WGU C214 Financial Management Topic 1 Questions and Answers with complete

Corporate Finance - Answer-focuses on financial decision making by a firms management Investments - Answer-various types of financial instruments (stocks, bonds, etc) Banking or Financial Institutions - Answer-make money by paying depositors a smaller interest rate than the interest rate charged to borrowers Treasury Securities - Answer-generally bonds that are issued by the US government Corporate Bonds - Answer-firms borrowing from the public Stocks - Answer-a share of ownership in a company Primary financial markets - Answer-markets where securities are first issued Syndicate - Answer-a group that is temporarily formed to handle a bond or stock issue: generally large investment bank or institutional investors Underwriter - Answer-responsible for determining the value of the security; may purchase all the securities & then resale to investors Competitive sale - Answer-underwriters submit bids offering highest price/lowest interest rate; underwriter resales a slightly higher price Negotiated sale - Answer-underwriters submit bids, go thru interview to be selected Initial Public Offering (IPO) - Answer-first time selling of stocks to the public; occurs in primary marketSecondary financial markets - Answer-where securities are traded after the initial offering (stock market) Auction market - Answer-has a physical location & prices are determined by the highest price an investor is willing to pay (New York Stock Exchange)