FNAN 320 EXAM 1 QUESTIONS WITH VERIFIED
ANSWERS
Cycle of Money - Answers - The movement of money from lender to borrower and back
again.
Financial Intermediary - Answers - An institution that acts as a "middleman" between
the borrowers and lenders.
Corporate Finance - Answers - Financial activities that support the operations of a
corporation or business.
Investments - Answers - Activities such as buying and selling of assets.
Real Assets - Answers - Physical assets such as property and equipment or
commodities such as corn or oil.
Financial Assets - Answers - Intangible assets such as stocks and bonds.
Financial Institutions and Markets - Answers - The organized financial intermediaries
and the forums that promote the cycle of money.
International Finance - Answers - Concerned with the addition of a multinational
element to the finance activities.
Equity Markets - Answers - Where stocks are bought and sold.
Debt Markets - Answers - Where bonds are bought and sold.
Derivatives Markets - Answers - Where future contracts on commodities are bought and
sold or where options on equities, futures or currencies are bought and sold.
Foreign Exchange - Answers - Where currencies are bought and sold.
Sole Proprietorship - Answers - Business that is owned entirely by an individual
Partnership - Answers - Business owned by two or more people.
Corporation - Answers - Business form in which the company is a legal, separate entity
from the owners and can enter into contracts, can sue, and pays taxes.
Principle Agent Problem - Answers - The problem of motivating one part to act in the
best interest of another party.
ANSWERS
Cycle of Money - Answers - The movement of money from lender to borrower and back
again.
Financial Intermediary - Answers - An institution that acts as a "middleman" between
the borrowers and lenders.
Corporate Finance - Answers - Financial activities that support the operations of a
corporation or business.
Investments - Answers - Activities such as buying and selling of assets.
Real Assets - Answers - Physical assets such as property and equipment or
commodities such as corn or oil.
Financial Assets - Answers - Intangible assets such as stocks and bonds.
Financial Institutions and Markets - Answers - The organized financial intermediaries
and the forums that promote the cycle of money.
International Finance - Answers - Concerned with the addition of a multinational
element to the finance activities.
Equity Markets - Answers - Where stocks are bought and sold.
Debt Markets - Answers - Where bonds are bought and sold.
Derivatives Markets - Answers - Where future contracts on commodities are bought and
sold or where options on equities, futures or currencies are bought and sold.
Foreign Exchange - Answers - Where currencies are bought and sold.
Sole Proprietorship - Answers - Business that is owned entirely by an individual
Partnership - Answers - Business owned by two or more people.
Corporation - Answers - Business form in which the company is a legal, separate entity
from the owners and can enter into contracts, can sue, and pays taxes.
Principle Agent Problem - Answers - The problem of motivating one part to act in the
best interest of another party.
