, ACCESS Test Bank for Basic Finance 13th Edition Mayo
B B B B B B B B
Instructor BManual: BMayo/Lavelle, BBasic BFinance: BAn BIntroduction Bto BFinancial BInstitutions,
Investments, B and B Management, B 13e B © B 2023, B 9780357714744; B Chapter B 1: B An B Introduction B to B Basic B Finance
Instructor Manual B
Mayo/Lavelle, BBasic BFinance: BAn BIntroduction Bto BFinancial BInstitutions,
B Investments, Band BManagement, B13e B© B 2023, B9780357714744; BChapter B1: BAn
BIntroduction Bto BBasic BFinance
TABLE OF CONTENTS B B
Purpose B and B Perspective B of B the B Chapter .................................................... 2
Chapter B Objectives...................................................................................... 2
Key B Terms ................................................................................................. 2
What's B New B in B This B Chapter ...................................................................... 3
Chapter B Outline.......................................................................................... 3
Additional B Discussion B Questions.................................................................... 4
Additional B Activities B and B Assignments .......................................................... 5
© B 2023 B Cengage. B All B Rights B Reserved. B May B not B be B scanned, B copied B or
1
B duplicated, B or B posted Bto Ba Bpublicly Baccessible Bwebsite, Bin Bwhole Bo r mi
B ynursytest.store
, ACCESS Test Bank for Basic Finance 13th Edition Mayo
B B B B B B B B
Instructor BManual: BMayo/Lavelle, BBasic BFinance: BAn BIntroduction Bto BFinancial BInstitutions,
Investments, B and B Management, B 13e B © B 2023, B 9780357714744; B Chapter B 1: B An B Introduction B to B Basic B Finance
PURPOSE AND PERSPECTIVE OF THE CHAPTER
B B B B B
The Bpurpose Bof Bthis Bchapter Bis Bto Bintroduce Bthe Bdiscipline Bof Bfinance. BIt Bbegins
Bwith Bthe Bdivisions Bof Bfinance: Bfinancial Binstitutions, Binvestments, Band Bbusiness
Bfinance. BThis Bis Bfollowed Bby Bkey Bfinancial Bconcepts Bof Bsources Bof Bfinance: Brisk
Band Breturn, Bfinancial Bleverage, Band Bvaluation. BThe Bsubsequent Bsections Bconsider
Bassumptions Bmade Bin Bfinance Band Bthe Brelationship Bof Bfinance Bto Bother Bbusiness
Bdisciplines. BThis Bchapter Bends Bwith Bthe Bplan Bfor Bthe Btext, Boutlining Bboth Bthe
Bparts Band Bthe Bchapters.
CHAPTER OBJECTIVES B
The Bfollowing Bis Ban Boutline Bof Bthis Bchapter:
1.1 The Bdivisions Bof Bfinance.
1.2 Key B financial B concepts.
1.3 Assumptions.
1.4 Finance B and B other B business B disciplines.
1.5 Plan B of B the B text.
[return Bto Btop]
KEY TERMSB
Assets: BItems Bor Bproperty Bowned Bby Ba Bfirm, Bhousehold, Bor Bgovernment Band Bvalued
Bin Bmonetary Bterms.
Balance Bsheet: BFinancial Bstatement Bthat Benumerates B(as Bof Ba Bpoint Bin Btime) Bwhat
Ban Beconomic Bunit Bowns Band Bowes Band Bits Bnet Bworth.
Equity: BOwners’ B investment B in B a B firm; B a B firm’s B book B value B or B net B worth.
Financial Bleverage: BUse Bof Bborrowed Bfunds Bin Breturn Bfor Bagreeing Bto Bpay Ba Bfixed
Breturn; Buse Bof Bdebt Bfinancing.
Liabilities: B What B an B economic B unit B owes, B expressed B in B monetary B terms.
Return: BWhat B is B earned B on B an B investment; B the B sum B of B income B and B capital
B gains Bgenerated Bby Ban Binvestment.
Risk: BPossibility Bof Bloss; B the Buncertainty Bthat Bthe Banticipated B return Bwill Bnot B be
Bachieved.
Valuation: BProcess Bof Bdetermining Bwhat Ban Basset Bis Bcurrently Bworth.
[return Bto Btop]
© B 2023 B Cengage. B All B Rights B Reserved. B May B not B be B scanned, B copied B or
2
B duplicated, B or B posted Bto Ba Bpublicly Baccessible Bwebsite, Bin Bwhole Bo r mi
B ynursytest.store
, ACCESS Test Bank for Basic Finance 13th Edition Mayo
B B B B B B B B
Instructor BManual: BMayo/Lavelle, BBasic BFinance: BAn BIntroduction Bto BFinancial BInstitutions,
Investments, B and B Management, B 13e B © B 2023,B 9780357714744; B Chapter B 1: B An B Introduction B to B Basic B Finance
WHAT'S NEW IN THIS CHAPTER
B B B B
The Bfollowing Belements Bare Bimprovements Bin Bthis Bchapter Bfrom Bthe Bprevious
Bedition:
N/A
[return Bto Btop]
CHAPTER OUTLINE B
The Bfollowing Boutline Borganizes Bactivities B(including Bany Bexisting Bdiscussion
Bquestions Bin BPowerPoints Bor Bother Bsupplements) Band Bassessments Bby Bchapter
B(and Btherefore Bby Btopic), Bso Bthat Byou Bcan Bsee Bhow Ball Bthe Bcontent Brelates Bto
Bthe Btopics Bcovered Bin Bthe Btext.
I. The BDivisions Bof BFinance B(PPT B3)
a. Finance Bis Bgenerally Bdivided Binto Bthree Bareas: Bfinancial
Binstitutions, Binvestments, Band Bbusiness Bfinance.
i. Financial Binstitutions: BConcerned Bwith Bthe Binstitutional
Baspects Bof Bthe Bdiscipline, Bwhich Bencompass Bthe Bcreation Bof
Bfinancial Bassets, Bthe Bmarkets Bfor Btrading Bsecurities, Band Bthe
Bregulation Bof Bfinancial Bmarkets.
ii. Investments: BConcerned Bwith Bthe Banalysis Bof Bindividual
Bassets Band Bthe Bconstruction Bof Bwell-diversified Bportfolios.
iii. Corporate Bor Bbusiness Bfinance: BEmphasizes Bthe Brole Bof
Bthe Bfinancial Bmanager.
II. Key B Financial B Concepts B (PPT B 4)
a. Sources B of B Finance
i. Sources Band Bthe Bassets Bthat Ba Bfirm Bowns Bare Boften
Bsummarized Bin Ba Bfinancial Bstatement Bcalled Ba Bbalance
Bsheet.
ii. A Bbalance Bsheet Benumerates Bat Ba Bmoment Bin Btime Bwhat
Ban Beconomic Bunit, Bsuch Bas Ba Bfirm, Bowns, Bits Bassets; Bwhat
Bit Bowes, Bits Bliabilities; Band Bthe Bowners’ Bresidual Bclaim
Bthe Bfirm, Bthe Bequity.
b. Risk B and B Return
i. Investments Bare Bmade Bbecause Bthe Bindividual Bor
Bmanagement Banticipates Bearning Ba Breturn.
ii. Sources Bof Breturn Bare Bincome Band Bprice Bappreciation
iii. Risk Bis Bthe Buncertainty Bthat Ban Bexpected Breturn Bmay
Bnot Bbe Bachieved.
c. Financial Bleverage
i. The Buse Bof Bborrowed Bfunds.
d. Valuation
i. Determination Bof Bwhat Ban Basset Bis Bcurrently Bworth.
ii. Goal B of B management: B maximization B of B shareholder B value.
© B 2023 B Cengage. B All B Rights B Reserved. B May B not B be B scanned, B copied B or
3
B duplicated, B or B posted Bto Ba Bpublicly Baccessible Bwebsite, Bin Bwhole Bo r mi
B ynursytest.store
B B B B B B B B
Instructor BManual: BMayo/Lavelle, BBasic BFinance: BAn BIntroduction Bto BFinancial BInstitutions,
Investments, B and B Management, B 13e B © B 2023, B 9780357714744; B Chapter B 1: B An B Introduction B to B Basic B Finance
Instructor Manual B
Mayo/Lavelle, BBasic BFinance: BAn BIntroduction Bto BFinancial BInstitutions,
B Investments, Band BManagement, B13e B© B 2023, B9780357714744; BChapter B1: BAn
BIntroduction Bto BBasic BFinance
TABLE OF CONTENTS B B
Purpose B and B Perspective B of B the B Chapter .................................................... 2
Chapter B Objectives...................................................................................... 2
Key B Terms ................................................................................................. 2
What's B New B in B This B Chapter ...................................................................... 3
Chapter B Outline.......................................................................................... 3
Additional B Discussion B Questions.................................................................... 4
Additional B Activities B and B Assignments .......................................................... 5
© B 2023 B Cengage. B All B Rights B Reserved. B May B not B be B scanned, B copied B or
1
B duplicated, B or B posted Bto Ba Bpublicly Baccessible Bwebsite, Bin Bwhole Bo r mi
B ynursytest.store
, ACCESS Test Bank for Basic Finance 13th Edition Mayo
B B B B B B B B
Instructor BManual: BMayo/Lavelle, BBasic BFinance: BAn BIntroduction Bto BFinancial BInstitutions,
Investments, B and B Management, B 13e B © B 2023, B 9780357714744; B Chapter B 1: B An B Introduction B to B Basic B Finance
PURPOSE AND PERSPECTIVE OF THE CHAPTER
B B B B B
The Bpurpose Bof Bthis Bchapter Bis Bto Bintroduce Bthe Bdiscipline Bof Bfinance. BIt Bbegins
Bwith Bthe Bdivisions Bof Bfinance: Bfinancial Binstitutions, Binvestments, Band Bbusiness
Bfinance. BThis Bis Bfollowed Bby Bkey Bfinancial Bconcepts Bof Bsources Bof Bfinance: Brisk
Band Breturn, Bfinancial Bleverage, Band Bvaluation. BThe Bsubsequent Bsections Bconsider
Bassumptions Bmade Bin Bfinance Band Bthe Brelationship Bof Bfinance Bto Bother Bbusiness
Bdisciplines. BThis Bchapter Bends Bwith Bthe Bplan Bfor Bthe Btext, Boutlining Bboth Bthe
Bparts Band Bthe Bchapters.
CHAPTER OBJECTIVES B
The Bfollowing Bis Ban Boutline Bof Bthis Bchapter:
1.1 The Bdivisions Bof Bfinance.
1.2 Key B financial B concepts.
1.3 Assumptions.
1.4 Finance B and B other B business B disciplines.
1.5 Plan B of B the B text.
[return Bto Btop]
KEY TERMSB
Assets: BItems Bor Bproperty Bowned Bby Ba Bfirm, Bhousehold, Bor Bgovernment Band Bvalued
Bin Bmonetary Bterms.
Balance Bsheet: BFinancial Bstatement Bthat Benumerates B(as Bof Ba Bpoint Bin Btime) Bwhat
Ban Beconomic Bunit Bowns Band Bowes Band Bits Bnet Bworth.
Equity: BOwners’ B investment B in B a B firm; B a B firm’s B book B value B or B net B worth.
Financial Bleverage: BUse Bof Bborrowed Bfunds Bin Breturn Bfor Bagreeing Bto Bpay Ba Bfixed
Breturn; Buse Bof Bdebt Bfinancing.
Liabilities: B What B an B economic B unit B owes, B expressed B in B monetary B terms.
Return: BWhat B is B earned B on B an B investment; B the B sum B of B income B and B capital
B gains Bgenerated Bby Ban Binvestment.
Risk: BPossibility Bof Bloss; B the Buncertainty Bthat Bthe Banticipated B return Bwill Bnot B be
Bachieved.
Valuation: BProcess Bof Bdetermining Bwhat Ban Basset Bis Bcurrently Bworth.
[return Bto Btop]
© B 2023 B Cengage. B All B Rights B Reserved. B May B not B be B scanned, B copied B or
2
B duplicated, B or B posted Bto Ba Bpublicly Baccessible Bwebsite, Bin Bwhole Bo r mi
B ynursytest.store
, ACCESS Test Bank for Basic Finance 13th Edition Mayo
B B B B B B B B
Instructor BManual: BMayo/Lavelle, BBasic BFinance: BAn BIntroduction Bto BFinancial BInstitutions,
Investments, B and B Management, B 13e B © B 2023,B 9780357714744; B Chapter B 1: B An B Introduction B to B Basic B Finance
WHAT'S NEW IN THIS CHAPTER
B B B B
The Bfollowing Belements Bare Bimprovements Bin Bthis Bchapter Bfrom Bthe Bprevious
Bedition:
N/A
[return Bto Btop]
CHAPTER OUTLINE B
The Bfollowing Boutline Borganizes Bactivities B(including Bany Bexisting Bdiscussion
Bquestions Bin BPowerPoints Bor Bother Bsupplements) Band Bassessments Bby Bchapter
B(and Btherefore Bby Btopic), Bso Bthat Byou Bcan Bsee Bhow Ball Bthe Bcontent Brelates Bto
Bthe Btopics Bcovered Bin Bthe Btext.
I. The BDivisions Bof BFinance B(PPT B3)
a. Finance Bis Bgenerally Bdivided Binto Bthree Bareas: Bfinancial
Binstitutions, Binvestments, Band Bbusiness Bfinance.
i. Financial Binstitutions: BConcerned Bwith Bthe Binstitutional
Baspects Bof Bthe Bdiscipline, Bwhich Bencompass Bthe Bcreation Bof
Bfinancial Bassets, Bthe Bmarkets Bfor Btrading Bsecurities, Band Bthe
Bregulation Bof Bfinancial Bmarkets.
ii. Investments: BConcerned Bwith Bthe Banalysis Bof Bindividual
Bassets Band Bthe Bconstruction Bof Bwell-diversified Bportfolios.
iii. Corporate Bor Bbusiness Bfinance: BEmphasizes Bthe Brole Bof
Bthe Bfinancial Bmanager.
II. Key B Financial B Concepts B (PPT B 4)
a. Sources B of B Finance
i. Sources Band Bthe Bassets Bthat Ba Bfirm Bowns Bare Boften
Bsummarized Bin Ba Bfinancial Bstatement Bcalled Ba Bbalance
Bsheet.
ii. A Bbalance Bsheet Benumerates Bat Ba Bmoment Bin Btime Bwhat
Ban Beconomic Bunit, Bsuch Bas Ba Bfirm, Bowns, Bits Bassets; Bwhat
Bit Bowes, Bits Bliabilities; Band Bthe Bowners’ Bresidual Bclaim
Bthe Bfirm, Bthe Bequity.
b. Risk B and B Return
i. Investments Bare Bmade Bbecause Bthe Bindividual Bor
Bmanagement Banticipates Bearning Ba Breturn.
ii. Sources Bof Breturn Bare Bincome Band Bprice Bappreciation
iii. Risk Bis Bthe Buncertainty Bthat Ban Bexpected Breturn Bmay
Bnot Bbe Bachieved.
c. Financial Bleverage
i. The Buse Bof Bborrowed Bfunds.
d. Valuation
i. Determination Bof Bwhat Ban Basset Bis Bcurrently Bworth.
ii. Goal B of B management: B maximization B of B shareholder B value.
© B 2023 B Cengage. B All B Rights B Reserved. B May B not B be B scanned, B copied B or
3
B duplicated, B or B posted Bto Ba Bpublicly Baccessible Bwebsite, Bin Bwhole Bo r mi
B ynursytest.store
