Intro to Finance Exam 1 Exam
Questions and Answers (Latest 2026).
Financial Services - CORRECT ANSWERS the area of finance concerned with the design and
delivery of advice and financial products to individuals, businesses, and governments
managerial finance - CORRECT ANSWERS concerned with the duties of the financial manager
working in a business
financial managers - CORRECT ANSWERS administer the financial affairs of all types of
businesses- private and public, large and small, profit-seeking and not-for-profit
sole proprietorship - CORRECT ANSWERS a business owned by one person and operated for
his or her own profit
partnership - CORRECT ANSWERS a business owned by two or more people and operated for
profit
corporation - CORRECT ANSWERS an entity created by law; have legal powers of an individual
in that it can sue and be sued, make and be party to contracts, and acquire property in its own name
decision rule for financial managers - CORRECT ANSWERS only take actions that are expected
to maximize shareholder wealth
stakeholders - CORRECT ANSWERS groups such as employees, customers, suppliers, creditors,
owners, and others who have a direct economic link to the firm
, marginal cost-benefit analysis - CORRECT ANSWERS the economic principle that states that
financial decisions should be made and actions taken only when the added benefits exceed the added
costs
corporate governance - CORRECT ANSWERS refers to the rules, processes, and laws by which
companies are operated, controlled, and regulated
individual investors - CORRECT ANSWERS investors who own relatively small quantities of
shares so as to meet personal investment goals
institutional investors - CORRECT ANSWERS investment professionals, such as banks,
insurance companies, mutual funds, and pension funds, that are paid to manage and hold large
quantities of securities on behalf of others
principal-agency relationship - CORRECT ANSWERS an arrangement in which an agent acts on
behalf of a principal
agency problems - CORRECT ANSWERS arise when managers place personal goals ahead of
the goals of shareholders
agency costs - CORRECT ANSWERS arise from agency problems that are borne by
shareholders and represent a loss of shareholder wealth
financial institutions - CORRECT ANSWERS intermediaries that channel the savings of
individuals, businesses, and governments into loans or investments
commercial banks - CORRECT ANSWERS institutions that provide savers with a secure place
to invest their funds and offer loans to individual business borrowers
Questions and Answers (Latest 2026).
Financial Services - CORRECT ANSWERS the area of finance concerned with the design and
delivery of advice and financial products to individuals, businesses, and governments
managerial finance - CORRECT ANSWERS concerned with the duties of the financial manager
working in a business
financial managers - CORRECT ANSWERS administer the financial affairs of all types of
businesses- private and public, large and small, profit-seeking and not-for-profit
sole proprietorship - CORRECT ANSWERS a business owned by one person and operated for
his or her own profit
partnership - CORRECT ANSWERS a business owned by two or more people and operated for
profit
corporation - CORRECT ANSWERS an entity created by law; have legal powers of an individual
in that it can sue and be sued, make and be party to contracts, and acquire property in its own name
decision rule for financial managers - CORRECT ANSWERS only take actions that are expected
to maximize shareholder wealth
stakeholders - CORRECT ANSWERS groups such as employees, customers, suppliers, creditors,
owners, and others who have a direct economic link to the firm
, marginal cost-benefit analysis - CORRECT ANSWERS the economic principle that states that
financial decisions should be made and actions taken only when the added benefits exceed the added
costs
corporate governance - CORRECT ANSWERS refers to the rules, processes, and laws by which
companies are operated, controlled, and regulated
individual investors - CORRECT ANSWERS investors who own relatively small quantities of
shares so as to meet personal investment goals
institutional investors - CORRECT ANSWERS investment professionals, such as banks,
insurance companies, mutual funds, and pension funds, that are paid to manage and hold large
quantities of securities on behalf of others
principal-agency relationship - CORRECT ANSWERS an arrangement in which an agent acts on
behalf of a principal
agency problems - CORRECT ANSWERS arise when managers place personal goals ahead of
the goals of shareholders
agency costs - CORRECT ANSWERS arise from agency problems that are borne by
shareholders and represent a loss of shareholder wealth
financial institutions - CORRECT ANSWERS intermediaries that channel the savings of
individuals, businesses, and governments into loans or investments
commercial banks - CORRECT ANSWERS institutions that provide savers with a secure place
to invest their funds and offer loans to individual business borrowers
