- Study guides, Class notes & Summaries

Commonly used multiples for determining and stocks value include I - Price to earnings II - Price to sales III - Price to cash flow IV - Price to dividends AnsI, II, and III only Traditional portfolio managers prefer well known companies because? I. stocks of well known firms tend to be less risky than stocks of lesser known firms.− − II. individuals are more apt to purchase a mutual fund if it contains stocks of well known firms.− III. window dressing encourages the pu...

S Corporation Anstax-reporting entity that allows certain corporations with 100 or fewer stockholders to choose to be taxed as partnerships Limited Liability Company (LLC) Ansgives its owners limited liability and taxation as a partnership. Unlike S corp, it can own more than 80% of another corporation Limited Liability Partnership (LLP) Anspartners are liable for their own acts of malpractice, but not for those of other partners Goal of the Firm Ansmaximize shareholder wealth/va...

What is a Small Business? Ansamong small businesses, there is a great degree of diversity in size, in growth potential, in organizational structure, and often in culture. There is no generally accepted or universally agreed-on definition. high-potential ventures or gazelles Ansthe few businesses with phenomenal prospects for growth franchisees Ans44% of businesses are franchises according to the Franchise Association these differ from other business owners in the degree of ...

The popular book, The Millionaire Next Door, details the extravagant lives of the wealthiest people in various communities throughout the United States. AnsFalse Schor states that "many of us are continually comparing our own lifestyle and possessions to a select group of people we respect and want to be like." She calls this... AnsCompetitive Acquisition According to Schor, a/an __________ __________, is a group with which a person is more likely to compare themselves ...

The primary role of a financial system is to: a. enable financial managers to evaluate investment projects with a system that always selects the correct opportunity for their firm b. make savvy investors rich c. channel funds from savers to borrowers who need funds for investment projects d. provide employees in financial institutions with a code of ethics e. regulate the banking system Ansc. channel funds from savers to borrows who need funds for investment projects The larges...

refinancing risk Ansthe risk that the cost of rolling over or reborrowing funds will rise above the returns being earned on asset investments. This risk occurs when an FI is holding assets with maturities greater than the maturities of its liabilities (e.g. 10-year fixed rate loan funded by 2-year deposit faces risk of interest rate increase). Interest rate increase would reduce net interest income. Bank would benefit from decrease in interest since the cost of renewing the deposits ...

Finance first emerged in the early urban civilizations of ____ AnsMesopotamia The practice of using non-public information to make trades on securities is called _____ trading and is illegal in most countries including the U.S. Ansinsider The SEC stands for the ____ commission. AnsSecurities and Exchange Which of the following is/are the Fed responsible of? AnsImplementing monetary policy and Overseeing the banking system

FINA 3311 TEST 1 QUESTIONS AND CORRECT DETAILED ANSWERS (VERIFIED ANSWERS) ALREADY GRADED A+

Which act separated commercial banking, investment banking and insurance into three separate industries? AnsGlass-Steagall Act At the end of 2013, there were approximately ______ independent banks and thrifts in operation in the United States Ans1,800 What is the primary motivation today of forming a financial holding company? AnsTo engage in activities not permitted in a bank holding company. Bank holding companies and financial holding companies generally do not pay in...

Money market securities are sometimes referred to as cash equivalents because __________. a) they are safe and marketable b) they are not as liquid as capital market securities c) they have higher risk than common stocks d) they trade in a small denomination Ansa) they are safe and marketable The most marketable money market security is _________. a) Treasury bills b) Treasury notes c) certificate of deposit d) commercial paper Ansa) Treasury bills __________ is a discoun...