The primary goal of the financial manager of a profit-seeking organization should be to:
maximize the owner's wealth
Finance has its origins in:
accounting and economics
Finance is:
the study of how individuals, institutions, governments, and businesses acquire, spend, and manage money and other financial assets
Crucial elements of the three areas of finance include:
- financial institutions
- financial markets
- investments and financial management
An area of finance that involves the sale or marketing of securities, the analysis of securities, and the management of investment risk through portfolio diversification is referred to as:
investments
The issuing of new securities, mortgages, and other claims to wealth takes place in the:
primary market
Select ALL of the following statements that an effective financial system must have:
- several sets of policy makers who pass laws and make decisions relating to fiscal and monetary
policies
- an efficient monetary system for creating and transferring money
- financial markets that facilitate the transfer of financial assets amongst indiv
An area of finance that refers to the physical locations or electronic forums that facilitate the flow of funds among investors, businesses, and governments is called:
financial markets
An area of finance that involves financial planning, asset management and fund-raising decisions to enhance the value of businesses is called:
financial management
An area of finance that involves the study of organizations or intermediaries that help the financial system operate efficiently and transfer funds from savers and investors to individuals, businesses, and governments that seek to spend or invest the fund
financial institutions
An area of finance that involves the study of government institutions and their involvement in rescuing private firms is called:
none of the above, it's not an area of finance
The ______________ is a term used to describe the financial system, institutions, markets, businesses, individuals, and global interactions that help the economy operate efficiently
financial environment
The primary securities markets are
the markets where financial assets such as stocks and bonds are initially issued
Finance has its origins in:
economics and accounting
Economists use a ___________________ framework to explain how the prices and quantities of goods and services are determined in a free-market economic system.
supply and demand
____________________ provide the record-keeping mechanism for showing ownership of the financial instruments used in the flow of financial funds between savers and borrowers and record revenues, expenses, and profitability of organizations that produce an
accountants
_________________________________________ are crucial elements of the three areas of finance.
financial institutions, financial markets, investments, and financial management
___________________ are intermediaries, such as banks, insurance companies, and investment companies that engage in financial activities to aid the flow of funds from savers to borrowers or investors.
financial institutions
____________________ in business involves making decisions relating to the efficient use of financial resources in the production and sale of goods and services.
financial management
Maximizing _____________________ is accomplished through effective financial planning and analysis, asset management, and the acquisition of financial capital.
the owner's wealth
Successful businesses typically progress through a series of life-cycle stages�from the idea stage to exiting the business; these five stages include the:
development stage, startup stage, survival stage, rapid growth stage, and maturity stage
_______________ is the study of how growth-driven, performance-focused, early-stage (from development through early rapid growth) firms raise financial capital and manage their operations and assets.
entrepreneurial finance
_______________ is the study of how individuals prepare for financial emergencies, protect against premature death and the loss of property, and accumulate wealth over time.
personal finance
Reasons we study finance include all of the following except:
to make informed medical decisions
Select ALL of the following are not among the six principles of finance:
- All decisions are ultimately financial decisions.
- Managers and stockholders objectives are always the same.
Which statement best describes the six principles of finance?
Money has a time value; Higher returns are expected for taking on more risk; Diversification of investments can reduce risk; Financial markets are efficient in pricing securities; Manager and stockholder objectives may differ; Reputation matters.
Select ALL of the following that an effective financial system needs:
- an efficient monetary system
- to be able to create capital by channeling savings into investment
- markets in which to buy and sell claims to wealth
Crucial elements of well-developed financial systems include all of the following except:
government control of the economy
Financial functions in the U.S. financial system include:
- transferring financial assets
- creating money
- accumulating savings
$1,000 invested today at 6% interest would be worth ________ one year from now (Choose the closest answer.)
$1,060
If the interest rate is greater than 0%, then a dollar today is worth
more than a dollar tomorrow
If the interest rate is equal to 0%, then a dollar today is worth
the same as a dollar tomorrow
A basic financial function of an effective financial system is a monetary system that performs which of the following?
transferring money
Rational investors would consider an investment in a risky business venture only if they feel the expected return is high enough to justify the
greater risk
Two risky assets can be combined to lower overall risk. This principle is commonly referred to as
diversification
In the United States, most money is created by:
depository institutions
Basic financial functions of an effective financial system include:
- creating money
- transferring money
- accumulating savings
The theory of ___________________ implies that information is quickly embedded in prices making it difficult for investors to "beat the market.
efficient markets
The basic components of an effective financial system in a developed economy include:
- a monetary system
- a savings-investment process
- markets for the transfer of financial assets
The possible conflict between managers and owners is sometimes called the
principal-agent problem
______________ behavior refers to how an individual or organization treats others legally, fairly, and honestly.
ethical
Career opportunities in finance involving both treasury and control functions are generally associated with:
business financial management
Intermediaries that help the financial system operate efficiently and transfer funds from savers and investors to individuals, businesses, and governments that seek to spend or invest the funds are known as:
financial institutions
An economy's _____________________ is the interaction of policy makers, a monetary system, financial institutions, and financial markets to expedite the flow of financial capital from savings into investment:
financial system
An efficient ______________ that is comprised of a central bank and a banking system that is able to create and transfer a stable medium of exchange called money.
monetary system
An effective financial system must have
- financial markets that facilitate the transfer of financial assets among individuals, institutions, businesses, and governments.
- financial institutions or intermediaries that support capital formation either by channeling savings into investment in ph
________________ facilitate the transfer of financial assets among individuals, institutions, businesses, and governments.
financial markets
The _________________ is primarily responsible for the amount of money that is created, although most of the money is actually created by depository institutions.
federal reserve system
Functions of the monetary system include all of the following except
accumulating savings
_________________ markets are where debt securities with maturities of one year or less are issued and traded.
money
_________________ markets are where debt instruments or securities with maturities longer than one year and corporate stocks or equity securities are issued and traded.
capital
_________________ markets are where the initial offering or origination of debt and equity securities takes place.
primary
_________________ markets are physical locations or electronic forums where debt (bonds and mortgages) and equity securities are traded.
secondary
The primary goal of the financial manager of a profit-seeking organization should be to:
maximize the owner's wealth
Finance has its origins in:
accounting and economics
Finance is:
the study of how individuals, institutions, governments, and businesses acquire, spend, and manage money and other financial assets
Crucial elements of the three areas of finance include:
- financial institutions
- financial markets
- investments and financial management
An area of finance that involves the sale or marketing of securities, the analysis of securities, and the management of investment risk through portfolio diversification is referred to as:
investments
The issuing of new securities, mortgages, and other claims to wealth takes place in the:
primary market
Select ALL of the following statements that an effective financial system must have:
- several sets of policy makers who pass laws and make decisions relating to fiscal and monetary
policies
- an efficient monetary system for creating and transferring money
- financial markets that facilitate the transfer of financial assets amongst indiv
An area of finance that refers to the physical locations or electronic forums that facilitate the flow of funds among investors, businesses, and governments is called:
financial markets
An area of finance that involves financial planning, asset management and fund-raising decisions to enhance the value of businesses is called:
financial management
An area of finance that involves the study of organizations or intermediaries that help the financial system operate efficiently and transfer funds from savers and investors to individuals, businesses, and governments that seek to spend or invest the fund
financial institutions
An area of finance that involves the study of government institutions and their involvement in rescuing private firms is called:
none of the above, it's not an area of finance
The ______________ is a term used to describe the financial system, institutions, markets, businesses, individuals, and global interactions that help the economy operate efficiently
financial environment
The primary securities markets are
the markets where financial assets such as stocks and bonds are initially issued
Finance has its origins in:
economics and accounting
Economists use a ___________________ framework to explain how the prices and quantities of goods and services are determined in a free-market economic system.
supply and demand
____________________ provide the record-keeping mechanism for showing ownership of the financial instruments used in the flow of financial funds between savers and borrowers and record revenues, expenses, and profitability of organizations that produce an
accountants
_________________________________________ are crucial elements of the three areas of finance.
financial institutions, financial markets, investments, and financial management
___________________ are intermediaries, such as banks, insurance companies, and investment companies that engage in financial activities to aid the flow of funds from savers to borrowers or investors.
financial institutions
____________________ in business involves making decisions relating to the efficient use of financial resources in the production and sale of goods and services.
financial management
Maximizing _____________________ is accomplished through effective financial planning and analysis, asset management, and the acquisition of financial capital.
the owner's wealth
Successful businesses typically progress through a series of life-cycle stages�from the idea stage to exiting the business; these five stages include the:
development stage, startup stage, survival stage, rapid growth stage, and maturity stage
_______________ is the study of how growth-driven, performance-focused, early-stage (from development through early rapid growth) firms raise financial capital and manage their operations and assets.
entrepreneurial finance
_______________ is the study of how individuals prepare for financial emergencies, protect against premature death and the loss of property, and accumulate wealth over time.
personal finance
Reasons we study finance include all of the following except:
to make informed medical decisions
Select ALL of the following are not among the six principles of finance:
- All decisions are ultimately financial decisions.
- Managers and stockholders objectives are always the same.
Which statement best describes the six principles of finance?
Money has a time value; Higher returns are expected for taking on more risk; Diversification of investments can reduce risk; Financial markets are efficient in pricing securities; Manager and stockholder objectives may differ; Reputation matters.
Select ALL of the following that an effective financial system needs:
- an efficient monetary system
- to be able to create capital by channeling savings into investment
- markets in which to buy and sell claims to wealth
Crucial elements of well-developed financial systems include all of the following except:
government control of the economy
Financial functions in the U.S. financial system include:
- transferring financial assets
- creating money
- accumulating savings
$1,000 invested today at 6% interest would be worth ________ one year from now (Choose the closest answer.)
$1,060
If the interest rate is greater than 0%, then a dollar today is worth
more than a dollar tomorrow
If the interest rate is equal to 0%, then a dollar today is worth
the same as a dollar tomorrow
A basic financial function of an effective financial system is a monetary system that performs which of the following?
transferring money
Rational investors would consider an investment in a risky business venture only if they feel the expected return is high enough to justify the
greater risk
Two risky assets can be combined to lower overall risk. This principle is commonly referred to as
diversification
In the United States, most money is created by:
depository institutions
Basic financial functions of an effective financial system include:
- creating money
- transferring money
- accumulating savings
The theory of ___________________ implies that information is quickly embedded in prices making it difficult for investors to "beat the market.
efficient markets
The basic components of an effective financial system in a developed economy include:
- a monetary system
- a savings-investment process
- markets for the transfer of financial assets
The possible conflict between managers and owners is sometimes called the
principal-agent problem
______________ behavior refers to how an individual or organization treats others legally, fairly, and honestly.
ethical
Career opportunities in finance involving both treasury and control functions are generally associated with:
business financial management
Intermediaries that help the financial system operate efficiently and transfer funds from savers and investors to individuals, businesses, and governments that seek to spend or invest the funds are known as:
financial institutions
An economy's _____________________ is the interaction of policy makers, a monetary system, financial institutions, and financial markets to expedite the flow of financial capital from savings into investment:
financial system
An efficient ______________ that is comprised of a central bank and a banking system that is able to create and transfer a stable medium of exchange called money.
monetary system
An effective financial system must have
- financial markets that facilitate the transfer of financial assets among individuals, institutions, businesses, and governments.
- financial institutions or intermediaries that support capital formation either by channeling savings into investment in ph
________________ facilitate the transfer of financial assets among individuals, institutions, businesses, and governments.
financial markets
The _________________ is primarily responsible for the amount of money that is created, although most of the money is actually created by depository institutions.
federal reserve system
Functions of the monetary system include all of the following except
accumulating savings
_________________ markets are where debt securities with maturities of one year or less are issued and traded.
money
_________________ markets are where debt instruments or securities with maturities longer than one year and corporate stocks or equity securities are issued and traded.
capital
_________________ markets are where the initial offering or origination of debt and equity securities takes place.
primary
_________________ markets are physical locations or electronic forums where debt (bonds and mortgages) and equity securities are traded.
secondary