Exam (elaborations)
COB 300 Finance Exam 1 Study Guide with correct Answers
- Course
- Institution
COB 300 Finance Exam 1 Study Guide with correct Answers
[Show more]
Content preview
COB 300 Finance Exam 1 Study Guidewith correct Answers
Finance - Answers -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) - Answers -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 - Answers -relate to the markets where interest rates, along with stock
and bond prices, are determined
Federal Reserve System - Answers -regulates banks and controls the supply of money
Securities and Exchange Commission (SEC) - Answers -regulates the trading of stock
and bonds in public markets
Investments - Answers -relate to decisions concerning stock and bonds and include a
number of activities
Security Analysis - Answers -deals with finding the proper value of individual securities
Portfolio Theory - Answers -deals with the best way to structure portfolios, or "baskets"
of stock and bonds
Market Analysis - Answers -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 - Answers -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 - Answers -- Board of Directors
- CEO
- COO
- CFO
, COO - Answers -often the firm's president and directs the firm's operations: marketing,
manufacturing, sales, and other operating departments
CFO - Answers -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 - Answers -provides sweeping new legal protection for
employees who report corporate misconduct
Defined Contribution Pension Plan - Answers -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 - Answers -1. proprietorships
2. partnerships
3. corporations
4. limited liability companies (LLCs) and limited liability partnerships (LLPs)
Proprietorships - Answers -unincorporated business owned by an individual
Advantages of Proprietorship - Answers -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 - Answers -Unlimited personal liability
Limited life
Transferring ownership is difficult
Difficult to raise capital
Partnership - Answers -A legal agreement between two or more people to be jointly
responsible for the success or failure of a business.
Advantages of Parnetship - Answers -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 - Answers -unlimited personal liability, difficult to raise capital,
life is limited to owners' lives
Corporations - Answers -legal entity created by a state, and is separate and distinct
from its owners and managesr
Advantages of Corporations - Answers -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
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 millyphilip. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $12.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
67096 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now