C214 Financial Management Exam Questions and Answers

C214 Financial Management Exam Questions and Answers Finance is a subfield with in - Answer- Economics Which of the following is not an example of firm capital? - Answer- Financial Markets Capital is defined as a - Answer- financial asset Corporate finance is devoted to understanding various types of - Answer- financial instruments Which of the following is an example of firm capital? - Answer- Cash Corporate finance focuses on the decision making by the - Answer- Management What are the three important areas of finance - Answer- Corporate finance, investments, and banking/financial institutions Banks make money when interest rates they charge money to borrowers are less than interest rates they pay to depositors - Answer- False Stocks and Bonds are two types of - Answer- financial instruments Stocks represent ownership in - Answer- a particular company Companies can raise capital by issuing - Answer- bonds or stocks A stock is a instrument issued by - Answer- corporations A treasury bond is a debt instrument issued by - Answer- corporations or governments A stock is a share of ________________ in a particular company - Answer- ownership A bond is similar to - Answer- A loan Primary financial markets where issuers - Answer- place new securities with investors What are the two ways a syndicate can place a bond? - Answer- Competitive sales or negotiated sale An IPO is a - Answer- New equity offering An IPO on the - Answer- Primary market Syndicates are generally made up of - Answer- investment banks and other institutional investors Negotiated sales - Answer- allow underwriters to submit bids to purchase bonds Who is the worlds largest secondary financial market - Answer- New York Stock Exchange (NYSE) Auction markets - Answer- Have a physical location Dealer markets - Answer- Do not have a physical location Nasdaq is an example of a - Answer- Dealer market Stocks that are listed on dealer markets generally have - Answer- multiple dealers for each stock When dealers have to compete with one another, transaction costs will generally - Answer- Decrease Markets are where - Answer- prices are determined The ___________ specialist has an objective to provide liquidity to the market. - Answer- NYSE The NYSE specialist will charge _________________ to sellers of the stock - Answer- higher prices