Quiz 1 Flashcards
(50 cards)
1
Q
A study of how individuals or Businesses evaluate:
- Investment opportunities
- Business proposals
- Business projects
-Raise capital for funds
A
What is Finance
2
Q
A science and art of managing money
A
Finance
3
Q
- Record keeping/Bookkeeping
- Preparation for financial Statements
- Backward-looking
- Communicating the financial position
A
Accounting
4
Q
- Management of money, fund, and resources
- Review, analyze or interpret financial data
- Forward-looking
- Figuring out how to add value
A
Finance
5
Q
- Tax Systems
- Government Expenditures
- Budget Procedures
- Stabilization procedures]
- Instruments
- Debt Issues
A
Public finance
6
Q
- Managing Assets
- Liabilities
- Revenues
- Debts for the Business
A
Corporate Finance
7
Q
- Budgeting
- Insurance
- Revenues
- Debts for Business
A
Personal Finance
8
Q
The efficient and effective management of funds
A
Financial Management
9
Q
Organizations that provide financial services
- Credit fund
- administration
- Financing Depository
- Safekeeping among others
A
Financial Institutions
10
Q
- Savings and loan Association (S&L)
- Specializes in offering savings accounts
- Originating home mortgages
A
Thrift bank (bank)
11
Q
- Financial Institutions that accept deposits
- Accepts deposits
- Offers Checking account
- make various loans
- Offers basic finance products
A
Commercial banks (Bank)
12
Q
-Lends to multinational companies
- Lends to companies that have a global presence
- Transactions are larger than commercial banks
- Denominated multicurrency
A
Universal bank (BANK)
13
Q
- Known to successfully raise funds for big corporations and governments
- raises funds in a specialized creative manner
A
Investment Banks (Bank)
14
Q
- Collective investments
- Funds of small investors pooled together
- Managed to be able to reach maximum returns
A
Mutual Funds (Non-bank)
15
Q
- regulated by SEC
- Perform similar functions as banks through bond issuance and IPO
A
Investment companies (Non-bank)
16
Q
- Companies that sell insurance, coverage for death, illness, accident, loss or damage of property
- In return of premium payment
A
Insurance Companies (Non-Bank)
17
Q
- Not regulated by any regulatory body
- regulated by private fund managers and private investors
A
Private Equity Funds (Non-Bank)
18
Q
Responsible for controlling or administrating all or part of a company or similar organization
A
Manager
19
Q
- ensures the financial success of companies
- manages their money and financial risks
A
Treasurer
20
Q
- Monetary Assets are purchased with the idea that the asset will price income
- Assets bought will be sold at a higher price for profit
A
Investment
21
Q
- Distribution of some of the companies earnings to its shareholders
- Determined by the company’s BOD
A
Dividend
22
Q
A real or a virtual document representing a legal agreement
A
Financial Instrument
23
Q
- Involves any kind of monetary value
- a contract that gives rise to the creation of financial assets of one entity
- Creation of financial liability or an equity instrument in another entity
A
Financial Instrument
24
Q
Debt Security:
Inexpensive way for government and financial institutions to raise funds
A
Money Market
25
Debt Security
- Payment terms are longer
- Interest rates are higher
Long term Debt
26
Equity Financing
- Signifies ownership in a corporation
- Represents a claim on a part of the corporation's assets and earnings
Stock Market
27
( A type of debt security)
- Issued by the treasury government
- Matures within one year
- Default free
Treasury Bills
28
( A type of debt security)
- Issued by a financially sound business to fund investment
- 9-month maturity
- Low default risk
Comercial Papers
29
- Issued by banks or mutual fund company
- No specific maturity date
- Low default risks
Money Market Funds
30
( A type of debt security)
- Issued by banks, credit unions, and financing companies
- Maturity date varies
- Default risk varies
Consumer Credit, Credit Card
31
( A type of debt security) (Long-term Debt)
- Issued by governments and no defaults
- two or more years of maturity
- less attractive due to low interest
Treasury Notes
32
( A type of debt security) (Long-Term Debt)
- Issued by the federal Agency Debt
- Matures up to 30 years
- Low default risk
Federal Agency Debt
33
( A type of debt security) (Long-Term Debt)
- Issued by corporations
- Maturity date of more than 30 years
- Medium Default risk
Corporate Bonds
34
(Equity Financing)
- Issued by the corporation and no maturity date
- Pays dividends but no voting rights
has preference over common stock
Preferred Stocks
35
( Equity Financing)
- Issued by the government and pays dividends
- Has voting rights on the selection of BOD
- enjoy potential profits from capital appreciation
Common Stock
36
A marketplace that provides an avenue for the sale and purchase of assets
- Bonds
- Stocks
- Purchase exchange
- Derivatives
Financial Markets
37
Types of Financial Market
- Wheat, vehicle, machinery, real estate, etc...
Tangible Assets
38
Types of Financial Market
Deal with Stocks, Bonds, Notes and mortgages
Financial Assets
39
Types of Financial Market
- Assets are bought or sold on the spot
- "On-the-spot" delivery
Spot Markets
40
Types of Financial Market
- Participants agree today to buy or sell assets at a future date
Future Markets
41
Types of Financial Market
- Corporations raise capital by issuing new securities
Primary Market
42
Types of Financial Market
- Securities and other financial assets are traded among investors
- Issued by Corporations
Secondary Markets
43
Types of Financial Market
- Transactions are worked out directly between two parties
Private Markets
44
Type of Financial Markets
- Standardized contracts are traded on organized exchanges
Public Markets
45
- Setting Policies on investment, capital structure, and dividends
- Approving the company's strategies goals and budgets
- Appointing and removing members of top management, including the president
Roles of Board of Directors
46
-Determining top management's compensation
Approving information
- Approving disclosures reported in Financial Statements
Roles of Board of Directions
47
(Types of Financial Decisions)
- Determine how scarce or limited resources of funds of the business firm are committed to projects
Making Investment Decisions
48
(Types of Financial Decisions)
- Assets mixed with debts and equity chose to finance investment should maximize the value of an investment
Making Financing Decisions
49
(Types of Financial Decisions)
- Determine the profits to be distributed to the owners
-Determine the frequency of the payments
- determine the amount to be retained by the firm
Making Dividends Decisions
50
- Decisions that involve determining and planning short-term objective
- Goals concerning routine tasks
Making Operating Decisions
