FINANCIAL MANAGEMENT: CORE CONCEPTS
ACTUAL TEST PAPER QUESTIONS AND
SOLUTIONS GRADED A+
◉ How does Merriam-Webster define finance at the macro level?
Answer: Finance is the system that includes the circulation of
money, the granting of credit, the making of investments, and the
provision of banking facilities.
◉ What is finance at the micro level?
Answer: It is the science or study of the management of funds.
◉ What are the three key areas of finance studied at the college
level?
Answer: Financial Management, Investments, and Capital Markets.
◉ What is financial management also known as?
Answer: Corporate Finance.
◉ What are the main decisions involved in financial management?
Answer: Choosing types of assets to acquire, raising capital needed
to buy those assets, and running the company to maximize its value.
, ◉ What do investments relate to?
Answer: Decisions made concerning bonds, stocks, derivatives, and
other alternative asset classes such as real estate and
cryptocurrency.
◉ What are the three main decisions involved in investments?
Answer: Analyzing individual investments for proper valuation,
combining investments into portfolios to maximize return while
limiting risk, and analyzing markets for asset pricing.
◉ What are capital markets?
Answer: Financial markets that connect borrowers (those needing
money) with savers (those with money).
◉ What are the most common types of capital markets?
Answer: The stock market and the bond market.
◉ What is the doctrine of Shareholder Primacy?
Answer: The belief that a company's primary responsibility is to
maximize the value to shareholders.
◉ Who argued that the only social responsibility of business is to
increase its profits?
ACTUAL TEST PAPER QUESTIONS AND
SOLUTIONS GRADED A+
◉ How does Merriam-Webster define finance at the macro level?
Answer: Finance is the system that includes the circulation of
money, the granting of credit, the making of investments, and the
provision of banking facilities.
◉ What is finance at the micro level?
Answer: It is the science or study of the management of funds.
◉ What are the three key areas of finance studied at the college
level?
Answer: Financial Management, Investments, and Capital Markets.
◉ What is financial management also known as?
Answer: Corporate Finance.
◉ What are the main decisions involved in financial management?
Answer: Choosing types of assets to acquire, raising capital needed
to buy those assets, and running the company to maximize its value.
, ◉ What do investments relate to?
Answer: Decisions made concerning bonds, stocks, derivatives, and
other alternative asset classes such as real estate and
cryptocurrency.
◉ What are the three main decisions involved in investments?
Answer: Analyzing individual investments for proper valuation,
combining investments into portfolios to maximize return while
limiting risk, and analyzing markets for asset pricing.
◉ What are capital markets?
Answer: Financial markets that connect borrowers (those needing
money) with savers (those with money).
◉ What are the most common types of capital markets?
Answer: The stock market and the bond market.
◉ What is the doctrine of Shareholder Primacy?
Answer: The belief that a company's primary responsibility is to
maximize the value to shareholders.
◉ Who argued that the only social responsibility of business is to
increase its profits?
