SOPHIA LEARNING: PRINCIPLES OF FINANCE (UNIT 1:
CHALLENGE 1.1).
Built around real course units and objectives.
Assets - Answer: Something or someone of any value; economic resources that represent
the value of ownership that can be converted into cash.
Capitol - Answer: Money and wealth; the means to acquire goods and services, especially
in a non-barter system.
Debtor - Answer: A person or firm that owes money; one in debt or one who owes a debt.
Equity - Answer: The residual claim or interest to investors for assets after all liabilities are
paid.
Expected Return - Answer: Considering the magnitude and likelihood of exogenous events,
the yield that an investor predicts they will earn on average.
Finance - Answer: To provide or obtain funding for a transaction or undertaking; to back; to
support.
Financing - Answer: A transaction that provides funds for a business.
Investment - Answer: A placement of capital in expectation of deriving income or profit
from its use.
Liability - Answer: An obligation, debt or responsibility owed to someone.
Shareholder - Answer: One who owns shares of stock.
APPHIA – Crafted with Care and Precision for Academic Excellence. 1
, Financial Statement - Answer: A formal record of all relevant financial information of a
business, person, or other entity, presented in a structured and standardized manner to
allow easy understanding.
Fundamental Analysis - Answer: An analysis of a business with the goal of financial
projections in terms of income statement, financial statements and health, management
and competitive advantages, and competitors and markets.
Market Value - Answer: The total value of the company as traded in the market. Calculated
by multiplying the number of shares outstanding by the price per share.
Stakeholder - Answer: A person or organization with a legitimate interest in a given
situation, action, or enterprise.
Valuation - Answer: The process of estimating the market value of a financial asset or
liability.
Central Banks - Answer: National banks that implement monetary policy, issue currency,
and provide banking services to the government and commercial banking system of their
respective countries. The central bank in the United States is called the Federal Reserve.
Credit - Answer: A privilege of delayed payment extended to a buyer or borrower on the
seller's or lender's belief that what is given will be repaid.
Crowdfunding - Answer: Funding by many individuals pooling their money together for a
common goal, usually via the internet.
APPHIA – Crafted with Care and Precision for Academic Excellence. 2
CHALLENGE 1.1).
Built around real course units and objectives.
Assets - Answer: Something or someone of any value; economic resources that represent
the value of ownership that can be converted into cash.
Capitol - Answer: Money and wealth; the means to acquire goods and services, especially
in a non-barter system.
Debtor - Answer: A person or firm that owes money; one in debt or one who owes a debt.
Equity - Answer: The residual claim or interest to investors for assets after all liabilities are
paid.
Expected Return - Answer: Considering the magnitude and likelihood of exogenous events,
the yield that an investor predicts they will earn on average.
Finance - Answer: To provide or obtain funding for a transaction or undertaking; to back; to
support.
Financing - Answer: A transaction that provides funds for a business.
Investment - Answer: A placement of capital in expectation of deriving income or profit
from its use.
Liability - Answer: An obligation, debt or responsibility owed to someone.
Shareholder - Answer: One who owns shares of stock.
APPHIA – Crafted with Care and Precision for Academic Excellence. 1
, Financial Statement - Answer: A formal record of all relevant financial information of a
business, person, or other entity, presented in a structured and standardized manner to
allow easy understanding.
Fundamental Analysis - Answer: An analysis of a business with the goal of financial
projections in terms of income statement, financial statements and health, management
and competitive advantages, and competitors and markets.
Market Value - Answer: The total value of the company as traded in the market. Calculated
by multiplying the number of shares outstanding by the price per share.
Stakeholder - Answer: A person or organization with a legitimate interest in a given
situation, action, or enterprise.
Valuation - Answer: The process of estimating the market value of a financial asset or
liability.
Central Banks - Answer: National banks that implement monetary policy, issue currency,
and provide banking services to the government and commercial banking system of their
respective countries. The central bank in the United States is called the Federal Reserve.
Credit - Answer: A privilege of delayed payment extended to a buyer or borrower on the
seller's or lender's belief that what is given will be repaid.
Crowdfunding - Answer: Funding by many individuals pooling their money together for a
common goal, usually via the internet.
APPHIA – Crafted with Care and Precision for Academic Excellence. 2
