Finance 300 ( CSULB Yulong Ma) Exam 1 Chpt 1, 4, 5 with answers graded A+ 2024/2025

Finance 300 ( CSULB Yulong Ma) Exam 1 Chpt 1, 4, 5 The four basic Areas of Finance are? - correct answer 1. Corporate Finance = Business Finance 2. Investments 3. Financial Markets and Institutions 4. International Finance Corporate Finance - correct answer the business function of obtaining funds for a company and managing them to accomplish the company's objectives only relevant to corporations investments - correct answer 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? Financial institutions - correct answer 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 - correct answer 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. primary market - correct answer It is a new issue. Investors buy directly from the issuing company. secondary market - correct answer It is already existing shares. Investors trade securities among themselves, eg. E-trade, Robinhood etc. Why Study Finance? - correct answer Analyzing costs and benefits of projects of all types is one of the most important aspects of finance, so the tools you learn in finance are vital in marketing research, the design of marketing and distribution channels, and product pricing. Understanding of how their jobs affect profitability, and they are also expected to be able to work within their areas to improve profitability. you will have to make financial decisions that will be very important to you personally. Capital Budgeting - correct answer the process of planning and managing a firm's long-term investments. Into what category of financial management does cash management fall? - correct answer Working Capital Management: assets - current liabilities. The term working capital refers to a firm's short-term assets, such as inventory, and its short-term liabilities, such as money owed to suppliers. Managing the firm's working capital is a day-to-day activity that ensures the firm has sufficient resources to continue its operations and avoid costly interruptions. This involves a number of activities related to the firm's receipt and disbursement of cash. What is the capital budgeting decision? - correct answer In capital budgeting, the financial manager tries to identify investment opportunities that are worth more to the firm than they cost to acquire. Loosely speaking, this means that the value of the cash flow generated by an asset exceeds the cost of that asset. What do you call the specific mixture of long-term debt and equity that a firm chooses to use? - correct answer Capital Structure: The financial manager has two concerns in this area. First: How much should the firm borrow? Second: What are the least expensive sources of funds for the firm? sole proprietorship - correct answer 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* - correct answer 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.