BA 105 Exam #2 Questions with Complete
Solutions
Finance & Financial Management
•Bonds
•Similarities and differences from stock
•Types of bonds
•Treasury bond
•Municipal bond
•Corporate bond
•Junk bond Bonds:
- Loans
- Principal (Amount borrowed)
- Interest (Fee for borrowed money)
Similarities and differences from stock
-The difference between stocks and bonds is that stocks are shares in the ownership of a
business, while bonds are a form of debt that the issuing entity promises to repay at some point
in the future.
, types of bonds:
•Treasury bond - loan to Fed gov't
•Municipal bond - loan to local gov't
•Corporate bond - loan to corporation
•Junk bond - loan to high risk company
•Compound Interest refers to the effect of earning interest on your interest.
•Time Value of money the principle whereby a dollar received in the present is worth
more than a dollar received in the future.
Accounting Functions
(Its primary responsibility is to generate financial statements and the related disclosures that
fairly reflect the financial results and condition of the organization) financial- furnish
information to individuals and groups both inside and outside the organization in order to help
them assess its financial performance. ----------- Managerial - provide information and analysis to
decision makers inside the organization in order to help them run it. ----------- Corporate- deals
with the accounting for companies ,preparation of their final accounts and cash flow statements,
analysis and interpretation of companies's financial results and accounting for specific events
like amalgamation, absorption, preparation of consolidated balance sheets. --------- Government-
Solutions
Finance & Financial Management
•Bonds
•Similarities and differences from stock
•Types of bonds
•Treasury bond
•Municipal bond
•Corporate bond
•Junk bond Bonds:
- Loans
- Principal (Amount borrowed)
- Interest (Fee for borrowed money)
Similarities and differences from stock
-The difference between stocks and bonds is that stocks are shares in the ownership of a
business, while bonds are a form of debt that the issuing entity promises to repay at some point
in the future.
, types of bonds:
•Treasury bond - loan to Fed gov't
•Municipal bond - loan to local gov't
•Corporate bond - loan to corporation
•Junk bond - loan to high risk company
•Compound Interest refers to the effect of earning interest on your interest.
•Time Value of money the principle whereby a dollar received in the present is worth
more than a dollar received in the future.
Accounting Functions
(Its primary responsibility is to generate financial statements and the related disclosures that
fairly reflect the financial results and condition of the organization) financial- furnish
information to individuals and groups both inside and outside the organization in order to help
them assess its financial performance. ----------- Managerial - provide information and analysis to
decision makers inside the organization in order to help them run it. ----------- Corporate- deals
with the accounting for companies ,preparation of their final accounts and cash flow statements,
analysis and interpretation of companies's financial results and accounting for specific events
like amalgamation, absorption, preparation of consolidated balance sheets. --------- Government-
