Finance Skills for Managers - D076 (TEST)

What are the main services offered by financial institutions? - Answer- Accepting a wide variety of deposits, offering investment products, providing loans, and brokering financial transactions (Correct! Financial institutions such as banks, insurance companies, and mutual fund companies provide these services.) What is the main objective of personal financial goals? - Answer- To maximize individual utility (Correct! You set goals and act to increase your satisfaction or happiness by taking care of necessities and achieving priorities.) Which task does the financial manager of a firm perform that involves the issuance of new stocks and bonds? - Answer- Making financing decisions (Correct! Once investment decisions are made, a financial manager considers different possibilities of financing sources for the investments. This may include issuing new stocks and bonds.) Why is understanding the definition of finance important in managing personal finances? - Answer- It helps individuals compare the costs and benefits of an action to determine whether to take that action. (Correct! Any financial decision should make sense in terms of its costs and benefits.) In which type of market would a company issue bonds or stocks for the first time? - Answer- Primary market (Correct! This is the purpose of a primary market.) Which type of financial institution is a mutual fund? - Answer- Investment institution (Correct! Investment institutions provide individuals and firms access to financial markets.) Which financial institution specializes in managing and administering retirement funds? - Answer- Pension funds (Correct! Pension funds specialize in retirement funds.) Which type of economic indicator is the consumer price index? - Answer- Lagging indicator