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chapter 10 > chapter 15 > Flashcards

chapter 15 Flashcards

1
Q

responsible for planning and overseeing the financial resources of a firm

A

financial manager

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2
Q

managing the pattern of cash inflows (revenues) and outflows (debt payments)

A

cash-flow management

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3
Q

checking performance against strategic plans, making adjustments, preparing budgets to ensure that sufficient cash is on hand to meet operational and debt-service needs

A

financial control

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4
Q

a plan to achieve a desired financial status

A

financial planning

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5
Q

accounts payable, accounts receivable, invetory

A

short-term operating expenses

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6
Q

inventories + (accounts receivable - account payable)

A

working capital

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7
Q

funding fixed assets that have a long life and a lasting value: lands, buildings, machinery

A

long-term capital expenditures

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8
Q

allows firms to cover operational expenses and implement short-term plans

A

short-term funds

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9
Q

the granting of credit by a selling firm to a buying firm

A

trade credit

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10
Q

ship now and pay after

A

open-book credit

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11
Q

sign agreement and then ship

A

promissory note

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12
Q

signed statement of payment terms attached

A

trade draft

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13
Q

the borrower is required to put up collateral

A

secured short-term loans

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14
Q

banks do not ensure that the funds will always be available as needed

A

line of credit

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15
Q

banks guarantee availability of the funds

A

revolving credit agreements

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16
Q

a firm sells unsecured notes for less than their face value. then repurchases them in 30-72 days for the face value

A

commercial paper

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17
Q

borrowing money for 3-10 years at a fixed or floating rate

A

long-term loans

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18
Q

a promise by the borrower to pay the lender an amount of money on the maturity date

A

corporate bonds

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19
Q

assets are pledged as security for the bond

A

secured bonds

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20
Q

not backed by any security and only sold financially by strong corporations that carry lower risk for investors

A

unsecured bonds

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21
Q

certificates are only of value to registered holders

A

registered bonds

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22
Q

holders clip coupons from the bond to receive interest payments- anyone with the coupon can redeem it

A

bearer bonds

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23
Q

may be called at anytime or after a minimum period of time, and paid off for a specified call price

A

callable bonds

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24
Q

redemption rates are staggered so that the bond is paid off gradually ove time

A

serial bonds

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25
Q

option of receiving common stock instead of cash

A

convertible bonds

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26
Q

a firm sells ownership rights by issuing shares

A

common stock

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27
Q

financing by retaining profits in the firm and not paying dividends to shareholders

A

retained earnings

28
Q

current price of a share on the secondary securities market

A

market value

29
Q

shareholders’ equity divided by the number of shares outstanding

A

book value

30
Q

arbitrary value set by the company’s board of directors and stated on stock certificates

A

par value

31
Q

require fixed payments, as do bonds

A

preferred shares

32
Q

the mix of debt vs equity

A

capital structure

33
Q

sale and purchase of newly issued stocks or bonds

A

primary securities market

34
Q

sale and purchase of previously issued stocks and bonds

A

secondary securities market

35
Q

financial specialists who issue new securities

A

investment bankers

36
Q

organizations that provide a setting for members to buy and sell stock in accordance with the rules of the exchange

A

stock exchanges

37
Q

individuals licenses to buy and sell securities for customers in the secondary market

A

stockbrockers

38
Q

the largest exchange in Canada with 110 members

A

Toronto stock exchange

39
Q

numerous dealers who trade among themselves for smaller firms and those not listed on exchanges

A

the over-the-counter market

40
Q

the worlds first electronic stock market

A

national association of securities dealers automated quotation

41
Q

summarize trends in the stock market and specific industries

A

market indexes

42
Q

a period of falling stock prices

A

bear market

43
Q

a period of rising stock prices

A

bull market

44
Q

an order to a broker to buy or sell a certain security at the current market price

A

market order

45
Q

an order to a broker to buy a certain security only if its price is less than or equal to a given limit

A

limit order

46
Q

an order to a broker to sell a certain security if its price falls to a certain level or below

A

stop order

47
Q

the purchase or sale of sock in units of 100 shares

A

round lot

48
Q

the purchase or sale of stock in units of other than 100 shares

A

odd lot

49
Q

investor makes a down payment on a portion of the price with the rest financed by the broker

A

margin trading

50
Q

a invester “borrows” shares from the broker and sells them

A

short sale

51
Q

a company that pools the resources of many investors and uses funds to purchase various types of securities

A

mutual fund

52
Q

a bundle of stock and/ or bonds that is in an index tracking the overall movement of a market

A

exchange- traded fund

53
Q

private pools of money that try to give positive returns, regardless of stock-market performance

A

hedge funds

54
Q

undifferentiated products

A

commodities

55
Q

the purchased right to buy a particular stock at a certain price until a specified date

A

call option

56
Q

the purchases right to sell a particular stock at a certain price until a specified date

A

put option

57
Q

laws regulating how firms back up securities

A

blue-sky-law

58
Q

detailed registration statement about a new stock filed with a provincial securities exchange

A

prospectus

59
Q

conserving a firms financial power or assets by minimizing the financial effect of accidental losses

A

risk management

60
Q

uncertainty about future events

A

risk

61
Q

the chance for gain or loss

A

speculative risk

62
Q

only the change of loss

A

pure risk

63
Q

transfer a risk to another individual or firm via contract

A

risk transfer

64
Q

prevent, reduce or minimize losses

A

risk control

65
Q

cover losses with its own funds

A

risk retention

chapter 10 (6 decks)

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