USD Exit Exam - Finance Review Questions
100% Solved.
Financial management decisions - answercapital budgeting, capital structure, and working
capital.
role of financial manager - answertaking care of all of the financial functions of an
organization.
agency theory - answera theory explaining...
lump sum payment - answer✔a single payment of money, as opposed to a series of payments
made over time (such as an annuity).
annuities - answer✔a lump sum of cash invested to produce a monthly stream of income for a
fixed period or for life.
impact of inflation on interest rates - answer✔as interest rates are lowered, more people are able
to borrow more money. the result is that consumers have more money to spend, causing the
economy to grow and inflation to increase. the opposite holds true for rising interest rates.
returns of a portfolio - answer✔the monetary return experienced by a holder of a portfolio.
they can be calculated on a daily or long-term basis to serve as a method of assessing a particular
investment strategy.
Dividends and capital appreciation are the main components of this.
covariance - answer✔a measure of the degree to which returns on two risky assets move in
tandem. A positive covariance means that asset returns move together, while a negative
covariance means returns move inversely.
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