BFIN 333 Exam 1 Study Guide | Business Finance Practice Questions & Review
Notes 2026
3 components of rate of return - ✔✔-Delaying consumption
-Inflation
-Bearing Risk
Call option (Rights and Obligation) - ✔✔Buyer - *right* to buy 100 shares of stock at strike
Writer - *Obligation* to sell 100 shares of stock at strike
Put option (Rights and Obligation) - ✔✔Buyer - *right* to sell 100 shares at strike
Writer - *obligation* to buy back 100 shares from buyer at strike
Open-end - ✔✔shares are bought/sold at NAV
closed end - ✔✔company with a fixed # of shares are bought / sold only in the open market
Put option - ✔✔Long put option (bold)
Short put option (dotted)
*lines start on left
Call option - ✔✔Long Call (bold)
, Short Call (dotted)
Steps involved in selling asset short - ✔✔-borrow shares from client account
-sell them
-wait for shares to fall or broker demand "cover short"
-buy shares back at lower price, return to broker
Third market - ✔✔*off exchange*
-securities listed on organized exchange
Fourth market - ✔✔trade with other investors through computer network
Secondary Market - ✔✔buy / sell already issued securities among investors
main duties of board of directors - ✔✔- rehire portfolio manager
- negotiate management fees
why investors need to calculate money-weighted return? - ✔✔money weighted account for
changes in amount of funds exposed in market during an investments life
Cash Flow question - ✔✔T = 0 --> amount paid for stock (neg. CF paid)
CF's invested into account = (negative)
CF's withdrew from account = positive
Notes 2026
3 components of rate of return - ✔✔-Delaying consumption
-Inflation
-Bearing Risk
Call option (Rights and Obligation) - ✔✔Buyer - *right* to buy 100 shares of stock at strike
Writer - *Obligation* to sell 100 shares of stock at strike
Put option (Rights and Obligation) - ✔✔Buyer - *right* to sell 100 shares at strike
Writer - *obligation* to buy back 100 shares from buyer at strike
Open-end - ✔✔shares are bought/sold at NAV
closed end - ✔✔company with a fixed # of shares are bought / sold only in the open market
Put option - ✔✔Long put option (bold)
Short put option (dotted)
*lines start on left
Call option - ✔✔Long Call (bold)
, Short Call (dotted)
Steps involved in selling asset short - ✔✔-borrow shares from client account
-sell them
-wait for shares to fall or broker demand "cover short"
-buy shares back at lower price, return to broker
Third market - ✔✔*off exchange*
-securities listed on organized exchange
Fourth market - ✔✔trade with other investors through computer network
Secondary Market - ✔✔buy / sell already issued securities among investors
main duties of board of directors - ✔✔- rehire portfolio manager
- negotiate management fees
why investors need to calculate money-weighted return? - ✔✔money weighted account for
changes in amount of funds exposed in market during an investments life
Cash Flow question - ✔✔T = 0 --> amount paid for stock (neg. CF paid)
CF's invested into account = (negative)
CF's withdrew from account = positive
