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COB 300 Finance Exam 1 Study Guide questions well answered already passed $17.99   Add to cart

Exam (elaborations)

COB 300 Finance Exam 1 Study Guide questions well answered already passed

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  • Course
  • COB 300d
  • Institution
  • COB 300d

COB 300 Finance Exam 1 Study Guide questions well answered already passed

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  • September 11, 2024
  • 16
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • COB 300d
  • COB 300d
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BravelRadon
COB 300 Finance Exam 1 Study Guide

Finance - correct answer ✔✔the system that includes the circulation of money, the granting of credit,
the making of investments, and the provision of banking facilities



Financial Management (Corporate Finance) - correct answer ✔✔focuses on decisions relating to how
much and what type of assets to acquire, how to raise the capital needed to purchase assets, and how to
run the firm as to maximize its value; same rules apply to both for-profit and not-for-profit



Capital Markets - correct answer ✔✔relate to the markets where interest rates, along with stock and
bond prices, are determined



Federal Reserve System - correct answer ✔✔regulates banks and controls the supply of money



Securities and Exchange Commission (SEC) - correct answer ✔✔regulates the trading of stock and bonds
in public markets



Investments - correct answer ✔✔relate to decisions concerning stock and bonds and include a number
of activities



Security Analysis - correct answer ✔✔deals with finding the proper value of individual securities



Portfolio Theory - correct answer ✔✔deals with the best way to structure portfolios, or "baskets" of
stock and bonds



Market Analysis - correct answer ✔✔deals with the issue of whether stock and bond markets at any
given time at too high, too low, or about right; has to do with behavioral finance



Behavioral Finance - correct answer ✔✔where investor psychology is examined in an effort to determine
whether stock prices have been bid up to unreasonable heights in a speculative bubble or driven down
to unreasonable lows in a fit of irrational pessimism.

,Hierarchy of Organizations - correct answer ✔✔- Board of Directors

- CEO

- COO

- CFO



COO - correct answer ✔✔often the firm's president and directs the firm's operations: marketing,
manufacturing, sales, and other operating departments



CFO - correct answer ✔✔senior vice president and is in charge of accounting, finance, credit policy,
decisions regarding asset acquisition, and investor relations which involves communications with
stockholders and the press



Sarbanes-Oxley Act of 2002 - correct answer ✔✔provides sweeping new legal protection for employees
who report corporate misconduct



Defined Contribution Pension Plan - correct answer ✔✔each year the company puts a specified number
of money into an account that belongs to the employee and the employee must decide how this money
is invested and how much risk they are willing to take



Four Main Forms of Business Organizations - correct answer ✔✔1. proprietorships

2. partnerships

3. corporations

4. limited liability companies (LLCs) and limited liability partnerships (LLPs)



Proprietorships - correct answer ✔✔unincorporated business owned by an individual



Advantages of Proprietorship - correct answer ✔✔1. they are easy and inexpensive to form

2. they are subject to few government regulations

3. they are subject to lower income taxes than are corporations

, Limitations of Proprietorship - correct answer ✔✔Unlimited personal liability

Limited life

Transferring ownership is difficult

Difficult to raise capital



Partnership - correct answer ✔✔A legal agreement between two or more people to be jointly
responsible for the success or failure of a business.



Advantages of Parnetship - correct answer ✔✔easy to establish and inexpensive; firm's income is
allocated on a pro rata basis and is taxed individually so they can avoid corporate tax



Limitations of Partnership - correct answer ✔✔unlimited personal liability, difficult to raise capital, life is
limited to owners' lives



Corporations - correct answer ✔✔legal entity created by a state, and is separate and distinct from its
owners and managesr



Advantages of Corporations - correct answer ✔✔ownership of corporations is easily transferable and it
rarely has any effect on the daily operations of the business

- unlimited life

- separation limits stockholders' losses to the amount they invested



Limitation of Corporations - correct answer ✔✔incomes are subjected to double taxation



S Corporations - correct answer ✔✔A special designation that allows small businesses that meet
qualifications to be taxed as if they were a proprietorship or a partnership rather than a corporation.

- must have no more than 100 stockholders



LLCs & LLPs - correct answer ✔✔-Provide limited liability protection

-Taxed as a partnership

-Investors have votes in proportion to their ownership interest

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