FIN 3403 EXAM 1 REVIEW QUESTIONS WITH
VERIFIED SOLUTIONS
Goal of the firm
maximise shareholder wealth
Sole proprietorship
business owned by a single individual
General partnership
all partners are fully liable for the indebtness incurred by the partnership
limited partnership
one or more of the partners has limited liability, restricted to the amount of capital he or she
invests in the partnership
corporation
an entity that legally functions separate and apart from its owners
S corporation
corporation that because of special qualifications is taxed as though it were a partnership
Limited liability company
a cross between a partnership and a corporation under which the owners retain limited liability
but the company is run and taxed like a partnership
public offering
a security offering where all investors have the opportunity to acquire a portion of the financial
claims being sold
private placement
a security offering limited to a small number of potential investors
venture capitalist
an investment firm that provides money to business start ups
primary market
market in which securities are offered for the first time for sale to potential investors
secondary market
market in which currently outstanding securities are traded
, Initial public offering
the first time a company issues stock to the public
seasoned equity offering
the sale of additional stock by a company whose shares are already publicly traded
money market
all institutions and procedures that facilitate transacations for short term instruments issued by
borrowers with very high credit ratings
capital market
market for long term financial instruments
spot market
cash market
futures market
markets where you can buy or sell something at a future date
organized security exchange
formal organizations that facilitate the trading of securities
over the counter market
all security markets except organized exchanges
NASDAQ
computerized system that provides price quotes on over 5000 over the counter stocks and also
facilitates trades by matching up buyers and sellers
investment banker
a financial specialist who underwrites and distributes new securities and advises corporate clients
about raising new funds
investment banker functions
underwriting, distributing, and advising
syndicate
a group of investment bankers who contractually assist in the buying and selling of a new
security issue
negotiated purchase
VERIFIED SOLUTIONS
Goal of the firm
maximise shareholder wealth
Sole proprietorship
business owned by a single individual
General partnership
all partners are fully liable for the indebtness incurred by the partnership
limited partnership
one or more of the partners has limited liability, restricted to the amount of capital he or she
invests in the partnership
corporation
an entity that legally functions separate and apart from its owners
S corporation
corporation that because of special qualifications is taxed as though it were a partnership
Limited liability company
a cross between a partnership and a corporation under which the owners retain limited liability
but the company is run and taxed like a partnership
public offering
a security offering where all investors have the opportunity to acquire a portion of the financial
claims being sold
private placement
a security offering limited to a small number of potential investors
venture capitalist
an investment firm that provides money to business start ups
primary market
market in which securities are offered for the first time for sale to potential investors
secondary market
market in which currently outstanding securities are traded
, Initial public offering
the first time a company issues stock to the public
seasoned equity offering
the sale of additional stock by a company whose shares are already publicly traded
money market
all institutions and procedures that facilitate transacations for short term instruments issued by
borrowers with very high credit ratings
capital market
market for long term financial instruments
spot market
cash market
futures market
markets where you can buy or sell something at a future date
organized security exchange
formal organizations that facilitate the trading of securities
over the counter market
all security markets except organized exchanges
NASDAQ
computerized system that provides price quotes on over 5000 over the counter stocks and also
facilitates trades by matching up buyers and sellers
investment banker
a financial specialist who underwrites and distributes new securities and advises corporate clients
about raising new funds
investment banker functions
underwriting, distributing, and advising
syndicate
a group of investment bankers who contractually assist in the buying and selling of a new
security issue
negotiated purchase
