CSC Chapter 1 Questions and Answers
What is Capital?
Are materials used by businesses, such as land & building, or financial assets, like bonds & stocks.
What are the 2 ways capital can be utilized?
Direct investment: used to invest in a home, highway
Indirect investment: used to invest ...
CSC Chapter 1 Questions and Answers
What is Capital? - answer Are materials used by businesses, such as land &
building, or financial assets, like bonds & stocks.
What are the 2 ways capital can be utilized? - answer Direct investment: used to
invest in a home, highway
Indirect investment: used to invest in stocks, bonds that cannot be touched. Its used to
finance direct investment
What are the 3 characteristics of capital? - answer Capital is MOBILE, SENSITIVE &
SCARCE
Why do individuals uses capital? - answer Use capital to finance housing, consumer
goods & financial consumption
Why do businesses uses capital? - answer Use capital to finance its operations,
maintain plant & equipment, or expand. Capital is generated by profits or issuing
securities
Why do Federal Government uses capital? - answer Borrow capital to finance
deficits & expenditures. They issue T-bills, Marketable bonds, CSB & CPB
Why do Provincial Government uses capital? - answer Borrow capital to finance
expenditures, like health care. They issue non-marketable bonds, borrow from CPP or
issue bonds & debentures
Why do Municipal Government uses capital? - answer Require capital to finance
expenditures on streets, sewers, police. They issue instalment debentures
What are debentures? - answer Bonds that are not secured by assets. They're
backed up by credit. Governments & corporations uses debentures to secure their
capital.
What are debt securities? - answer Used mainly for loans. It provides a return on a
fixed-payments until maturity. Includes bonds, debentures, T-bills & GIC
What are equity securities? - answer Allow investors to have a share in the
company. Investors are able to participate in the company & can receive dividends.
Includes preferred & common shares, and restrictive shares
What are restrictive shares? - answer Have limited to non-voting rights
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 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 Pogba119. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for £11.76. You're not tied to anything after your purchase.
