Exam (elaborations)

Financial Management Core Concepts 4th Edition.pdf

20 views 0 purchase

Institution
University Of Alberta (UofA)

Financial Management Core Concepts 4th E Financial Management: Core Concepts, 4e (Brooks) Chapter 1 Financial Management 1.1 The Cycle of Money 1) At its most basic level, the function of financial intermediaries is to ________. A) track and report interest rates B) move money from lenders to...

[Show more]

Preview 4 out of 36 pages

View example

Uploaded on January 31, 2022
Number of pages 36
Written in 2021/2022
Type Exam (elaborations)
Contains Questions & answers

financial management core concepts 4th editionpdf
financial management core concepts 4th editionpdffinancial management core concepts 4th editionpdffinancial management core concepts 4th editionpd

donatrey Member since 2 year 79 documents sold

CA$15.08

Added

Add to cart Add to wishlist

100% satisfaction guarantee
Immediately available after payment
Both online and in PDF
No strings attached

Financial Management: Core Concepts 4th Edition
Brooks

1

,Financial Management: Core Concepts, 4e (Brooks)
Chapter 1 Financial Management

1.1 The Cycle of Money

1) At its most basic level, the function of financial intermediaries is to ________.
A) track and report interest rates
B) move money from lenders to borrowers and back again
C) report all financial transactions to the federal government
D) effect a transfer of wealth in society
Answer: B
Diff: 1
Topic: 1.1 The Cycle of Money
AACSB: Analytical Thinking
LO: 1.1 Describe the cycle of money, the participants in the cycle, and the common objective of
borrowing and lending.

2) Which of the following is NOT an example of a financial transaction?
A) Your parents use their credit card to pay for your current term's college tuition.
B) You use the ATM at Heathrow airport in London to withdraw British pounds.
C) Your roommate lends you $20 and you repay it in one week.
D) All of the above are financial transactions.
Answer: D
Diff: 2
Topic: 1.1 The Cycle of Money
AACSB: Analytical Thinking
LO: 1.1 Describe the cycle of money, the participants in the cycle, and the common objective of
borrowing and lending.

3) The movement of money from lender to borrower and back again is known as ________.
A) the circle of life
B) corporate finance
C) the cycle of money
D) money laundering
Answer: C
Diff: 1
Topic: 1.1 The Cycle of Money
AACSB: Analytical Thinking
LO: 1.1 Describe the cycle of money, the participants in the cycle, and the common objective of
borrowing and lending.
Hmwrk Questions: * Taken from "Prepping for Exams" questions at the end of the chapter.

2

,4) The common objective of borrowing and lending is to ________.
A) make all parties better off
B) gain a profit at the other's expense
C) make a firm or individual appear more liquid than is really the case
D) thwart regulatory authority
Answer: A
Diff: 1
Topic: 1.1 The Cycle of Money
AACSB: Analytical Thinking
LO: 1.1 Describe the cycle of money, the participants in the cycle, and the common objective of
borrowing and lending.

5) Which of the following is NOT a function of a financial intermediary in the
lending/borrowing process?
A) To help establish terms of the lending/borrowing agreement
B) To match the borrower and the lender
C) To bear the risk that the lender will not repay
D) To bear the risk that the borrower will not repay
Answer: C
Diff: 1
Topic: 1.1 The Cycle of Money
AACSB: Analytical Thinking
LO: 1.1 Describe the cycle of money, the participants in the cycle, and the common objective of
borrowing and lending.

6) Professor Gaston, your History teacher, borrows money at a rate of 6% per year from the
Valley State Bank for a tuition loan for her son. You have $1,200 deposited into your checking
account at the same bank earning a rate of 0.5% per year. Which of the following statements is
TRUE?
A) The bank is criminally liable to you for paying an interest rate lower than the expected rate of
inflation.
B) You and your professor have an obvious conflict of interest because you have accounts at the
same financial institution.
C) You benefit from earning interest on your deposit, safety for your funds, and having a
recognizable means for paying for your financial obligations without having to hold cash.
D) Your professor is the only party to be made worse off by this example because she is the only
party paying net interest.
Answer: C
Explanation: Both you and your professor are using services typically provided by banks. There
is no conflict of interest.
Diff: 2
Topic: 1.1 The Cycle of Money
AACSB: Analytical Thinking
LO: 1.1 Describe the cycle of money, the participants in the cycle, and the common objective of
borrowing and lending.

3

, 7) The basic function of financial intermediaries is to move advice from lenders to borrowers and
back to lenders.
Answer: FALSE
Explanation: The basic function of financial intermediaries is to move MONEY from lenders to
borrowers and back to lenders.
Diff: 1
Topic: 1.1 The Cycle of Money
AACSB: Analytical Thinking
LO: 1.1 Describe the cycle of money, the participants in the cycle, and the common objective of
borrowing and lending.

8) In the lending/borrowing process, a financial intermediary function is to bear the risk that the
borrower will not repay.
Answer: TRUE
Diff: 1
Topic: 1.1 The Cycle of Money
AACSB: Analytical Thinking
LO: 1.1 Describe the cycle of money, the participants in the cycle, and the common objective of
borrowing and lending.

9) All financial transactions have a buyer and a seller.
Answer: TRUE
Diff: 1
Topic: 1.1 The Cycle of Money
AACSB: Analytical Thinking
LO: 1.1 Describe the cycle of money, the participants in the cycle, and the common objective of
borrowing and lending.

10) Give three examples of a financial transaction.
Answer: (1) Your parents use their credit card to pay some of your college expenses.
(2) You use the ATM to withdraw funds so you can buy your best friend a birthday gift.
(3) Your roommate lends you $20 and you repay it when you get your next pay check.
Diff: 2
Topic: 1.1 The Cycle of Money
AACSB: Analytical Thinking
LO: 1.1 Describe the cycle of money, the participants in the cycle, and the common objective of
borrowing and lending.

4

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller donatrey. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for CA$15.08. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

80202 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 14 years now

Start selling

Exam (elaborations)

Financial Management Core Concepts 4th Edition.pdf

Document information

Subjects

Written for

Seller

Reviews received

Content preview