Basic Concepts Flashcards
A business owned and operated by one person who assumes all risks and profits
Sole Proprietorship
A business structure where two or more individuals share ownership, responsibilities, and liabilities.
Partnership
A legally separate entity from its owners, offering limited liability and the ability to raise capital.
Corporation
The function in an organization responsible for managing financial activities like capital investment and risk management.
Managerial Finance Function
A company that operates in multiple countries and engages in international business transactions.
Multinational Corporation (MNC)
The system that establishes rules for international trade, investment, and exchange rate policies.
International Monetary System
A financial institution that promotes economic stability, reduces trade restrictions, and prevents financial crises.
International Monetary Fund (IMF)
A global financial organization that provides loans and grants to developing countries to support economic development.
World Bank
A government institution responsible for controlling a nation’s money supply, interest rates, and inflation.
Central Bank
The rate at which banks can borrow money from the central bank.
Discount Rate
The financial tool where central banks buy or sell government securities to influence money supply.
Open Market Operations
A firm’s decision-making process about investments, risk management, and capital allocation.
Capital Budgeting
The process of securing stable input supply by investing in raw materials sources.
Vertically Integrated Investment
The economic strategy where a company expands operations beyond its home country.
Global Expansion
The act of reducing a company’s reliance on one market by investing in multiple regions.
Diversification of Risk
