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Study Resources (Business Management)

1. ________________In the basic accounting equation, assets equal liabilities plus owners’ equity. 2. ________________The balance sheet is a summary statement of the revenue received and the expenses incurred. 3. ________________ Owners’ equity is another name for profits. 4. ________________The statement of cash flows summarizes the cash effects of a firm’s operating, investing, and.
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1.The following is a list of the major sections of an income statement. Arrange the sections in the proper sequence, noting which sections are subtracted to arrive at the final figure. Cost of goods sold Operating expenses Gross income Income taxes Operating income Net income Sales 2.If a firm has $140,000 in assets, $100,000 in stockholders’ equity, and.
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Going Green Green Banking at New Resource Bank The trend toward small banks with personalized service and environmentally friendly practices has gained steam over the past few years in the wake of financial scandals in which banks and other lenders have paid billions in fines for foreclosure improprieties. New Resource Bank is a.
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Video Case 16.3 New Harvest Coffee Goes Beyond Fair Trade New Harvest, started by Rik Kleinfeldt, is a small-batch coffee roaster specializing in certified organic coffee that is grown and harvested by farms with sustainable practices. Kleinfeldt notes that he built his company on two pillars: 1) the highest quality coffee, and.
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21. Loans made to borrowers with poor credit ratings are called ________________ 22.  The use of material nonpublic information about a company to make investment profits is called ________________ 23. ________________allows the issuer to redeem the bond before its maturity at a specified price. 24. ________________ are bonds issued by state or local.
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Hit & Miss: American Airlines and US Airways Merge In an $11 billion transaction, US Airway’s wish for a merger partner recently became a reality. As American Airlines emerged from bankruptcy, the two companies completed a deal to merge, becoming the world’s largest airline.  Management at American knew it would be difficult.
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1.Which of the following has no maturity date? a.equityc.both equity and debt mature b. debtd.neither has a maturity date 2.The largest and most common financial institutions in the United States are: a.commercial banks.c.savings banks. b.consumer finance companies.d.commercial finance companies. 3.Accounts similar to checking accounts that are offered by credit unions are called: a. share draft accounts.c.time deposits. b.now.
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31. When the U.S. Federal Reserve pushes lower interest rates, the growth rate in the money supply will increase. a. True b. False 32. What is the primary responsibility of the Securities and Exchange Commission (SEC)? a. Regulating banks and other financial institutions b. Providing liquidity to the financial market c. Underwriting the issue of new.
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7._________________If the Federal Reserve Bank buys government bonds on the open market, the money supply will decline. 8._________________Commercial banks and savings banks both focus on business banking. 9._________________A demand deposit is another name for a checking account. 10._________________Commercial finance companies usually make long-term loans to businesses. 11._________________All state chartered banks must belong to the.
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1. ________________Users expect to earn a rate of return in exchange for the use of their funds. 2. ________________The financial system is the process by which funds are transferred between those having excess funds (savers) and those needing additional funds (users). 3. ________________Although direct transfers are possible, most funds flow from users.
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1._________________An increase in the reserve requirement or the discount rate will increase the money supply. 2._________________The most essential function of the Federal Reserve System is to control the supply of money and credit in order to promote economic growth and a stable dollar. 3._________________The Federal Reserve System or Fed is the Central.
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Going Green Green Banking at New Resource Bank The trend toward small banks with personalized service and environmentally friendly practices has gained steam over the past few years in the wake of financial scandals in which banks and other lenders have paid billions in fines for foreclosure improprieties. New Resource Bank is a.
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1.This exchange focuses on stocks of small firms. a. NYSE.c. American Stock Exchange. b. NASDAQ.d. London Exchange. 2.This exchange is actually a computerized communications network that links member investment firms. a. NYSE.c. American Stock Exchange. b. NASDAQ.d. London Exchange. 3.Which exchange is considered the most international? a. NYSEc. American Stock Exchange b. NASDAQd. London Exchange 4.This is the largest.
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Answers to Questions for Critical Thinking 1. As an investor, discuss where you would draw the line when it comes to price per share. Would it be a factor in your decision when purchasing a company’s stock? 2. Perform some additional research to find out how the Berkshire Hathaway Class B stock.
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3.1 What is a financial market? 3.2 Distinguish between a primary and a secondary financial market. 3.3 Briefly explain the role of financial institutions in the sale of securities. 4.1 What are the world’s two largest stock markets? 4.2 Why is the London Stock Exchange unique? 4.3 Explain the difference between a market order and.
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21. What is the world’s largest stock market, in terms of the total value of stock traded? a.The New York Stock Exchangec.The Hong Kong Stock Exchange b.The NASDAQd.The London Stock Exchange 22. NYSE stock __________ are unique investment firms that maintain an orderly and liquid market in the stocks assigned to them. a.specialists b.lobbyists c.vendors d.brokers 23. Banks.
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1. _T____Accountants produce financial statements that can impact a firm’s ability to start or expand a business. 2. ________________Computerized accounting programs available today have made the accounting process far more efficient and effective than in the past. 3. ________________Although accountants produce information useful for financial and investment decisions, they are rarely called.
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1. ________________Only organizations experiencing financial challenges have a need for a budget. 2. ________________ A budget is a firm’s short-term financial plan. 3. ________________A budget serves as the standard with which actual performance is compared. 4. ________________ A budget should match income and expenses in a way that meets a firm’s goals while.
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11. Common stockholders a. are guaranteed dividends based on the firm’s annual profits. b. have the greatest security of any investor. c. have a senior claim to the firm’s assets during bankruptcy. d. usually benefit when a company is growing. 12. Municipal bonds are issued by: a.the U.S. Treasury.c.corporations. b.state or local governments.d.financial institutions. 13. Securities sold by.
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For each of the following ratios, answer the following questions: a.What does it measure? b.What is the equation for determining the ratio? c.Where do the numbers come from? d.How should you evaluate the ratio? 1.Acid-test (quick) ratio: 2.Net Profit Margin: 3.Current Ratio: 4.Return on equity: 5.Inventory turnover ratio: 6.Total liabilities to total assets: .
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1. ________________ It is possible for a firm to earn a profit on an international transaction but still lose money due to shifts in currency exchange rates. 2. ________________The IASC sets international accounting standards that are used exclusively in Europe and North America. 3. ________________Today’s sophisticated accounting programs can track transactions in.
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1. The ________________sets most policies concerning monetary policy and interest rates. 2. ________________are markets in which securities are issued and traded. 3. ________________are short-term debt securities issued by governments, financial institutions, and corporations. 4. When a company offers stock for sale to the general public for the first time it is known as.
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Case 16.1 Silicon Valley’s Banker In his previous job at Credit Suisse First Boston (CSFB), Frank Quattrone brokered some of the biggest tech sales and mergers in Silicon Valley’s early days, including taking Cisco and Amazon public. Once he sent a beleaguered prospect a live mule bearing a note: “Stop feeling like.
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Case 16.2 PayNearMe Serves Unbanked Customers For many different reasons, unbanked individuals have chosen to conduct business and payments primarily with cash and without a formal banking relationship (no checking account, credit cards, or access to consumer loans). A California-based startup, PayNearMe, targets this group of consumers in hopes of allowing everyone.
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1._________________American banks make up the majority of the global financial giants. 2._________________ Virtually all nations have a central bank. 3._________________Foreign currencies and securities held by the Fed are counted as part of the U.S. banking system’s reserves. 4._________________ Transactions in international markets have no impact on the domestic money supply. 1._________________Transactions in the foreign.
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Hit & Miss: Colleges Sell Century Bonds The University of California recently established an $860 million taxable “century bond” offering. These bonds are higher than the average 30-year Treasury bonds and higher than the average return rate of 4.85 percent. The Massachusetts Institute of Technology, University of Southern California, and California Institute.
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1. The financial system is the process by which: a. firms make money. b. securities are sold. c. funds are transferred from savers to borrowers. d. the Federal Reserve manages monetary policy. 2. The majority of money in the financial system passes through financial _____. a.currency and debt b.bonds and certificates c.deposits and loans d.institutions and markets 3. Net worth.
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1.If a company’s officers, directors, lawyers, accountants, investment bankers, or even outside friends or reporters use material, nonpublic information about a company to make investment profits, they are engaged in ________________ 2.Two examples of ________________are the rules of conduct established by the various professional organizations and the market surveillance techniques used.
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11. ________________The income statement presents a summary of the firm’s operations over a period of time. 12. ________________Accounts receivable represent an example of a current asset. 13. ________________Public accountants cannot be external auditors. 14. ________________The statement of cash flows indicates a firm’s sources and uses of cash. 15. ________________ Depreciation is added to net.
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Hit & Miss: Janet Yellen’s Approach to Monetary Policy Janet Yellen was tapped to become the 15th chair of the Board of Governors of the Federal Reserve System, taking the helm from Ben Bernanke who served two four-year terms. She is the first woman to lead the nation’s central bank. The balancing.
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1.The basic accounting equation includes all of the following, EXCEPT: a.gross sales.d.assets. b. owners’ equity.e.all of the above are on a balance sheet. c. liabilities. 2.On an income statement: a.cost of goods sold is deducted from sales. b.cost of goods sold is added to sales. c. profit is found by deducting operating expenses from sales. d.gross income is.
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11. The federal agency that insures deposits at commercial and savings banks is called the ________________ 12. Financial intermediaries that raise money from investors by selling shares are called ________________ 13. ________________ instructs the broker to obtain the best possible price, the highest price when selling, and the lowest price when buying. 14..
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Hit & Miss: American Airlines and US Airways Merge In an $11 billion transaction, US Airway’s wish for a merger partner recently became a reality. As American Airlines emerged from bankruptcy, the two companies completed a deal to merge, becoming the world’s largest airline.  Management at American knew it would be difficult.
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1.The owners of a corporation: a.are its common shareholders.c.have a residual claim to assets. b.have voting rights.d.all of the above. 2.Preferred stockholders: a.are contributors of debt, not equity capital. b.usually have a vote. c.have a prior claim to assets. d.all of the above. 3.In the event of a firm’s dissolution, the first claim on its assets belongs to: a.common.
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