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BUSINESS FINANCE EXAM LATEST VERSION -2025/2026- 100+
QUESTIONS AND VERIFIED ANSWERS ALL THE BEST
Finance public projects and manage fiscal policies
Corporations issue bonds to
Raise funds for operations and growth
Market Capitalization
number of shares x price per share
____ stocks offer the potential for higher returns but come with a greater risk.
Common
Characteristics of Preferred Stock
Hybrid security, stockholders have a higher claim to assets, safer investment,
generally no voting rights, may carry special voting rights under circumstances
____ represents ownership with voting rights and variable dividends.
Common stock
coupon rate of a bond
the interest rate that the bond issuer has agreed to pay the bondholder
Governments issue bonds to
AAA rated bonds are the ____ risky and has the lowest yield
Least
Corporate Bonds
Bonds issued by companies to fund operating expenses and business activities,
typically risky, usually 6 month coupons to pay interest. If not paid at maturity, can
force bankruptcy
, 2
Two types of Public bonds
Municipal (munis) and treasury
Municipal bond
a bond issued by a state or local government or municipality to finance such
improvements as highways, state buildings, libraries, parks, and schools
Treasury bonds
Digitally issued by the federal government (usually to companies). Low risk, most
stable in world
How do companies raise capital through debt and equity financing?
Issue bonds (debt financing, must be paid back with interest) or sell stock (equity
financing, doesn't require repayment)
financial derivatives
Financial assets that derive their value based on an underlying asset. Examples are
options and futures.
Options
financial derivatives that give buyers the right, but not the obligation, to buy or
sell an underlying asset at an agreed-upon price (strike price) and date
Futures
contracts to buy or sell at a specific date in the future at a price specified today
Three main financial instruments
Stocks, bonds and financial derivatives
Investment funds
Collect money from multiple individuals and companies and pool it together to
invest in diversified portfolios of assets (stocks, bonds, other securities)
Benefits of investment funds
BUSINESS FINANCE EXAM LATEST VERSION -2025/2026- 100+
QUESTIONS AND VERIFIED ANSWERS ALL THE BEST
Finance public projects and manage fiscal policies
Corporations issue bonds to
Raise funds for operations and growth
Market Capitalization
number of shares x price per share
____ stocks offer the potential for higher returns but come with a greater risk.
Common
Characteristics of Preferred Stock
Hybrid security, stockholders have a higher claim to assets, safer investment,
generally no voting rights, may carry special voting rights under circumstances
____ represents ownership with voting rights and variable dividends.
Common stock
coupon rate of a bond
the interest rate that the bond issuer has agreed to pay the bondholder
Governments issue bonds to
AAA rated bonds are the ____ risky and has the lowest yield
Least
Corporate Bonds
Bonds issued by companies to fund operating expenses and business activities,
typically risky, usually 6 month coupons to pay interest. If not paid at maturity, can
force bankruptcy
, 2
Two types of Public bonds
Municipal (munis) and treasury
Municipal bond
a bond issued by a state or local government or municipality to finance such
improvements as highways, state buildings, libraries, parks, and schools
Treasury bonds
Digitally issued by the federal government (usually to companies). Low risk, most
stable in world
How do companies raise capital through debt and equity financing?
Issue bonds (debt financing, must be paid back with interest) or sell stock (equity
financing, doesn't require repayment)
financial derivatives
Financial assets that derive their value based on an underlying asset. Examples are
options and futures.
Options
financial derivatives that give buyers the right, but not the obligation, to buy or
sell an underlying asset at an agreed-upon price (strike price) and date
Futures
contracts to buy or sell at a specific date in the future at a price specified today
Three main financial instruments
Stocks, bonds and financial derivatives
Investment funds
Collect money from multiple individuals and companies and pool it together to
invest in diversified portfolios of assets (stocks, bonds, other securities)
Benefits of investment funds
