C214 WEBINAR 1 EXAM QUESTIONS
WITH COMPLETE ANSWERS { GRADED
A+}
loan from investor to corporation - ✔✔bond
sale of ownership or share to investor - ✔✔stock
bond is a _______ - ✔✔debt
goal of a corporation is to - ✔✔enhance stock price over the long run
benefits and costs of a corporation are shared by - ✔✔shareholders, employees,
customers
management makes self-interest decisions to the detriment of the firm is _______ -
✔✔agency cost
4 principles of financial decision making - ✔✔efficient markets, risk aversion,
time value of money, uncertainty
, (2) efficient market impacts - ✔✔well managed firms have lower cost of
financing, investor transaction costs are minimized
investors require ____________ return to compensate for higher risk. known as a
_______________ - ✔✔higher returns, risk premium
the minimum yield or profit necessary to buy the security - ✔✔required return
_________________ is the difference between the required return and risk-free
return - ✔✔risk premium
TVM depends on (3) things - ✔✔size, timing, and certainty of cash flows
Blackrock is a type of corporation that ______ bonds and stocks - ✔✔buy
flow of money in a primary market - ✔✔corporation issues stock/bonds,
investment banks buy stock and sells to investors
flow of money in buy-backs - ✔✔corporation gives money to investment banks,
banks buy securities and investors get cash
secondary market flow - ✔✔trading of stocks and securities between Invesment
banks and investors
bond market has _________liquidity in comarison to the stock market - ✔✔less
WITH COMPLETE ANSWERS { GRADED
A+}
loan from investor to corporation - ✔✔bond
sale of ownership or share to investor - ✔✔stock
bond is a _______ - ✔✔debt
goal of a corporation is to - ✔✔enhance stock price over the long run
benefits and costs of a corporation are shared by - ✔✔shareholders, employees,
customers
management makes self-interest decisions to the detriment of the firm is _______ -
✔✔agency cost
4 principles of financial decision making - ✔✔efficient markets, risk aversion,
time value of money, uncertainty
, (2) efficient market impacts - ✔✔well managed firms have lower cost of
financing, investor transaction costs are minimized
investors require ____________ return to compensate for higher risk. known as a
_______________ - ✔✔higher returns, risk premium
the minimum yield or profit necessary to buy the security - ✔✔required return
_________________ is the difference between the required return and risk-free
return - ✔✔risk premium
TVM depends on (3) things - ✔✔size, timing, and certainty of cash flows
Blackrock is a type of corporation that ______ bonds and stocks - ✔✔buy
flow of money in a primary market - ✔✔corporation issues stock/bonds,
investment banks buy stock and sells to investors
flow of money in buy-backs - ✔✔corporation gives money to investment banks,
banks buy securities and investors get cash
secondary market flow - ✔✔trading of stocks and securities between Invesment
banks and investors
bond market has _________liquidity in comarison to the stock market - ✔✔less
