The Primary Goal of fiNancial Management Is To

question 209

Multiple Choice

The primary goal of financial management is to:

• A) Maximize current sales.
• B) Maximize the current value per share of the existing stock.
• C) Avoid financial distress.
• D) Minimize operational costs.
• E) Maintain steady earnings growth.

---

Definitions:

Perfectly Negatively Correlated

A situation in which two variables move in opposite directions with a correlation coefficient of -1, implying that when one variable increases, the other decreases.

Risk-Free Portfolio

An investment group that is considered to have no risk of financial loss, typically represented by government bonds.

Expected Rate

The return that an investor anticipates or forecasts receiving on an investment over a set period.

Correlation Coefficient

A statistical measure ranging from -1 to 1 that indicates the strength and direction of a linear relationship between two variables.