FIN 3100 // Exam 1 (CH 1,2,3,4) correctly
answered already passed
Corporate Finance - correct answer ✔✔the financial management of assets and corporate financing
decisions
same principles for nonprofit and for-profit
Capital Markets - correct answer ✔✔markets that exist where businesses are able to finance operations
as well as large purchases over long periods of time
interest rates, stock/bond prices
Investments - correct answer ✔✔relate to decisions concerning stocks and bonds and include a number
of activities
- security analysis, market analysis
Security Analysis (Investment) - correct answer ✔✔deals with finding the proper values of individual
securities like stocks/bonds
Portfolio Theory (investment) - correct answer ✔✔deals with the best way to structure portfolios, or
"baskets," of stocks and bonds
Market Analysis (investment) - correct answer ✔✔deals with whether stock/bond markets are too
high/low/just right
Areas of Finance - correct answer ✔✔1. Financial Management
2. Capital Markets
,3. Investments
Financial Institution - correct answer ✔✔Supply Capital to Businesses
Banks, investment banks, stockbrokers, mutual funds, insurance companies —> bring together the
"savers" who have money to invest and businesses, individuals, others that need capital for various
purposes
International Finance - correct answer ✔✔the use of finance theory in a global business environment
Personal Finance - correct answer ✔✔All the money decisions a person or family makes including
earning, budgeting, saving, spending, and planning for the future
Public Finance (government) - correct answer ✔✔Government organizations such as the Federal Reserve
(regulates banks and controls the supply of money)
Securities and Exchange Commission (SEC) (regulates the trading of stocks and bonds)
Responsibilities of Financial Manager - correct answer ✔✔Capital Structure
Raising Capital
Capital Budgeting
Working Capital Management
Profitability
Capital Structure - correct answer ✔✔much debt and how much equity in the company
Raising Capital - correct answer ✔✔raising money from lenders or investors to finance the company
Capital Budgeting - correct answer ✔✔deciding which long term assets to invest in
, Working Capital Management - correct answer ✔✔the managing of short-term assets and liabilities
managing the level of cash, AR, inv., and AP
Profitability - correct answer ✔✔earning enough profit to satisfy lenders and investors
Agency Relationship - correct answer ✔✔The potential conflict between the desires of management and
the desires of the shareholders.
Sole Proprietorship - correct answer ✔✔Advantages:
They are easy and inexpensive to form
Subject to few government regulations
Subject to lower income taxes than corporations
Disadvantages:
Unlimited personal liability (debt/investments/legality)
Life of business same as creators life-span
Difficulty obtaining target amounts of capital (usually small business)
Partnerships - correct answer ✔✔2+ Individuals
Advantages:
They are easy and relatively inexpensive to form
Avoid the corporate income tax
Disadvantages
All persons are unlimited personal liability (debt/investments/legality)
Difficulty obtaining target amounts of capital (usually small business)
Corporation - correct answer ✔✔More than 80% of businesses // legal entity —> distinct from owners
and managers // unlimited lives
Advantages:
answered already passed
Corporate Finance - correct answer ✔✔the financial management of assets and corporate financing
decisions
same principles for nonprofit and for-profit
Capital Markets - correct answer ✔✔markets that exist where businesses are able to finance operations
as well as large purchases over long periods of time
interest rates, stock/bond prices
Investments - correct answer ✔✔relate to decisions concerning stocks and bonds and include a number
of activities
- security analysis, market analysis
Security Analysis (Investment) - correct answer ✔✔deals with finding the proper values of individual
securities like stocks/bonds
Portfolio Theory (investment) - correct answer ✔✔deals with the best way to structure portfolios, or
"baskets," of stocks and bonds
Market Analysis (investment) - correct answer ✔✔deals with whether stock/bond markets are too
high/low/just right
Areas of Finance - correct answer ✔✔1. Financial Management
2. Capital Markets
,3. Investments
Financial Institution - correct answer ✔✔Supply Capital to Businesses
Banks, investment banks, stockbrokers, mutual funds, insurance companies —> bring together the
"savers" who have money to invest and businesses, individuals, others that need capital for various
purposes
International Finance - correct answer ✔✔the use of finance theory in a global business environment
Personal Finance - correct answer ✔✔All the money decisions a person or family makes including
earning, budgeting, saving, spending, and planning for the future
Public Finance (government) - correct answer ✔✔Government organizations such as the Federal Reserve
(regulates banks and controls the supply of money)
Securities and Exchange Commission (SEC) (regulates the trading of stocks and bonds)
Responsibilities of Financial Manager - correct answer ✔✔Capital Structure
Raising Capital
Capital Budgeting
Working Capital Management
Profitability
Capital Structure - correct answer ✔✔much debt and how much equity in the company
Raising Capital - correct answer ✔✔raising money from lenders or investors to finance the company
Capital Budgeting - correct answer ✔✔deciding which long term assets to invest in
, Working Capital Management - correct answer ✔✔the managing of short-term assets and liabilities
managing the level of cash, AR, inv., and AP
Profitability - correct answer ✔✔earning enough profit to satisfy lenders and investors
Agency Relationship - correct answer ✔✔The potential conflict between the desires of management and
the desires of the shareholders.
Sole Proprietorship - correct answer ✔✔Advantages:
They are easy and inexpensive to form
Subject to few government regulations
Subject to lower income taxes than corporations
Disadvantages:
Unlimited personal liability (debt/investments/legality)
Life of business same as creators life-span
Difficulty obtaining target amounts of capital (usually small business)
Partnerships - correct answer ✔✔2+ Individuals
Advantages:
They are easy and relatively inexpensive to form
Avoid the corporate income tax
Disadvantages
All persons are unlimited personal liability (debt/investments/legality)
Difficulty obtaining target amounts of capital (usually small business)
Corporation - correct answer ✔✔More than 80% of businesses // legal entity —> distinct from owners
and managers // unlimited lives
Advantages:
