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D076 Finance Skills for Managers > Unit 2 > Flashcards

Unit 2 Flashcards

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1
Q

The study of managing and allocating funds at the personal or business level

A

Finance

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2
Q

o Forward looking or primarily focused on the future.
o Management and allocation of capital with the objective of investing forecasting budgeting, saving, borrowing, lending and so on.
o Uses accounting information to achieve these objectives.

A

Finance

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3
Q

The system of recording, reporting, and summarizing past financial information and transactions.
o Backward looking and focuses on the past.

A

Accounting

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4
Q

A financial asset that can be used by a firm or individual.
Ex. machinery or cash held by a firm.

A

Capital

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5
Q

An area of finance that deals with sources of funding, the capital structure of corporations, the actions that managers take to increase the value of the firm to its owners, and the tools and analysis used to allocate financial recourses.

A

Business finance

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6
Q

The mixture of debt and equity used to finance a firm.

A

Capital structure

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7
Q

An area of finance that involves deciding which assets to invest in to create wealth in the future.

A

Investments

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8
Q

The process of valuing assets.

A

Asset Pricing

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9
Q

What someone would pay right now for an asset.

A

Current Market Value

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10
Q

An area of finance that involves activities used to increase shareholder wealth.

A

Corporate finance

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11
Q

An area of finance that includes firms or organizations that exist to accept a wide variety of deposits, to offer investment products to individuals and businesses, to provide loans, or to broker financial transactions.

A

Financial Institutions

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12
Q

The total satisfaction received from consuming goods and services; the happiness you gain from your decisions as a consumer

A

Utility

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13
Q

Shares of ownership; stocks

A

Equity

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14
Q

Firms that have issued shares to the public

A

Publicly Traded Firms

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15
Q

Firms that have not issued shares to the public where the ownership rights are privately held.

A

Private held companies

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16
Q

Managing the day-to-day finance operations of a firm.

A

Cash Management

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17
Q

Methods used to minimize the amount of taxes a business pays

A

Tax Strategies

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18
Q

Incorporating new finance ideas within a firm.

A

Financial Policy Implementation

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19
Q

A financial institution that invests in an entity that is not publicly listed or traded using money received from institutional investors and wealthy individuals; Firms that are privately held and whose ownership is not yet bought or sold on any public stock exchange.

A

Private Equity

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20
Q

Professional managers of investment capital that typically invest in very young new ventures.

A

Venture Capitalists (VCs)

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21
Q

generating cash or stock from the sales or IPO of companies in the portfolio of investments.

A

Harvest

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22
Q

financial institution that accepts deposits, offers checking and savings accounts, and other basic financial products; extends various loans.

A

Commercial Banking

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23
Q

An entry-level commercial bank position with the responsibility to interact with customers at the bank’s front desk or drive-through window.

A

Teller

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24
Q

A commercial bank position with the responsibility to assess the riskiness of lending to borrowers and determining whether or not loans should be extended to potential bank clients.

A

Credit Analysts

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25
Q

A commercial bank position with the responsibility to find and attract new clients

A

Personal Bankers

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26
Q

An arrangement that allows a third party to hold assets on behalf of a beneficiary or beneficiaries

A

Trusts

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27
Q

Everything that a person owns or controls, especially at death.

A

Estates

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28
Q

A legal expression of an individual’s wishes concerning the deposition of his or her property after death.

A

Wills

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29
Q

The ability to turn financial securities into cash easily without losing significant value

A

Liquidity

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30
Q

A debt instrument (bond) that is issued by the United States government in order to raise capital

A

Treasury Securities

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31
Q

The top line of the income statement. The total amount of money a business brings in (before subtracting any costs)

A

Revenues

32
Q

A debt instrument that is issued by a corporation in order to raise capital.

A

Corporate Bonds

33
Q

A share of ownership in a company

A

Stock

34
Q

A type of financial market used for short-term assets that are held for less than one year

A

Money Market

35
Q

A type of financial market used for long-term assets that are held for greater than one year.

A

Capital Markets

36
Q

The financial market where securities (stocks and/or bonds) are first sold

A

Primary Market

37
Q

A group of intermediaries that is used to oversee the issuance of stocks and/ or bonds

A

Syndicate

38
Q

When a privately held company first offers shares of stock to outside investors to raise capital, therefore becoming a publicly owned company; aka equity offerings

A

Initial Public Offering (IPO)

39
Q

Where securities are traded after initial issuance.

A

Secondary Financial Market

40
Q

A secondary market with a physical location and where prices are determined by investors’ willingness to pay.

A

Auction Market

41
Q

A secondary market made up of multiple dealers that hold an inventory of securities and quote prices.

A

Dealer Market

42
Q

A market maker on the NYSE that holds an inventory of securities and acts as liquidity provider to those that wish to buy and sell

A

Specialist

43
Q

The possibility that the realized or actual return will differ from the expected return

A

Risk

44
Q

The difference between the bid and ask prices that compensate the specialist for the risk that he or she bears for willingness to provide liquidity.

A

Bid-ask Spread

45
Q

An independent federal government agency that (1) protects investors, (2) maintains fair, orderly, and efficient markets, and (3) facilitates capital formation.

A

U.S. Securities and Exchange Commission (SEC)

46
Q

Financial institution that accepts monetary deposits and provides loans. Includes savings banks, commercial banks, savings and loan associations, and credit unions.

A

Depository institution

47
Q

A type of depository institution also known as a “thrift” institution that places a significant focus on providing loans for residential mortgages and real estate.

A

Savings and loans association

48
Q

Financial institution that is not allowed to accept monetary deposits but may perform functions such as lending money or acting as an intermediary between savers and lenders. Examples include brokerage firms, investment firms, mutual funds, and hedge funds.

A

Non-depository institution

49
Q

Financial institution that facilitates the investment and purchase of securities in financial markets. Common services include underwriting, trading of securities on secondary markets, and the general sale of securities.

A

Securities firm

50
Q

Company that invests the capital of investors in financial securities. Examples include mutual funds and investment trusts. The company may also be involved in issuing securities.

A

Investment firm

51
Q

Financial intermediary that raises capital for long-term contractual agreements. Examples include an insurance company or a private pension fund.

A

Contractual savings institution

52
Q

A financial institution that specializes in managing and administering retirement funds,

A

Pension Fund

53
Q

Ensure that a nation’s economy remains healthy by controlling the amount of money circulating in the economy.

A

Central Banks

54
Q

An investment company that continually offers investments and buys financial securities and instruments on behalf of investors.

A

Mutual Fund

55
Q

A financial intermediary that offers complex financial transactions such as underwriting, facilitating mergers, and buying and selling financial securities on behalf of large institutions.

A

Investment Bank

56
Q

Charge Premiums to invest in bonds and stocks to pay claims

A

Insurance Companies

57
Q

Receive deposits and extend loans to individuals and businesses.

A

Banks and Credit Unions

58
Q

Indicators that usually change before the economy changes.

A

Leading indicators

59
Q

Indicators that change after the economy changes.

A

Lagging indicators

60
Q

Indicators that are collected used and analyzed as economic shifts happen.

A

Coincident Indicators

61
Q

Following accepted standards of moral conduct.

A

Ethics

62
Q

Following one’s standards of right and wrong behavior

A

Morals

63
Q

Costs that are incurred when management does not act in the best interest of shareholders.

A

Agency Costs

64
Q

When the agent (the management) does not act in the best interest of the principal (the owners).

A

Agency Problem

65
Q

The business function responsible for generating sales.

A

Marketing

66
Q

The top line of the income statement. The total amount of money a business brings in (before substracting out any costs).

A

Sales

67
Q

A physical trading floor and a computer network where stocks are bought and sold. It is the largest stock exchange in the world

A

New York Stock Exchange (NYSE)

68
Q

A market in which prices fully reflect all the available information about a specific security.

A

Efficient Market

69
Q

A hypothesized estimate of future prices or returns under different scenarios based on expectational data.

A

Expected Return

70
Q

A person who makes strategic financial decisions in a corporation

A

Financial Managers

71
Q

Following the laws and rules set by an authority

A

Legal

72
Q

A computer network where stocks are bought and sold. It is the second-largest stock exchange in the world. Typically, technology- related companies will go public through this exchange.

A

NASDAQ

73
Q

The business function responsible for improving and developing services and products

A

Research and Development

74
Q

The process of combining several types of contractual debt (such as mortgages) and reselling them as a package to investors

A

Securitization

75
Q

A person who owns shares of a company’s stock

A

Shareholders

76
Q

Anyone who maybe affected by actions taken or a decision made

A

Stakeholder

D076 Finance Skills for Managers (7 decks)

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