Exam 13: Managing Financial Resources

Debt securities that require annual interest payments to bond holders are called _____.

The government tracks the money supply by calculating _____, which includes the most liquid forms of money.

Credit unions offer only limited services to their members, who must be linked to a particular group such as employees of the State of North Carolina.

About 10 years ago you founded an energy company that operates as a privately-held corporation with only limited stock ownership. You are considering selling stock to the public for the first time through an initial public offering. All of the following are disadvantages for taking a company public except:

_____ review and recommend prospective investments to company managers.

_____ financing means raising needed capital by selling bonds.

_____ are willing to invest in start-up ventures that they believe will succeed.

_____ trading is the illegal buying or selling of securities by a firm's officers or directors or anyone else taking advantage of valuable information about a company before it's made public.

Amortization is the schedule by which you'll reduce the balance of your debt.

The government compiles two measures for the purpose of tracking the money supply: M-1 and M-2. Which of the following is not included in the government's calculation of M-2

Explain the Dow Jones Industrial Average.

A(n) _____ is the process of taking a privately held company public by selling stock for the first time.

M-2 is a measure of the money supply that includes everything in M-1 plus near-cash.

SCENARIO-BASED You and a friend want to open new pet grooming and pet services shop. Once established, you intend to open a second store in a larger town 20 miles away. If store number two is a success, you plan to start franchising your company. -Besides calculating the amount of funds that your business needs for a specified period of time, your financial plan should include a(n) _____.

Debt financing means raising needed capital by selling bonds.

A(n) _____ market is a period of declining or sluggish stock prices.

Which of the following is the highest rate

_____ operations are the Fed's main tool in controlling the money supply and influencing interest rates.

SCENARIO-BASED Sherry LeBlanc has been a teller at Community First Bank for two years and anticipates a promotion to main teller within the next few months. She’s worked hard at her job, knows her bank’s financial products well, and interacts with customers effectively. Community First Bank has been in business for 38 years, provides traditional banking services, and enjoys a good reputation in the local area. -Sherry can offer customers checking accounts and savings accounts but probably not electronic banking.

Which of the following is an approach used by the Fed to lessen the likelihood of inflation