FIN2603 Exam QUESTIONS WITH COMPLETE
SOLUTIONS (100 % CORRECT AND VERIFIED)
ALREADY PASSED!!
capital market - ...(ANSWERS)....a market place where companies and
government can raise long term funds, a market where money is lent for periods
longer than 1 year
cost-benefit principle - ...(ANSWERS)....sound financial decision making requires
that an analysis of the total cost and the total benefits be conducted - as far as
possible, the benefit should be greater than the cost of any decision
Financial institution - ...(ANSWERS)....an organisation that acts as a channel
between savers and borrowers of funds (Two main types of financial institutions
are banks that pay interest on
deposits from the interest earned on the loans, and insurance companies and
mutual
funds that collect funds by selling their policies or shares to the public and provide
returns
in the form of periodic benefits and profit payouts.)
financial manager - ...(ANSWERS)....uses financial statements to make capital-
budgeting decisions, capital structure decisions and working-capital decisions in
order to create wealth for the organisation's shareholders
, Money markets - ...(ANSWERS)....the financial markets for short-term borrowing
and lending; provide short-term liquidity with securities such as treasury bills,
commercial paper and bankers'
acceptances
Profitability - ...(ANSWERS)....the firm's ability to generate revenues that will
exceed total costs by using
the firm's assets for productive purposes; may be achieved by marketing products
or services to maintain a sufficient profit margin with the support of promotions
at competitive prices directed to appropriate target markets through appropriate
distribution channels
Spread - ...(ANSWERS)....the difference between the rate charged and the rate
paid (Financial institutions need to invest or lend out their available funds at a
rate that exceeds the rate they are
paying to their depositors
Solvency - ...(ANSWERS)....the extent to which a firm's assets exceed its liabilities;
differs from liquidity in that liquidity pertains to the settlement of short-term
liabilities, while solvency pertains
to the excess of total assets over total liabilities
Time value of money - ...(ANSWERS)....a concept used to evaluate any financial
decision involving differences in the timing of cash inflows and outflows; a matter
of interest that may be earned if money is available today and invested, or of
SOLUTIONS (100 % CORRECT AND VERIFIED)
ALREADY PASSED!!
capital market - ...(ANSWERS)....a market place where companies and
government can raise long term funds, a market where money is lent for periods
longer than 1 year
cost-benefit principle - ...(ANSWERS)....sound financial decision making requires
that an analysis of the total cost and the total benefits be conducted - as far as
possible, the benefit should be greater than the cost of any decision
Financial institution - ...(ANSWERS)....an organisation that acts as a channel
between savers and borrowers of funds (Two main types of financial institutions
are banks that pay interest on
deposits from the interest earned on the loans, and insurance companies and
mutual
funds that collect funds by selling their policies or shares to the public and provide
returns
in the form of periodic benefits and profit payouts.)
financial manager - ...(ANSWERS)....uses financial statements to make capital-
budgeting decisions, capital structure decisions and working-capital decisions in
order to create wealth for the organisation's shareholders
, Money markets - ...(ANSWERS)....the financial markets for short-term borrowing
and lending; provide short-term liquidity with securities such as treasury bills,
commercial paper and bankers'
acceptances
Profitability - ...(ANSWERS)....the firm's ability to generate revenues that will
exceed total costs by using
the firm's assets for productive purposes; may be achieved by marketing products
or services to maintain a sufficient profit margin with the support of promotions
at competitive prices directed to appropriate target markets through appropriate
distribution channels
Spread - ...(ANSWERS)....the difference between the rate charged and the rate
paid (Financial institutions need to invest or lend out their available funds at a
rate that exceeds the rate they are
paying to their depositors
Solvency - ...(ANSWERS)....the extent to which a firm's assets exceed its liabilities;
differs from liquidity in that liquidity pertains to the settlement of short-term
liabilities, while solvency pertains
to the excess of total assets over total liabilities
Time value of money - ...(ANSWERS)....a concept used to evaluate any financial
decision involving differences in the timing of cash inflows and outflows; a matter
of interest that may be earned if money is available today and invested, or of
