Introduction to finance

Major difference between finance and accounting Correct Answers Finance- all about the future/ predictions Accounting All about the past/ snapshot of the value « as at » What are 3 major decisions in finance Correct Answers Investments, financing, and dividends Which of the following was NOT identified as one of the three main areas of financial study? A) Business finance B) Capital Budgeting C) Investments D) Financial markets and institutions Correct Answers What is a broker? Correct Answers Individual or a firm that brings together potential buyers and sellers of a product and receives a commission at transaction. What is business finance? Correct Answers The study and application of how managers can apply financial principles to maximize the value of a firm What is capital budgeting? Correct Answers Process of determining which long-term or fixed assets to acquire in an effort to maximize shareholders wealth What is a capital market Correct Answers A market for longer-term financial instruments, such as stocks and bonds What does the CFO do, and what does it stand for? Correct Answers CFO- Chief financial officer- executive-level officer who sets policy workings for capital management, and determines optimal capital structure What is capital structure? Correct Answers The mix of financing, usually with dept and equity, used by a firm