FIN 300 Exam 1 with verified answers.

FIN 300 Exam 1 with verified answers
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Investments |- |✔✔💯Financial |assets |such |as |stocks |and |bonds



Financial |Institutions |- |✔✔💯-Banks |(commercial |and |investment), |credit |unions, |savings |and |loans

-Insurance |companies

-Brokerage |firms

-Mutual |funds/Hedge |funds



Corporate |Finance |- |✔✔💯-Managing |the |firm's |short/long-term |investments

-Financing |the |firm's |growth

-Returning |capital |to |stakeholders



Forms |of |Business |Organization |- |✔✔💯1.) |Sole |Proprietorship

2.) |Partnership

--General

--Limited

3.) |Corporation



Sole |Proprietorship |- |✔✔💯Definition: |business |owned |by |one |person

-ADVANTAGES:

1.) |Easiest |to |start

2.) |Least |regulated

3.) |Single |owner |keeps |all |of |the |profits

4.) |Taxed |once |as |personal |income



-DISADVANTAGES:

, 1.) |Limited |to |life |of |owner

2.) |Equity |capital |limited |to |owner's |personal |wealth

3.) |Unlimited |liability

4.) |Difficult |to |sell |ownership |interest



Partnership |- |✔✔💯Definition: |business |owned |by |two |or |more |persons

-ADVANTAGES:

1.) |Two |or |more |owners

2.) |More |capital |available

3.) |Relatively |east |to |start

4.) |Income |taxed |once |as |personal |income



-DISADVANTAGES:

1.) |Unlimited |liability

--General |partnership

--Limited |partnership

2.) |Partnership |dissolves |when |one |partner |dies |or |wishes |to |sell

3.) |Difficult |to |transfer |ownership



Corporation |- |✔✔💯Definition: |a |legal |"person" |distinct |from |owners |and |a |resident |of |a |state

-ADVANTAGES:

1.) |Limited |liability

2.) |Unlimited |life

3.) |Transfer |of |ownership |is |easy

4.) |Easier |to |raise |capital



-DISADVANTAGES:

1.) |Separation |of |ownership |and |management |(agency |problem)