethical manipulation of records in a 

financial-information management system: 

A. Long-term liabilities C. Audit trails 

B. What-if planning D. Direct checks 

 

 7. Which of the following statements regarding accounting and finance is correct: 

A. Accounting focuses on the past, while finance focuses on the future. 

B. Accounting is much broader than finance, which focuses on investments. 

C. Financial managers typically report to the vice president of accounting. 

D. The finance department focuses on assets, while accountants track liabilities.