Finance 300 (CSULB Yulong Ma) Exam
1: Understanding the Basics of
Financial Management and Market
Operations Chapter 1, 4, 5
1. The four basic Areas of Finance are?
1. Corporate Finance = Business Finance
2. Financial Markets and Institutions
3. International Finance
4. Investments
Corporate Finance
the business function of obtaining funds for a company and managing them to accomplish the
company's objectives only relevant to corporations
Financial institutions
are basically businesses that deal primarily in financial matters. Banks and insurance
companies would probably be the most familiar to you. Banks--commercial and investment,
credit unions, savings and loans; Insurance Companies, Brokerage firms.
International finance
involve international aspects of either corporate finance, investments, or financial institutions.
For example, some portfolio managers and security analysts specialize in non-U.S.
companies. Similarly, many U.S. businesses have extensive overseas operations and need
employees familiar with such international topics as exchange rates and political risk. Banks
frequently are asked to make loans across country lines, so international specialists are
needed there as well.
Investments
, area deals with financial assets such as stocks and bonds. Some of the more important
questions include: What determines the price of a financial asset, such as a share of stock?
What are the potential risks and rewards associated with investing in financial assets? What is
the best mixture of the different types of financial assets to hold?
2.
(i) Primary market
It is a new issue. Investors buy directly from the issuing company.
(ii) Secondary market
It is already existing shares. Investors trade securities among themselves, eg. E-trade,
Robinhood etc.
Sole proprietorship
a business owned by one person. This is the simplest type of business to start and is the least
regulated form of organization. For this reason, there are more proprietorships than any other
type of business, and many businesses that later become large corporations start out as small
proprietorships.
Partnership
A business in which two or more persons combine their assets and skills. Partners share in
gains or losses, and all have unlimited liability for all partnership debts, not just some
particular share. The way partnership gains (and losses) are divided is described in the
partnership agreement. This agreement can be an informal oral agreement, such as "let's start
a lawn mowing business," or a lengthy, formal written document.
Disadvantages of sole proprietorships
(1) unlimited liability for business debts on the part of the owners
(2) limited life of the business, and
(3) difficulty of transferring ownership.
1: Understanding the Basics of
Financial Management and Market
Operations Chapter 1, 4, 5
1. The four basic Areas of Finance are?
1. Corporate Finance = Business Finance
2. Financial Markets and Institutions
3. International Finance
4. Investments
Corporate Finance
the business function of obtaining funds for a company and managing them to accomplish the
company's objectives only relevant to corporations
Financial institutions
are basically businesses that deal primarily in financial matters. Banks and insurance
companies would probably be the most familiar to you. Banks--commercial and investment,
credit unions, savings and loans; Insurance Companies, Brokerage firms.
International finance
involve international aspects of either corporate finance, investments, or financial institutions.
For example, some portfolio managers and security analysts specialize in non-U.S.
companies. Similarly, many U.S. businesses have extensive overseas operations and need
employees familiar with such international topics as exchange rates and political risk. Banks
frequently are asked to make loans across country lines, so international specialists are
needed there as well.
Investments
, area deals with financial assets such as stocks and bonds. Some of the more important
questions include: What determines the price of a financial asset, such as a share of stock?
What are the potential risks and rewards associated with investing in financial assets? What is
the best mixture of the different types of financial assets to hold?
2.
(i) Primary market
It is a new issue. Investors buy directly from the issuing company.
(ii) Secondary market
It is already existing shares. Investors trade securities among themselves, eg. E-trade,
Robinhood etc.
Sole proprietorship
a business owned by one person. This is the simplest type of business to start and is the least
regulated form of organization. For this reason, there are more proprietorships than any other
type of business, and many businesses that later become large corporations start out as small
proprietorships.
Partnership
A business in which two or more persons combine their assets and skills. Partners share in
gains or losses, and all have unlimited liability for all partnership debts, not just some
particular share. The way partnership gains (and losses) are divided is described in the
partnership agreement. This agreement can be an informal oral agreement, such as "let's start
a lawn mowing business," or a lengthy, formal written document.
Disadvantages of sole proprietorships
(1) unlimited liability for business debts on the part of the owners
(2) limited life of the business, and
(3) difficulty of transferring ownership.
