Finance - 3312 Lesseig Exam 1 Questions And
Answers 100% Pass
Goal of the Firm - ANSWER to maximize the value of the firm
Agency Problem - ANSWER -managers not acting in best interest of the firm
-owners & managers separate
-possibly prevent by having stock based compensation
Types of Financial Markets - ANSWER Primary- from issuer, issuer gets $
Secondary- trade between investors
Spot- now
Future- future
Money- short term securities
Capital- long term securities
Public- anybody
Private- few, limited
Risk & Return - ANSWER The higher the risk, the higher the return
Cash flow vs. Income - ANSWER Cash flow = difference between number of dollars that came
in & the number that went out
Answers 100% Pass
Goal of the Firm - ANSWER to maximize the value of the firm
Agency Problem - ANSWER -managers not acting in best interest of the firm
-owners & managers separate
-possibly prevent by having stock based compensation
Types of Financial Markets - ANSWER Primary- from issuer, issuer gets $
Secondary- trade between investors
Spot- now
Future- future
Money- short term securities
Capital- long term securities
Public- anybody
Private- few, limited
Risk & Return - ANSWER The higher the risk, the higher the return
Cash flow vs. Income - ANSWER Cash flow = difference between number of dollars that came
in & the number that went out
