What Is the Primary Goal of Financial Management for a Sole

question 55

Multiple Choice

What is the primary goal of financial management for a sole proprietorship?

• A)Maximize net income given the current resources of the firm
• B)Decrease long-term debt to reduce the risk to the owner
• C)Minimize the tax impact on the proprietor
• D)Maximize the market value of the equity
• E)Minimize the reliance on fixed costs

Comprehend the differences between futures and forward contracts, including their trading venues.

Understand the concept of open interest and its significance in futures markets.

Identify the standardization of futures contracts and its difference from forward contracts.

Recognize basis and basis risk in the context of futures markets hedging.

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Definitions:

Protective Tariff

A tariff designed to shield domestic producers of a good or service from the competition of foreign producers.

Revenue Tariff

A tariff designed to produce income for the federal government.

Import Quota

A government-imposed limit on the quantity of a specific type of good that can be imported into a country over a set period of time.

Protective Tariff

A tariff imposed by a country on imported goods to protect domestic industries from foreign competition by making imported goods more expensive.