WGU D775 INTRODUCTION TO BUSINESS FINANCE EXAM GRADED A+
1. 3 types of financial insturments: stock, bond, derivatives
2. stocks: certificates that represent ownership interest
3. bond: loans sold to raise capital; provide a fixed income stream through interest
payments and the return of principal maturity; recorded under liabilities on balance
sheet
4. derivatives: contracts whose value is derived from some other entity (usually an asset of
some kind); used to hedge against or speculate on risk
5. 6 types of financial markets: public,
private primary, secondary
dealer, auction
6. financial markets definition: where buyers and sellers can trade financial assets
7. 4 types of financial institutions: depositary, investment, insurance, pension
fund
8. 7 economic indicators: GDP, CPI, PPI, consumer spending, unemployment rate, yield
curve, interest rate
9. GDP acronym: Gross Domestic Product (acronym)
10. GDP definition: (definition) value of goods and services produced in an economy
11. CPI acroynm: Consumer Price Index (acronym)
12. CPI definition: (definition) cost of living changes over time; economic indicator that
,measures changes in the price level of a market portfolio
13. PPI acronym: producer price index (acronym)
14. PPI definition: (definition) average change over time in selling prices received by
domestic producers for their output
15. 2 factors in inflation: CPI and PPI
16. consumer spending: economic indicators based on total consumer spending
17. yield curve predictions: economic indicator that predicts the direction of interest
rates and economic expansion or contraction
18. accounting: systematic recording, reporting, and analysis of financial transactions
19. accounting outputs: balance sheets, income statements, cash flow statements
20. finance: management of assets and liabilities, and planning for future growth and
stability
21. finance outputs: investment portfolios, financial strategies, budgets
22. 3 types of finance: personal, public, business
23. public finance: management of govt renues, expenditures, and debt load through
govt institutions
24. examples of public finance: tax collection, govt spending, budgeting, public
debt issuance
25. business finance: financial activities of companies
, 26. business finance examples: capital investment decisions, financing methods,
dividend policies, risk management
27. goal of public finance: allocate resources eflciently and provide public services
28. goal of business finance: maximize shareholder value
29. roles of business finance: ratio analysis, capital budgeting, risk management
30. ratio analysis: one of the 3 roles of business finance; computing financial measures
31. capital budgeting: assessment of projected cash flows, costs, and return of projects
to evaluate potential investments
32. Where is common stock recorded?: is recorded under owner equity on the
balance sheet.
33. Common stock is in publicly traded firms.: is liquid in publicly traded firms
34. common stockholders benefits: voting rights, receive variable dividends after
preferred stock-holders
35. market capitalization definition: metric for measuring the size of a firm
36. capital appreciation: when a stock is purchased at a lower price than what it was
sold at
37. Preferred stock is recorded under the portion of the balance
sheet.-
: Preferred stock is recorded under the owner equity portion of the .
38. preferred stockholder benefits: receive fixed dividends, no voting rights
39. creditor: issuer of bonds; benefits from proceeds of bonds; makes payments as agreed
by the bond ottering
40. issue: sell
41. coupon rate: payment terms of a bond; physical attachment to bond
42. maturity: date when last bond coupon is due
43. yield: interest rate earned by investor for lending money to the organization issuing the
bond
1. 3 types of financial insturments: stock, bond, derivatives
2. stocks: certificates that represent ownership interest
3. bond: loans sold to raise capital; provide a fixed income stream through interest
payments and the return of principal maturity; recorded under liabilities on balance
sheet
4. derivatives: contracts whose value is derived from some other entity (usually an asset of
some kind); used to hedge against or speculate on risk
5. 6 types of financial markets: public,
private primary, secondary
dealer, auction
6. financial markets definition: where buyers and sellers can trade financial assets
7. 4 types of financial institutions: depositary, investment, insurance, pension
fund
8. 7 economic indicators: GDP, CPI, PPI, consumer spending, unemployment rate, yield
curve, interest rate
9. GDP acronym: Gross Domestic Product (acronym)
10. GDP definition: (definition) value of goods and services produced in an economy
11. CPI acroynm: Consumer Price Index (acronym)
12. CPI definition: (definition) cost of living changes over time; economic indicator that
,measures changes in the price level of a market portfolio
13. PPI acronym: producer price index (acronym)
14. PPI definition: (definition) average change over time in selling prices received by
domestic producers for their output
15. 2 factors in inflation: CPI and PPI
16. consumer spending: economic indicators based on total consumer spending
17. yield curve predictions: economic indicator that predicts the direction of interest
rates and economic expansion or contraction
18. accounting: systematic recording, reporting, and analysis of financial transactions
19. accounting outputs: balance sheets, income statements, cash flow statements
20. finance: management of assets and liabilities, and planning for future growth and
stability
21. finance outputs: investment portfolios, financial strategies, budgets
22. 3 types of finance: personal, public, business
23. public finance: management of govt renues, expenditures, and debt load through
govt institutions
24. examples of public finance: tax collection, govt spending, budgeting, public
debt issuance
25. business finance: financial activities of companies
, 26. business finance examples: capital investment decisions, financing methods,
dividend policies, risk management
27. goal of public finance: allocate resources eflciently and provide public services
28. goal of business finance: maximize shareholder value
29. roles of business finance: ratio analysis, capital budgeting, risk management
30. ratio analysis: one of the 3 roles of business finance; computing financial measures
31. capital budgeting: assessment of projected cash flows, costs, and return of projects
to evaluate potential investments
32. Where is common stock recorded?: is recorded under owner equity on the
balance sheet.
33. Common stock is in publicly traded firms.: is liquid in publicly traded firms
34. common stockholders benefits: voting rights, receive variable dividends after
preferred stock-holders
35. market capitalization definition: metric for measuring the size of a firm
36. capital appreciation: when a stock is purchased at a lower price than what it was
sold at
37. Preferred stock is recorded under the portion of the balance
sheet.-
: Preferred stock is recorded under the owner equity portion of the .
38. preferred stockholder benefits: receive fixed dividends, no voting rights
39. creditor: issuer of bonds; benefits from proceeds of bonds; makes payments as agreed
by the bond ottering
40. issue: sell
41. coupon rate: payment terms of a bond; physical attachment to bond
42. maturity: date when last bond coupon is due
43. yield: interest rate earned by investor for lending money to the organization issuing the
bond
