FIN 300 Exam 1 Study Guide (Latest
Update ) Questions and
Verified Answers {Grade A} 100 % Correct -
BYU
Financial Markets - correct answer markets where financial securities, such as stocks
and bonds, are bought and sold
Primary markets versus secondary markets - correct answer -Primary markets are the
markets in which corporations raise new capital. The corporation selling a newly
created stock receives the proceeds from the sale in a primary market transaction
(Business/Gov to Investor)
-Secondary markets are markets in which existing, previously issued securities are
traded among investors. (investor to investor)
EMH (efficient market hypothesis) - correct answer Theory describing the behavior of
an assumed "perfect" market in which (1) securities are in equilibrium, (2) security
prices fully reflect all available information and react swiftly to new information, and
(3), because stocks are fully and fairly priced, investors need not waste time looking
for mispriced securities.
Securities - correct answer stocks and bonds
real versus nominal interest rates - correct answer - a nominal interest rate makes no
allowance for inflation
, FIN 300 Exam 1 Study Guide (Latest
Update ) Questions and
Verified Answers {Grade A} 100 % Correct -
BYU
- the real interest rate is the amount of extra purchasing power a lender must be paid
for the rental of his/her money
--- the ex ante real interest rate is adjusted for expected changes in the price level
---the ex post real interest rate is adjusted for actual changes in the price level
Fisher Equation - correct answer states that the real interest rate equals the nominal
interest rate minus the inflation rate
real interest rate = nominal interest rate - inflation rate
nominal interest rate = real interest rate + inflation rate
real interest rate formula - correct answer = nominal interest rate - inflation rate
nominal interest rate formula - correct answer = real interest rate + inflation rate
Annual report - correct answer a yearly statement of the financial condition, progress,
and expectations of an organization
annual report includes - correct answer 1. Financial statements.
2. Management discussion and analysis.
3. Notes to the financial statements.
, FIN 300 Exam 1 Study Guide (Latest
Update ) Questions and
Verified Answers {Grade A} 100 % Correct -
BYU
4. Auditor's report.
balance sheet - correct answer A financial statement that reports assets, liabilities,
and owner's equity on a specific date.
income statement - correct answer A financial statement showing the revenue and
expenses for a fiscal period.
RE statement - correct answer • The revision and publication of one or more of a
company's previous financial statements
• Necessary when it is determined that a previous statement contains a material
inaccuracy
• Company must file a form 8-K within four days to notify investors of non-reliance
on previously issued financial statements
Beg RE
+ NI
-Dividends
End RE
Update ) Questions and
Verified Answers {Grade A} 100 % Correct -
BYU
Financial Markets - correct answer markets where financial securities, such as stocks
and bonds, are bought and sold
Primary markets versus secondary markets - correct answer -Primary markets are the
markets in which corporations raise new capital. The corporation selling a newly
created stock receives the proceeds from the sale in a primary market transaction
(Business/Gov to Investor)
-Secondary markets are markets in which existing, previously issued securities are
traded among investors. (investor to investor)
EMH (efficient market hypothesis) - correct answer Theory describing the behavior of
an assumed "perfect" market in which (1) securities are in equilibrium, (2) security
prices fully reflect all available information and react swiftly to new information, and
(3), because stocks are fully and fairly priced, investors need not waste time looking
for mispriced securities.
Securities - correct answer stocks and bonds
real versus nominal interest rates - correct answer - a nominal interest rate makes no
allowance for inflation
, FIN 300 Exam 1 Study Guide (Latest
Update ) Questions and
Verified Answers {Grade A} 100 % Correct -
BYU
- the real interest rate is the amount of extra purchasing power a lender must be paid
for the rental of his/her money
--- the ex ante real interest rate is adjusted for expected changes in the price level
---the ex post real interest rate is adjusted for actual changes in the price level
Fisher Equation - correct answer states that the real interest rate equals the nominal
interest rate minus the inflation rate
real interest rate = nominal interest rate - inflation rate
nominal interest rate = real interest rate + inflation rate
real interest rate formula - correct answer = nominal interest rate - inflation rate
nominal interest rate formula - correct answer = real interest rate + inflation rate
Annual report - correct answer a yearly statement of the financial condition, progress,
and expectations of an organization
annual report includes - correct answer 1. Financial statements.
2. Management discussion and analysis.
3. Notes to the financial statements.
, FIN 300 Exam 1 Study Guide (Latest
Update ) Questions and
Verified Answers {Grade A} 100 % Correct -
BYU
4. Auditor's report.
balance sheet - correct answer A financial statement that reports assets, liabilities,
and owner's equity on a specific date.
income statement - correct answer A financial statement showing the revenue and
expenses for a fiscal period.
RE statement - correct answer • The revision and publication of one or more of a
company's previous financial statements
• Necessary when it is determined that a previous statement contains a material
inaccuracy
• Company must file a form 8-K within four days to notify investors of non-reliance
on previously issued financial statements
Beg RE
+ NI
-Dividends
End RE
