Exam 13: Managing Financial Resources

The rate that banks charge their best customers is called the maturity rate.

As a loan officer at a commercial bank, you must determine the _____ rate that you'll charge your best customers.

All of the following are depository institutions except _____.

Coordinated by a board of _____, the Federal Reserve System consists of 12 districts, each with a memberowned Federal Reserve Bank.

Liabilities are debts owed by a company to outside parties.

Collateral is something that you pledge in order to guarantee repayment of a loan.

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. -_____ will probably be the most important source of funds for your new business.

Large companies need finance professionals to do all of the following except _____.

Money serves all of the following basic functions except _____.

Equity financing means raising needed capital by selling bonds.

Mary Matthews is creating a(n) _____ that calculates the amount of funds that her company needs for a specified period of time.

The inflation rate is one of the three tools with which the Fed conducts monetary policy.

A financial plan shows calculations for the amount of funds that a company needs for a specified period.

SCENARIO-BASED Privately held for 18 years, Superior Chemicals Inc. has finally decided to go public. The owners are in the process of deciding whether to use debt or equity financing to finance growth after the initial public offering. -Regardless of their choice of financing, Superior will generate a prospectus, or written offer to sell securities that provides useful information to prospective buyers.

The fact that people are willing to save money for future purposes describes which function of money _____.

The _____ rate is the interest rate paid by a Federal Reserve member bank when it borrows from another member bank to meet its reserve requirements.

SCENARIO-BASED Privately held for 18 years, Superior Chemicals Inc. has finally decided to go public. The owners are in the process of deciding whether to use debt or equity financing to finance growth after the initial public offering. -Superior will make its IPO (Initial Public Offering) in the primary market.

A(n) _____ is a financial plan that projects cash inflows and outflows over a period of time.

A primary market deals in new financial assets.

All of the following are common methods of financing a new business except _____.