Finance module 1

A ________ is a business that is jointly owned by two or more individuals.

A partnership

________ is the name given to the processes surrounding recognition of the principal-agent problem and ways to align agents with the interests of the principals

Agency Theory

financial markets

forums where buyers and sellers of financial assets and commodities meet

Of the following activities, which is MOST likely to be an interaction between the financial manager and the information systems manager?

Developing a system, pay suppliers, and track inventory

where the financial asset is being traded from one individual to another and the proceeds do not go to the original issuer of the security, is said to take place in the ________ market.

Secondary

A ________ is a business that is owned entirely by an individual. A) sole proprietorship

Sole propiertorship

example of financial intermediaries

commercial bank, insurance company, investment bank

4 main areas of finance

corporate finance, investments, financial institutions and markets, international finance

options are bought and sold in...

derivatives

Of the following which group would be considered EXTERNAL PLAYERS of the firm?

the loan officers

The means by which a company is financed refers to the firm's ________.

Capital Structure

________ is the typical title of the corporate executive charged with determining the best repayment structure for borrowed funds to ensure timely repayment and sufficient cash for daily operations.

Chief Financial Officer

________ is simply the interest earned in subsequent periods on the interest earned in prior periods.

Compound interest

Area of finance concerned with repayment of borrowed funds through dividends or interest payments

Corporate finance

The ________ removed the last segments of Federal law that separated investment banking activities from commercial banking activities.

Gramm-Leach-Bliley Act

Capital structure is best defined by which of the following questions?

How will we finance our product and service

When there are conflicts among managerial goals in U.S. markets, the most important priority is to ________.

Increase the current market value in equity

Function of Financial Intermediaries

Move money from lenders to borrows and back

The form of business organization in the United States that has the greatest amount of capital is ___

Publicly traded coorperation

Which of the following compensation packages is likely to work best for executive managers?

Stock Options

Not a function of financial intermediaries

To bear the risk that the lender will not pay