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Business Finance > Quiz 1 > Flashcards

Quiz 1 Flashcards

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1
Q

A study of how individuals or Businesses evaluate:
- Investment opportunities
- Business proposals
- Business projects
-Raise capital for funds

A

What is Finance

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2
Q

A science and art of managing money

A

Finance

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3
Q
  • Record keeping/Bookkeeping
  • Preparation for financial Statements
  • Backward-looking
  • Communicating the financial position
A

Accounting

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4
Q
  • Management of money, fund, and resources
  • Review, analyze or interpret financial data
  • Forward-looking
  • Figuring out how to add value
A

Finance

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5
Q
  • Tax Systems
  • Government Expenditures
  • Budget Procedures
  • Stabilization procedures]
  • Instruments
  • Debt Issues
A

Public finance

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6
Q
  • Managing Assets
  • Liabilities
  • Revenues
  • Debts for the Business
A

Corporate Finance

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7
Q
  • Budgeting
  • Insurance
  • Revenues
  • Debts for Business
A

Personal Finance

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8
Q

The efficient and effective management of funds

A

Financial Management

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9
Q

Organizations that provide financial services
- Credit fund
- administration
- Financing Depository
- Safekeeping among others

A

Financial Institutions

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10
Q
  • Savings and loan Association (S&L)
  • Specializes in offering savings accounts
  • Originating home mortgages
A

Thrift bank (bank)

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11
Q
  • Financial Institutions that accept deposits
  • Accepts deposits
  • Offers Checking account
  • make various loans
  • Offers basic finance products
A

Commercial banks (Bank)

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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)

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13
Q
  • Known to successfully raise funds for big corporations and governments
  • raises funds in a specialized creative manner
A

Investment Banks (Bank)

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14
Q
  • Collective investments
  • Funds of small investors pooled together
  • Managed to be able to reach maximum returns
A

Mutual Funds (Non-bank)

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15
Q
  • regulated by SEC
  • Perform similar functions as banks through bond issuance and IPO
A

Investment companies (Non-bank)

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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)

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17
Q
  • Not regulated by any regulatory body
  • regulated by private fund managers and private investors
A

Private Equity Funds (Non-Bank)

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18
Q

Responsible for controlling or administrating all or part of a company or similar organization

A

Manager

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19
Q
  • ensures the financial success of companies
  • manages their money and financial risks
A

Treasurer

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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

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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
Q

Debt Security
- Payment terms are longer
- Interest rates are higher

A

Long term Debt

26
Q

Equity Financing
- Signifies ownership in a corporation
- Represents a claim on a part of the corporation’s assets and earnings

A

Stock Market

27
Q

( A type of debt security)
- Issued by the treasury government
- Matures within one year
- Default free

A

Treasury Bills

28
Q

( A type of debt security)
- Issued by a financially sound business to fund investment
- 9-month maturity
- Low default risk

A

Comercial Papers

29
Q
  • Issued by banks or mutual fund company
  • No specific maturity date
  • Low default risks
A

Money Market Funds

30
Q

( A type of debt security)
- Issued by banks, credit unions, and financing companies
- Maturity date varies
- Default risk varies

A

Consumer Credit, Credit Card

31
Q

( 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

A

Treasury Notes

32
Q

( A type of debt security) (Long-Term Debt)
- Issued by the federal Agency Debt
- Matures up to 30 years
- Low default risk

A

Federal Agency Debt

33
Q

( A type of debt security) (Long-Term Debt)
- Issued by corporations
- Maturity date of more than 30 years
- Medium Default risk

A

Corporate Bonds

34
Q

(Equity Financing)
- Issued by the corporation and no maturity date
- Pays dividends but no voting rights
has preference over common stock

A

Preferred Stocks

35
Q

( Equity Financing)
- Issued by the government and pays dividends
- Has voting rights on the selection of BOD
- enjoy potential profits from capital appreciation

A

Common Stock

36
Q

A marketplace that provides an avenue for the sale and purchase of assets
- Bonds
- Stocks
- Purchase exchange
- Derivatives

A

Financial Markets

37
Q

Types of Financial Market
- Wheat, vehicle, machinery, real estate, etc…

A

Tangible Assets

38
Q

Types of Financial Market
Deal with Stocks, Bonds, Notes and mortgages

A

Financial Assets

39
Q

Types of Financial Market
- Assets are bought or sold on the spot
- “On-the-spot” delivery

A

Spot Markets

40
Q

Types of Financial Market
- Participants agree today to buy or sell assets at a future date

A

Future Markets

41
Q

Types of Financial Market
- Corporations raise capital by issuing new securities

A

Primary Market

42
Q

Types of Financial Market
- Securities and other financial assets are traded among investors
- Issued by Corporations

A

Secondary Markets

43
Q

Types of Financial Market
- Transactions are worked out directly between two parties

A

Private Markets

44
Q

Type of Financial Markets
- Standardized contracts are traded on organized exchanges

A

Public Markets

45
Q
  • 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
A

Roles of Board of Directors

46
Q

-Determining top management’s compensation
Approving information
- Approving disclosures reported in Financial Statements

A

Roles of Board of Directions

47
Q

(Types of Financial Decisions)
- Determine how scarce or limited resources of funds of the business firm are committed to projects

A

Making Investment Decisions

48
Q

(Types of Financial Decisions)
- Assets mixed with debts and equity chose to finance investment should maximize the value of an investment

A

Making Financing Decisions

49
Q

(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

A

Making Dividends Decisions

50
Q
  • Decisions that involve determining and planning short-term objective
  • Goals concerning routine tasks
A

Making Operating Decisions

Business Finance (1 decks)

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